SYS-CON MEDIA Authors: Zakia Bouachraoui, Liz McMillan, Carmen Gonzalez, Roger Strukhoff, David Linthicum

Blog Feed Post

Vendors Survival: Will IBM Survive until 2027?

The entrance to IBM's Headquarter in Armonk
Source: Hebrew Wikipedia

IBM's earnings declined every quarter in the last 20 quarters. This trend is surely a warning sign which raise the question: Will IBM survive until 2027?
Warren Buffett's Berkshire Hathaway was one of IBM's larger shareholders. Buffet sold the shares after losing in his IBM investment. He said he hopes that he will not lose in his Apple's shares investment.  

The early days
According to Wikipedia, "The company was originated in 1911 as the Computing-Tabulating-Recording Company and was renamed "International Business machine" in 1924". 

The first Mainframes
On April 7, 1964 IBM announced its first computer system family: the IBM System/360. 
IBM System/360 was the first IBM Mainframe.

Thomas Watson Jr. was the company's president. 
He was warned that he will not be able to compete with the market leader NCR. Few years latter IBM replaced NCR as the market leader.

Personal notes on the 1970s
I started my career as a COBOL Programmer on IBM System/360 computer. IBM was then the market leader. IBM's Business model, as well as other vendors model, was simple: Buy an expensive computer and the vendor will supply the Software free of charge. It was one stop shop for all computers Hardware and Software.

IBM's Operating Systems were functionally limited. I worked as a Systems Programmer for a large Service Bureau serving a lot of Public Sector Organizations.
We had to extend and change IBM's Operating System in order to address issues such as Security, Tape Management and Spooling. 

IBM was a Theory Z organization like DEC and similar to large Japanese companies: employees are never fired. They may change their jobs but will rewarded for working always for the same company. 

The age of Arrogance
The 80ths and the beginning of the 90ths were IBM's arrogance age.
For example, the organization I worked for and IBM bid together in an RFP in the beginning of the 90ths.

The RFP was defined for Open Systems i.e UNIX, RDBMS, Hardware Platform independence etc. 
While writing our bid IBM's employees brought a strange White Paper. It was about SAA.  Was SAA successful architecture or a failure? the answer is irrelevant in the RFP's context. SAA connected various IBM platforms such as Mainframe, AS400 and IBM Unix. 

Instead of this paper I wrote a small paper about CICS like products on UNIX. They could be deployed on IBM's UNIX as well as on other UNIX platforms including HP-UX and SUN Solaris.

Would IBM cooperate with a small company?
In the arrogance age the answer would probably be "no".
A small company offered cooperation with IBM on the emerging PC platform. The small company, named Microsoft, offered cooperation based on its Windows Operating System.
IBM preferred its OS/2 PC Operating System.  

The Software Age
The PCs revolution included another game change concept: Software revenues were more significant than Hardware revenues.

IBM, HP and DEC had to adapt and change their Business Model. IBM adapted. HP adapted and DEC failed. 
Microsoft become the market leader. IBM was still one of the leading vendors. However, it was no more a vendor who is capable of provide all Hardware and Software functionality. 

IBM had to acquire other companies and to focus on specific markets, such as Middleware, in addition to its Proprietary Platforms, such as Mainframes and AS400 computers.

IBM Global Services
Additional way for competing was by offering Professional Services in addition to Software and Hardware products. IGS (IBM Global Services) was  a leader in the Professional Services market.

The SOA Age
After 2005 SOA emerged as a Mainstream Software approach. The four leading SOA Ecosystems were IBM, Oracle, Microsoft and SAP.

Cloud, Social Networks and Smart phones 
 New concepts and new market leaders. Google, Apple, Facebook and Amazon became the IT market leaders. Microsoft is also a leader in the Cloud Computing market thanks to its "Cloud First" approach.

would IBM Survive until 2027?
A company that survived since 1911 will probably continue to survive in the following ten years. IBM is a large global company who has many customers and many products.  It is a leader in markets such as IBPMS, other Integration and Middleware markets, BI and Big Data. 

Its proprietary markets such as the IBM System i (the AS/400) will not disappear in the following ten years.
As far as the Mainframe is concerned, IBM's work is excellent.
The Mainframe is alive and kicking more than 60 years. Its capabilities are extended supporting modern software such as Java and Linux. Its Security and Availability are still higher than other platform's Security and Availability and its Workload Management is unique. 
Many Large Enterprises are still using Mainframes for Core Systems. 
Recently, IBM announced new Mainframe generation z14.  
However, the Mainframe is a Niche platform and organizations are gradually migrating to Mainstream platform such as Linux and Windows. 

The Problem
Survival is important but the vendor position is also important. IBM's position is not as good as it was few years ago. 

The problem is that IBM does not lead any significant new technologies market.
It seems that IBM could be a leader in the Public Cloud Computing Infrastructure As a Service (IaaS) and Platform as a Service (Paas) markets. 
However, Amazon's AWS is the market leader (more than 40%) followed by Microsoft's Azure and Google. IBM is following Google, however its market share is small. 
Salesforce is a leader only in the PaaS market.

Innovation
The computing market is dynamic and evolving. The times are constantly changing. Innovative company position could be improved. 
An interesting article published in February, 2017 depict a possibility of IBM regaining its old time position as the chip market leader instead of Intel.
The scenario is based on acquisition of other Power Consortium members (Power is IBM's chip).
The acquisition targets are Networking Infiniband and Networking Hardware vendor Mellanox, The graphical processors leader Nvidia and FPGA maker Xilinx. 

For more details read the article: The Case for IBM Buying Nvidia, Xilinx and Mellanox.


     

Read the original blog entry...

More Stories By Avi Rosenthal

Ari has over 30 years of experience in IT across a wide variety of technology platforms, including application development, technology selection, application and infrastructure strategies, system design, middleware and transaction management technologies and security.

Positions held include CTO for one of the largest software houses in Israel as well as the CTO position for one of the largest ministries of the Israeli government.

Latest Stories
Moroccanoil®, the global leader in oil-infused beauty, is thrilled to announce the NEW Moroccanoil Color Depositing Masks, a collection of dual-benefit hair masks that deposit pure pigments while providing the treatment benefits of a deep conditioning mask. The collection consists of seven curated shades for commitment-free, beautifully-colored hair that looks and feels healthy.
The textured-hair category is inarguably the hottest in the haircare space today. This has been driven by the proliferation of founder brands started by curly and coily consumers and savvy consumers who increasingly want products specifically for their texture type. This trend is underscored by the latest insights from NaturallyCurly's 2018 TextureTrends report, released today. According to the 2018 TextureTrends Report, more than 80 percent of women with curly and coily hair say they purcha...
The textured-hair category is inarguably the hottest in the haircare space today. This has been driven by the proliferation of founder brands started by curly and coily consumers and savvy consumers who increasingly want products specifically for their texture type. This trend is underscored by the latest insights from NaturallyCurly's 2018 TextureTrends report, released today. According to the 2018 TextureTrends Report, more than 80 percent of women with curly and coily hair say they purcha...
We all love the many benefits of natural plant oils, used as a deap treatment before shampooing, at home or at the beach, but is there an all-in-one solution for everyday intensive nutrition and modern styling?I am passionate about the benefits of natural extracts with tried-and-tested results, which I have used to develop my own brand (lemon for its acid ph, wheat germ for its fortifying action…). I wanted a product which combined caring and styling effects, and which could be used after shampo...
The precious oil is extracted from the seeds of prickly pear cactus plant. After taking out the seeds from the fruits, they are adequately dried and then cold pressed to obtain the oil. Indeed, the prickly seed oil is quite expensive. Well, that is understandable when you consider the fact that the seeds are really tiny and each seed contain only about 5% of oil in it at most, plus the seeds are usually handpicked from the fruits. This means it will take tons of these seeds to produce just one b...
Steaz, the nation's top-selling organic and fair trade green-tea-based beverage company, announces its 2017 "Mind. Body. Soul." tour, which will bring authentic experiences inspired by the brand's signature Mind. Body. Soul. tagline to life across the country. The tour will inform, educate, inspire and entertain through events, digital activations and partner-curated experiences developed to support the three pillars of complete health and wellness.
The platform combines the strengths of Singtel's extensive, intelligent network capabilities with Microsoft's cloud expertise to create a unique solution that sets new standards for IoT applications," said Mr Diomedes Kastanis, Head of IoT at Singtel. "Our solution provides speed, transparency and flexibility, paving the way for a more pervasive use of IoT to accelerate enterprises' digitalisation efforts. AI-powered intelligent connectivity over Microsoft Azure will be the fastest connected pat...
There are many examples of disruption in consumer space – Uber disrupting the cab industry, Airbnb disrupting the hospitality industry and so on; but have you wondered who is disrupting support and operations? AISERA helps make businesses and customers successful by offering consumer-like user experience for support and operations. We have built the world’s first AI-driven IT / HR / Cloud / Customer Support and Operations solution.
ScaleMP is presenting at CloudEXPO 2019, held June 24-26 in Santa Clara, and we’d love to see you there. At the conference, we’ll demonstrate how ScaleMP is solving one of the most vexing challenges for cloud — memory cost and limit of scale — and how our innovative vSMP MemoryONE solution provides affordable larger server memory for the private and public cloud. Please visit us at Booth No. 519 to connect with our experts and learn more about vSMP MemoryONE and how it is already serving some of...
Darktrace is the world's leading AI company for cyber security. Created by mathematicians from the University of Cambridge, Darktrace's Enterprise Immune System is the first non-consumer application of machine learning to work at scale, across all network types, from physical, virtualized, and cloud, through to IoT and industrial control systems. Installed as a self-configuring cyber defense platform, Darktrace continuously learns what is ‘normal' for all devices and users, updating its understa...
Codete accelerates their clients growth through technological expertise and experience. Codite team works with organizations to meet the challenges that digitalization presents. Their clients include digital start-ups as well as established enterprises in the IT industry. To stay competitive in a highly innovative IT industry, strong R&D departments and bold spin-off initiatives is a must. Codete Data Science and Software Architects teams help corporate clients to stay up to date with the mod...
As you know, enterprise IT conversation over the past year have often centered upon the open-source Kubernetes container orchestration system. In fact, Kubernetes has emerged as the key technology -- and even primary platform -- of cloud migrations for a wide variety of organizations. Kubernetes is critical to forward-looking enterprises that continue to push their IT infrastructures toward maximum functionality, scalability, and flexibility. As they do so, IT professionals are also embr...
Platform9, the leader in SaaS-managed hybrid cloud, has announced it will present five sessions at four upcoming industry conferences in June: BCS in London, DevOpsCon in Berlin, HPE Discover and Cloud Computing Expo 2019.
At CloudEXPO Silicon Valley, June 24-26, 2019, Digital Transformation (DX) is a major focus with expanded DevOpsSUMMIT and FinTechEXPO programs within the DXWorldEXPO agenda. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throug...
When you're operating multiple services in production, building out forensics tools such as monitoring and observability becomes essential. Unfortunately, it is a real challenge balancing priorities between building new features and tools to help pinpoint root causes. Linkerd provides many of the tools you need to tame the chaos of operating microservices in a cloud native world. Because Linkerd is a transparent proxy that runs alongside your application, there are no code changes required. I...