The WSJ profiles IBM CEO Ginni Rometty after its 12th straight quarterly decline in revenues and she calls some of her divested hardware units “empty calories”
“These units were producing revenue but not profits”
The WSJ adds a chart where they point out other businesses IBM has moved out of and markets IBM aspires to
What the graph misses is a big fat belly that customers, not Ginni, would call their “empty calories”. Notes, Tivoli, Websphere, DB2, SAP consulting, outsourcing from Cold War era bunkers called Data Centers – by my estimate 2/3rds of IBM revenues still come from products and services 10, 20, 30 years old.
She has shown little willingness to work out that layer. Tough to do with an executive team most of whom proudly show off gold watches for 25 years of service.
Also difficult to see how that leadership and a mostly people-intensive services oriented team can provide leadership for the top line in the graph.
Any customer doing due diligence on the top line is likely to go visit with Google and learn about their “Deep Learning”, for clouds to Microsoft or Amazon, for Business apps to vendors like Oracle and Infor for deep vertical apps, for cyber security to players like GE’s Wurldtech, for personalized health to Apple, Microsoft and others.
IBM still lives in the world of HP, EMC, Accenture and TCS. Ginni has ways to go to change that world.
(Cross-posted @ Deal Architect)