I, Cringely » Blog Archive Not your father’s IBM ~ I, Cringely – Cringely on technology:

The article covers some interesting views on IBM, and insights that extend much broader than IBM.

It’s a prediction of failure for iBM’s plans to grow earnings-per-share, and his conclusion that the result will be a failure. He make a very good case for this.

He shared a good quote from Steve Jobs about big companies that grow into a monopoly position. They can’t get more market share, and doing a better product can’t make them more profits. The people running them become sales and marketing people.

This is the first thing to understand about the IBM of today: the company is being run by executives who for the most part don’t understand the products and services they sell.  The IBM of today is a sales organization.  There is nothing wrong with sales if you can also deliver, but increasingly IBM can’t deliver.

He goes on to quote Jobs again specific about IBM:

The reason IBM can’t deliver is also explained well by Steve Jobs. It’s IBM’s maniacal fixation on process, once a strength but now a cancer.

Companies get confused,” Jobs told me.  “When they start getting bigger they want to replicate their initial success. And a lot of them think well somehow there is some magic in the process of how that success was created so they start to try to institutionalize process across the company.  And before very long people get very confused that the process is the content.  And that’s ultimately the downfall of IBM.  IBM has the best process people in the world.  They just forgot about the content.”

In this instance content means the deliverable, whether a product or service. IBM smugly thinks it knows so well how to do things that they can export their entire business model to cheaper labor forces in less expensive places to do business. While this is correct to a very limited extent it has been embraced as religion in Armonk.

Like he says, Global Services is IBM’s biggest money maker but they’re losing customers.

In another article Cringely showcased two companies in Memphis that replaced IBM’s outsourced services with its own employees and used a local company to monitor its services to prevent outages, one of those companies having had an outage that IBM discovered only when it was reported..

The read is worth it: