Cringely Predicts IBM 'Disappears Into Red Hat'
'Tech pundit Robert X. Cringely has been sharing technology predictions every January for over two decades -- and he made another big one on Friday: IBM has three divisions — Global Technology Services (GTS), Global Business Services (GBS), and Red Hat. GTS is the legacy IT business, GBS is the professional services business invented by Lou Gerstner to save IBM the last time it was in huge trouble, and Red Hat is Linux. GTS — that part of IBM most of us still think of as IBM — will probably be sold by summer. Either it will go to private equity (depends on the total debt load) or it will be sold to HPE or maybe to Oracle. Either way, it's not a likely success story, but [current CEO Ginni] Rometty has no real choice. IBM is, at this point, smoke, mirrors, and buybacks. The GTS windfall will land in Ginni's final quarter, juicing her payout, which might be the major point of the deal... IBM's new CEO is Arvind Krishna, formerly head of the Cognitive Computing unit — IBM's cloud guy. Except Cognitive Computing was never really cloud. Cognitive has been a mishmash of cloud, supported by revenue streams that are anything but cloud. It's cloud in name only and will be the part that goes next summer, possibly with Mr. Krishna still at its head. The next chairman of IBM after Rometty will be current Red Hat CEO Jim Whitehurst. If Whitehurst is as smart as I think he is, he started yesterday looking for a new job. It's not that he really intends to leave, but as the next savior of IBM, Ginni et al will pay anything to keep him. Cut your new deal now, Jim, while demand is greatest....Whitehurst will turn IBM into Red Hat, which will take HQ to North Carolina and mean most of the remaining GBS staff will be gone in a year... It still won't save IBM. They'll go down in the coming year or two along with the rest of the industry we used to call IT... Let's just say that IBM's loss is AWS's gain.' -- source: https://linux.slashdot.org/story/20/02/02/0448233 Cheers, Peter -- Peter Reutemann Dept. of Computer Science University of Waikato, NZ +64 (7) 858-5174 http://www.cms.waikato.ac.nz/~fracpete/ http://www.data-mining.co.nz/
On Sun, 2 Feb 2020 22:09:14 +1300, Peter Reutemann quoted:
'> It still won't save IBM. They'll go down in the coming year or two along with the rest of the industry we used to call IT...'
Another analysis: <https://www.nextplatform.com/2020/01/31/making-the-red-hat-platform-bet-pay-off-for-big-blue/>, along with a recap of the company’s history. Red Hat may not have been IBM’s biggest gamble--the introduction of the System/360 range in the 1960s cost the company *two years* of revenue in total, which is an absolutely mind-boggling amount. (It did pay off, exceedingly well.) So Cringely is not the only one taking for granted that Red Hat will continue to grow and thrive under IBM ownership. This quote bothers me, though: Red Hat didn’t need Big Blue to succeed, but IBM surely needs Red Hat to do so. Makes me wonder what the benefit was to Red Hat of the acquisition. Is it getting extra investment capital, that it couldn’t access otherwise? (But the quote seems to say no.) Even if Red Hat ends up ingesting the remnants of IBM, what does the former get out of that? As everybody knows, acquisitions by large companies of not-so-large companies have a low chance of turning out well. Red Hat may be turning out to be an exception so far, but I think there’s still a chance that IBM can screw this up.
participants (2)
-
Lawrence D'Oliveiro -
Peter Reutemann