Link: IBM fuses its software with Red Hat’s to launch hybrid-cloud juggernaut

The effort has started with IBM bundling Red Hat’s Kubernetes-based OpenShift Container Platform with more than 100 IBM products in what it calls Cloud Paks. OpenShift lets enterprise customers deploy and manage containers on their choice of infrastructure of choice, be it private or public clouds, including AWS, Microsoft Azure, Google Cloud Platform, Alibaba and IBM Cloud.

The prepackaged Cloud Paks include a secured Kubernetes container and containerized IBM middleware designed to let customers quickly spin-up enterprise-ready containers, the company said.

Five Cloud Paks exist today: Cloud Pak for Data, Application, Integration, Automation and Multicloud Management. The Paks will ultimately include IBM’s DB2, WebSphere, API Connect, Watson Studio, Cognos Analytics and more

Source: IBM fuses its software with Red Hat’s to launch hybrid-cloud juggernaut

Link: IBM Takes A Hands Off Approach With Red Hat

The reason for this hands-off attitude for such expensive acquisitions is simple: Both VMware and Red Hat live and die by the fact that they are neutral to any particular platform. While IBM may prefer Red Hat’s various elements of the stack – the Enterprise Linux operating system, the OpenShift container system, the OpenStack cloud controller, the JBoss application server, and the Ceph block and object storage – it cannot prevent Red Hat’s vast partner network from doing what they do, which is compete against IBM and each other selling Linux stacks. To not do so would be to destroy the value of the Red Hat business, just as Dell would destroy the value of the VMware business if it had only put VMware’s virtualization and cloud software on its own PowerEdge servers

Source: IBM Takes A Hands Off Approach With Red Hat

Link: Assessing IBM i’s Role In Digital Transformation

Making the financial case:

“This is going to sound silly,” he says. “The hardest part isn’t necessarily the refactoring. The hardest part is convincing people to do this. Because, let’s be honest the upfront cost can be very scary, man. It can be frightening. The business is going to say, ‘We just put in X amount of dollars last year to support these kinds of environments.’ You kind of have to ask the question, what’s going to happen five years from now?”

While the legacy application may not be “broken,” forward-looking companies will consider the lost opportunity costs that are inherent when an existing system is not agile enough to support new opportunities and initiatives.

“You’re going to have to have the conversation where you can’t integrate with cloud at all, or you can’t integrate with data analytics, or you’ve failed to do cognitive system and your competitors are because RPG can’t support this stuff?” Kleyman says. “But just because it’s working doesn’t mean necessarily it’s bringing value back to the business.”

It’s easy for an executive to identify problems when servers are down, the application is throwing errors, and the day-to-day business is being impacted. It’s much harder for the executive to be able to identify the ways in which a legacy system could put hamper growth in the future.

“Honestly that’s one of the best approaches, when things aren’t on fire, to start asking some of these difficult questions,” Kleyman says. “It’s kind of like in a relationships. When everything’s going great, you don’t want to bring up any sore points. But realistically speaking, you don’t want to start arguing when everything’s wrong and you start bring up the pain points.”

Source: Assessing IBM i’s Role In Digital Transformation

Link: How IBM Watson Overpromised and Underdelivered on AI Health Care

MD Anderson Cancer Center partnered with IBM Watson to create an advisory tool for oncologists. The tool used natural-language processing (NLP) to summarize patients’ electronic health records, then searched databases to provide treatment recommendations. Physicians tried out a prototype in the leukemia department, but MD Anderson canceled the project in 2016—after spending US $62 million on it.

Outside of corporate headquarters, however, IBM has discovered that its powerful technology is no match for the messy reality of today’s health care system. And in trying to apply Watson to cancer treatment, one of medicine’s biggest challenges, IBM encountered a fundamental mismatch between the way machines learn and the way doctors work

Source: How IBM Watson Overpromised and Underdelivered on AI Health Care

Speed, Accuracy, and Flexibility, IBM circa 1920

IBM punched card machine.

The purpose of a sales force is to bring a company’s value proposition—its “deal”—to customers. That value proposition results in the development of a company’s “go-to-market” strategy, how it will implement that plan. Central to that activity can be a direct sales force, people who meet face-to-face with customers, a typical approach with complex and expensive equipment. For simple products, a catalog or store can suffice, and today even a simple website will do. In 1914, ITR’s and Hollerith’s products were complicated, and so one had to make a clear case about why customers should buy them.

There was considerable consistency across the decades about IBM’s value proposition. Watson explained to a new batch of executives that, “We are furnishing merchants, manufacturers and other businessmen with highly efficient machines which save them money.” For the larger IBM community, he followed with, “That is why we are going to make more money for this business.” He spoke about how IBM created value. By 1920, Watson was preaching that the way to accomplish C-T-R’s goals was “to serve better industry’s vital requirements—the need to conserve time, motions and money.” He introduced a signature for IBM sales literature, too, that delivered a sound-bite value proposition used for decades: “Speed, Accuracy, and Flexibility.”

From IBM: The Rise and Fall and Reinvention of a Global Icon.

Management, as practiced by a young IBM

Of course, there were countercurrents. Managers wanted to control activities. That impetus for control and management of potential risks led to the rise of bureaucracy, characterized by highly defined processes. Generations of executives micromanaged people all the way down the organization while fighting the growth of paperwork and “signoffs.” Such behavior also originated with Watson Sr., who exhibited such contradictory behavior. A vast number of decisions came to him, so many that when his son Tom took over the business in the mid-1950s, one of the first things he did was reorganize IBM to move decision making out of headquarters and into the broader organization.

Yet, simultaneously, the Old Man admonished employees to take individual responsibility for running their “piece of the business,” a phrase used frequently by executives with their staffs. Reflecting back on his first ten years at IBM in 1924, Watson Sr. told a class of the company’s executives that, “It is our policy not to burden any one man, or any group of men, with the responsibility of running this business.” 17 He gave thousands of talks to employees extolling these themes and a positive philosophy about IBM sales. By the early 1920s, this eternal optimist had begun telling salesmen that only 5 percent of all business information was handled by data processing, leaving 95 percent yet to be seized, a magnificent sales opportunity. He spent more time talking to his employees around the world than most future CEOs at IBM would. He met continuously with customers and public officials, far less so with the media.” from “IBM: The Rise and Fall and Reinvention of a Global Icon (History of Computing)” by James W. Cortada

From the history of IBM book I’ve been reading. See more…

Link: Big Blue Puts on a Red Hat: IBM Acquires Red Hat

While many organizations have extensive on and off premise infrastructure investments, comparatively few of them are sophisticated in the way that those environments are tied to each other. If expectations are scaled back to the more realistic “multi-cloud” – the idea that an organization may have investments in more than one environment – the relevance and importance of OpenShift becomes more clear.

This is clever to point out that enterprises have enough trouble integrating their existing, on-premise stuff, let along the complexity and newness of tying together public and private cloud.
Original source: Big Blue Puts on a Red Hat: IBM Acquires Red Hat

Link: Here’s what happened when the IRS’s electronic filing system crashed on Tax Day

From the referenced report:

Tax Day, April 17, 2018, the IRS experienced a storage outage due to a firmware bug on one of the IRS’s high-availability storage arrays. Because of the outage, 59 tax processing systems, including the Modernized e-File (MeF) system, were unavailable for approximately 11 hours between 2:57 a.m. and 1:40 p.m.

Storage firmware bug that hasn’t been patched.
Original source: Here’s what happened when the IRS’s electronic filing system crashed on Tax Day

Link: IBM Drops Cloud Management Platform Onto Kubernetes

“The CMS platform is used by organizations to manage enterprise applications. Those applications include offerings from SAP and Oracle. CMS includes security, disaster recovery, automated infrastructure, and application management…. IBM launched its Cloud Private service last November. It’s built on a Kubernetes-based container architecture that supports integration and portability of workloads between the cloud environment and management across multiple clouds. This includes IBM Cloud, IBM PowerVC, Amazon Web Services (AWS), Microsoft Azure, and VMware on and off premises.”

Original source: IBM Drops Cloud Management Platform Onto Kubernetes

Link: Walmart, IBM, and blockchaining the supply chain

A longer piece, including some alternative suggestions from Gartner:

‘When it comes to supply chains, Valdes believes that blockchains could play an important coordinating role. “If you have a fragmented business ecosystem, with many parties who don’t know each other but need to do business, then they could collaborate through a blockchain,” he says. But there’s a catch. “It’s a ‘boil the ocean’ problem,” he says, meaning that it’ll take fundamental shifts in an industry for adoption to take place. Optimistically, he says, it would take a decade for the industry to rearrange itself so that everyone was logging interactions on a blockchain.

‘Valdes argues that a company as dominant as Walmart doesn’t need its suppliers on a blockchain. It can simply ask its vendors to use whatever system it chooses. “They have been very successful because over the years they have built a robust system of record for their supply chain,” he says. “If you were a supplier to them, you would happily accept their centralized version of the truth.”’
Original source: Walmart, IBM, and blockchaining the supply chain

Link: IBM’s big bet on blockchain

“For example: The recent E. coli outbreak led to mass disposal of lettuce in many places. Using a blockchain-based system to track the supply chain of food could help vendors pinpoint the farm it came from, locate the stores where it’s sold, and throw away only the lettuce that’s tainted.”
Original source: IBM’s big bet on blockchain

Link: The Contradictions Of IBM’s Platform Strategy

“IBM is a systems company with a very large portion of its revenues and an even larger part of its profits coming from these two platforms, the System z mainframe and the Power Systems – now sometimes called the Cognitive Systems – line. The core systems business – meaning the servers, storage, and networking hardware and the operating systems and transaction processing software plus any financing needed for it – comprises about a third of IBM’s revenues and more than half of its gross profits, by our estimates. Various database and middleware stacks up on top of this, generating even more platform revenues and profits, but this is tougher to peel away.”
Original source: The Contradictions Of IBM’s Platform Strategy

Link: The Contradictions Of IBM’s Platform Strategy

“IBM is a systems company with a very large portion of its revenues and an even larger part of its profits coming from these two platforms, the System z mainframe and the Power Systems – now sometimes called the Cognitive Systems – line. The core systems business – meaning the servers, storage, and networking hardware and the operating systems and transaction processing software plus any financing needed for it – comprises about a third of IBM’s revenues and more than half of its gross profits, by our estimates. Various database and middleware stacks up on top of this, generating even more platform revenues and profits, but this is tougher to peel away.”
Original source: The Contradictions Of IBM’s Platform Strategy

Link: The Platform Matters More Than Ever, The Operating System Less So

“Windows Server 2019 is a case in point, and going through the highlights shows it. Back in the day, when a new Windows Server release came out, everyone was obsessed about its scalability and reliability and how it compared to alternatives such IBM i, a slew of Unix variants (including IBM’s own AIX), and the IBM mainframe platforms: VSE, OS/390, and VM. We all dug through the manuals to see how many processors or cores or threads it could span, how much memory it could address, what the impact of SMP or NUMA clustering was on performance, how the I/O was architected to match whatever new gizmos were on the PCI-Express bus. No one really worries about these things. It is a given that any operating system will exploit hardware, and that most hardware is more than enough for most customers. This is not just an IBM i thing. Certain customers, to be sure, can make use of as many cores Intel can cram into a two-socket server, but for most companies, they are nowhere near the top bin parts and they have much less capable processors running at a lot lower cost and with plenty of excess capacity. It doesn’t matter if it is Windows Server or Linux. The basic workhorse server does not look that different from a Power8 or Power9 machine, and in many IBM i shops, there is far less compute dedicated to IBM i on a single instance than on a Windows Server or Linux machine. The database jobs that most IBM i shops have are fairly modest.”
Original source: The Platform Matters More Than Ever, The Operating System Less So

Link: Finally, a more coherent IBM story?

‘IBM is pushing their cloud hard than ever before. Even though it is mostly IBM Cloud Private, this is the first time I heard a more consistent hybrid cloud story. They have moved away from OpenStack (completely) and CloudFoundry (for the most part) and building a good hybrid cloud story using Kubernetes. Both he product team and services team seem to be quite excited about the opportunity Kubernetes offers them. Kubernetes on Bare Metal as a service is a step in the right direction. Unlike OpenStack and, to some extent, CloudFoundry, Kubernetes gives IBM a chance to have a more unified story from their infrastructure assets to middleware assets. Their “One Cloud Architecture” push is directed in this direction and helps IBM tell a consistent story across their entire portfolio.’
Original source: Finally, a more coherent IBM story?

Link: Finally, a more coherent IBM story?

‘IBM is pushing their cloud hard than ever before. Even though it is mostly IBM Cloud Private, this is the first time I heard a more consistent hybrid cloud story. They have moved away from OpenStack (completely) and CloudFoundry (for the most part) and building a good hybrid cloud story using Kubernetes. Both he product team and services team seem to be quite excited about the opportunity Kubernetes offers them. Kubernetes on Bare Metal as a service is a step in the right direction. Unlike OpenStack and, to some extent, CloudFoundry, Kubernetes gives IBM a chance to have a more unified story from their infrastructure assets to middleware assets. Their “One Cloud Architecture” push is directed in this direction and helps IBM tell a consistent story across their entire portfolio.’
Original source: Finally, a more coherent IBM story?

Link: IBM’s cloud strategy revolves around multi-cloud support, grabbing new workloads

‘Among the moving parts from IBM:

-The IBM Cloud Private platform will get cloud-migration tools with an “application transformation advisor” that scans applications and provides guidance on moving them to the cloud. Cloud Automation Manager will help deploy these applications on-premises or in a cloud of choice.

-Kubernetes container support is expanded. IBM Cloud Private will offer new container versions of IBM app development and management software. These container versions will cover API

-Connect, UrbanCode and Netcool. IBM also added new support for Windows containers running .Net apps.

-A cloud integration platform that includes messaging, API management, app integration, secure gateway and high-speed trial software.

Link: IBM Brings Kubernetes Service To Bare Metal

‘By extending its managed service to dedicated servers, IBM can deliver Kubernetes in a form that fits any organization’s cloud strategy, he said, such as building a cloud-native machine learning app, processing large workloads or migrating apps that ingest large amounts of data. “This gives developers greater control over where their workloads reside and enables them to isolate workloads to specific servers,” McGee said.’
Original source: IBM Brings Kubernetes Service To Bare Metal

So what exactly should IBM do, and have done?

Now that IBM has ended its revenue losing streak, we’re ready to stick a halo on it:

There is no doubt, though, that there are signs of progress at IBM, which would not comment on its financial picture before the release of the earning report. So much attention is focused on the company’s top line because revenue is the broadest measure of the headway IBM is making in a difficult transformation toward cloud computing, data handling and A.I. offerings for corporate customers.

The new businesses — “strategic imperatives,” IBM calls them — now account for 45 percent of the company’s revenue. And though it still has a ways to go, IBM has steadily built up those operations — and gained converts.

Over all those quarters, there hasn’t been that much good analysis of “what went wrong” at IBM in so much as I haven’t really read much about what IBM should have been doing. What did we expect from them? What should they be doing now and in the future? I don’t know the answers, but I’m damn curious.

“State your deal.”

Since the mid-2000’s, all tech companies have been shit on for not getting to and dominating public cloud faster (there are exceptions like Adobe that get lost in the splurty noise of said shitting on). Huge changes have happened at companies HP/HPE and Dell/EMC/VMware (where I work happily at Pivotal, thank you very much), and you can see Oracle quarterly dance-adapting to the new realities of enterprise IT spending.

For the past 8 or 10 years I’ve had a rocky handle on what it is that IBM sell exactly, and in recent years their marketing around it has been fuzzy.  Try to answer the question “so what is it, exactly, that IBM sells?” A good companion is, “why do customers choose IBM over other options?”

You can’t say “solutions” or “digital transformation.” (I’m aware of some black kettle over here, but I and any Pivotal person could tell you exactly the SKUs, tools, and consulting we sell, probably on an index card). I’m pretty sure some people in IBM know, but the press certainly doesn’t know how the fuck to answer that question (with some exception at The Register and from TPM, grand sage of all IBM coverage).

I’ve been a life-long follower of IBM: my dad worked at the Austin campus, it was a major focus at RedMonk, and, you know, just being in the enterprise tech industry gets your face placed facing Armonk frequently. I feel like I know the company pretty well and have enough of an unnatural fascination to put up with spelunking through them when I get the chance; IBMers seem pleasantly bewildered when the first thing I ask them to do is explain the current IBM hierarchy and brand structure.

But I couldn’t really explain what their deal is now. I mean, I get it: enterprise outsourcing, BPaaS (or did they sell all that off?), some enterprise private cloud and the left over public cloud stuff, mainframe, a bunch of branded middleware (MQ, WebSphere, DB2, etc.) that they seem forbidden to mention by name, and “Watson.”

There are clear products & services (right?)

 

When I’ve been involved in competitive situations with IBM over the years, what they’re selling is very, very straight forward: outsourcing, software, and a sense of dependability. But the way they’re talked about in the press is all buzzwordy weirdness. I’m sure blockchain and AI could be a big deal, but their on and off success at doing something everyday, practical with it is weird.

Or, it could just be the difficulty of covering it, explaining it, productizing, and then marketing it. “Enterprise solutions” often amounts to individually customized strategy, programs, and implementations for companies (as it should, most of the time), so you can’t really wrap a clear-cut SKU around that. It’s probably equally hard to explain it to financial analysts.

So, what’s their deal?

Cumulative capex spend by Google, Amazon, and Microsoft since 2001.
How much is that public cloud in the window?

Anyhow, I don’t come here to whatnot IBM (genuinely, I’ve always liked the company and still hope they figure it out), but more out of actual curiosity to hear what they should have been doing and what they should do now. Here’s some options:

  1. The first option is always “stay on target, stay on target,” which is to say we just need to be patient and they’ll actually become some sort of “the business of AI/ML, blockchain, and the same old, useful stuff of improving how companies run IT.” I mean, sure. In that case, going private is probably a good idea. The coda to this is always “things are actually fine, so shut the fuck up with your negativity. Don’t kill my vibe!” And if this it true, IBM just needs some new comms/PR strategies and programs.
  2. You could say they should have done public cloud better and (like all the other incumbent tech companies except Microsoft), just ate it. What people leave out of this argument is that they would have had to spend billions (and billions) of dollars to build that up over the past 10 years. Talk about a string of revenue loosing quarters.
  3. As I’m fiddling around with, they could just explain themselves better.
  4. They should have gotten into actual enterprise applications, SaaS. Done something like bought Salesforce, merged with SAP, who knows. IBM people hated it when you suggested this.
  5. The always ambiguous “management sucks.” Another dumb answer that has to be backed up not with missed opportunities and failures (like public cloud), but also proving that IBM could have been successful there in the first place (e.g., with public cloud, would Wall Street have put up with them loosing billions for years to build up a cloud?)

I’m sure there’s other options. Thinking through all this would be illustrative of how the technology industry works (and not the so called tech industry, the real tech industry).

(Obviously, I’m in a weird position working at Pivotal who sells against IBM frequently. So, feel free to dismiss all this if you’re thinking that, now that you’ve read this swill, you need to go put on a new tin-foil hat because your current one is getting a tad ripe.)

IBM’s new Private Cloud Stack, it’s got the Kubernetes & Containers

This week, Big Blue rolled out its new IBM Cloud Private software platform that is designed to enable enterprises to develop on-premises private cloud environments to accelerate app development and allow for easier movement of workloads between their private clouds and public clouds – not only the IBM Cloud but also those from other vendors. Similarly, IBM is leaning on open and container-based technologies for enhanced integration and portability of workloads. The IBM Cloud Private platform is built on Kubernetes, an open-source technology for container orchestration, and will support both Docker containers and Cloud Foundry framework.

More:

IBM Cloud Private can run on a variety of infrastructures, including the vendor’s own mainframe and Power systems, its hyperconverged infrastructure that runs Nutanix software, and IBM Storage’s Spectrum Access solution. In addition, it can run on systems from Dell EMC, Lenovo, Cisco Systems and NetApp, and can be deployed by such VMware, Canonical and other OpenStack distributions as well as bare-metal systems. The private cloud platform also includes such developer services for data analytics as Db2, Db2 Warehouse, PostgreSQL and MongoDB, developer tools like Netcool, UrbanCode, and Cloud Brokerage and open-source management software such as Jenkins, Prometheus, Grafana, and ElasticSearch.

Source: IBM Builds Private Cloud Stack With Kubernetes And Containers

American Airlines is a good profile of enterprise cloud buyer’s needs, hopes & dreams – Notebook

While this is sort of a bummer story for Pivotal (we’d like to have this account), it has a good profile of American and their needs in it. All of which are representative of other large organizations, e.g.:

  • Application types: “The first result is that the airline will migrate to the IBM Cloud some of its critical applications, including the main website, its customer-facing mobile app and its global network of check-in kiosks. Other workloads and tools, such as the company’s Cargo customer website, also will be moved to the IBM Cloud.”
  • Managed data-centers/cloud: “The airline will be able to utilize the global footprint of IBM Cloud, which consists of more than 50 data centers in 17 countries, in addition to a wide range of application development capabilities.”
  • Long-term planning: “We wanted to make sure that the cloud provider would be using Cloud Foundry and open-source technologies so we don’t get locked in by proprietary solutions,” Grubbs said. “We also wanted a partner that would offer us the agility to innovate at the organizational and process levels and have deep industry expertise with security at the core.”
  • We want to do all the new meat-ware: “As part of this process, American will work with IBM Global Services to use IBM’s Garage Methodology of creating applications through a micro-services architecture, design thinking, agile methodology, DevOps and lean development, the company said.”
  • Legacy, it’s how you got here: “IBM Cloud will help enable developers to build and change application functionalities for the airline’s customers. These customer-facing systems will be on the IBM Public Cloud, while American will maintain backend connectivity to other on-premise legacy and third-party systems, for true Hybrid Cloud functionality.”
  • There’s a lot going on: “American Airlines and its subsidiary, American Eagle, offer an average of 6,700 flights per day to about 350 destinations in more than 50 countries. American has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C.”

Source: American Airlines Heads for a New Cloud with IBM

Highlights from: IBM’s continuing quest to refresh its revenue mix

TPM has one of his usual, great round-ups of IBM’s business:

For the full 2016 year, IBM’s revenues were off 2.1 percent to $79.85 billion, but its “real” systems business, which includes servers, storage, switching, systems software, databases, transaction monitors, and tech support and financing for its own iron, fell by 8.3 percent to $26.1 billion.

Changing the revenue mix:

IBM’s efforts to promote SoftLayer cloud and Watson cognitive computing, mobile and social and marketing software and tools, and security wares – what it calls its strategic imperatives – are almost filling in the gap left behind as the core businesses shrink. IBM wanted these strategic imperative businesses to reach $40 billion and 40 percent of revenues by 2018, and in this quarter it already hit the 40 percent mark, with $33 billion in revenues for 2016–as much because of its overall revenue decline as for the growth in these businesses.

And, some info on their hardware revenue:

IBM sold just over $8 billion in Systems products, and brought $934 million to the middle line as pre-tax income

Also:

Schroeter said that Linux-based Power Systems machines now drove 15 percent of revenues, and that is pretty good considering that two years ago it was a few percent of sales.

Source: ”Drilling Down Into IBM’s System Group”( https://www.itjungle.com/2017/01/23/drilling-ibms-system-group/)

AI market sizing: $39bn in growth in less than 3 years?!

The market — defined as A.I.-related hardware, software and services — will surge from $8 billion this year to $47 billion by 2020, predicts IDC, a research firm.

Uh…

Also, some coverage of Watson business models, including customized cocktail drugs, which I hear is a scary big business in the horizon.

And, there’s some IBM AI spreadsheeting you can fiddle around with:

Market-share:

IBM may have a chance to join that group. By 2020, IDC predicts, 60 percent of the A.I. applications will run on the platform of four companies: Amazon, Google, Microsoft and IBM.

Revenue:

UBS estimates that Watson may generate $500 million in revenue this year and could grow rapidly in the years ahead, possibly hitting nearly $6 billion by 2020 and almost $17 billion by 2022.

Having lived through The Great Cloud Forecasting era around the turn of the decade, my advice is: take all this with care, but enjoy the razzle-dazzle!

Source: IBM Is Counting on Its Bet on Watson, and Paying Big Money for It

Linux killed Sun?

For the Sun: WTF? files:

Gerstner questioned whether three or four years from now any proprietary version of Unix, such as Sun’s Solaris, will have a leading market position.

One of the more popular theories for the decline of Sun is that they accepted Linux way, way too late. As a counter-example, there’s IBM saying that somewhere around 2006 you’d see the steep decline of the Unix market, including Solaris, of course.

If I ever get around to writing that book on Sun, a chart showing server OS market-share from 2000 to 2016 would pair well with that quote.

If you’ve read Stephen’s fine book, The New Kingmakers, you may recall this relevant passage:

In 2001, IBM publicly committed to spending $1 billion on Linux. To put this in context, that figure represented 1.2% of the company’s revenue that year and a fifth of its entire 2001 R&D spend. Between porting its own applications to Linux and porting Linux to its hardware platforms, IBM, one of the largest commercial technology vendors on the planet, was pouring a billion dollars into the ecosystem around an operating system originally written by a Finnish graduate student that no single entity — not even IBM — could ever own. By the time IBM invested in the technology, Linux was already the product of years of contributions from individual developers and businesses all over the world.

How did this investment pan out? A year later, Bill Zeitler, head of IBM’s server group, claimed that they’d made almost all of that money back. “We’ve recouped most of it in the first year in sales of software and systems. We think it was money well spent. Almost all of it, we got back.”

Source: IBM to spend $1 billion on Linux in 2001 – CNET

The Amdahl Mug, worth $1m in 1989

It’s been a name-your-own-price market for canny buyers of IBM and compatible mainframes for some time now, but according to the Wall Street Journal, Amdahl Corp is making it easy for even the meekest DP manager to turn into a hard bargainer: it is giving big computer buyers an Amdahl coffee mug and telling them it’s worth $1m if they just leave it on their desk when their IBM salesman comes to call.

Source: THE AMDAHL COFFEE MUG EFFECT – Computer Business Review

CPI case study: IBM and SoftLayer would be greater together

Data from 451 Research’s Cloud Price Index suggests that IBM is missing a trick. By going all-in and baking SoftLayer with Bluemix, IBM would gain a leading position in the market in terms of completeness of services and global availability, as well as finally delivering a single user experience.

Owen over at 451 suggests that IBM hasn’t yet merged SoftLayer into Bluemix totally, missing out on a high ranking in cloud providers (by functionality, geographic availability, etc.). Also: “The company claims $10.2bn in cloud revenue, a growth rate of 46% Y/Y, and 20,000 new users per week.”

Source: CPI case study: IBM and SoftLayer would be greater together

056: IBM InterConnect, corporate copy, lead-gen’ing, serverless programming – Software Defined Talk

Summary

With Matt and Brandon fresh back from IBM’s InterConnect conference we talk about IBM’s announcements – mostly cloud related. It looks like IBM is doin’ alright, well, except for all those quarters of revenue decline aside, but maybe that’s the just what has to be stomached to evolve. We also discuss working with the corporate editorial desk and the concept of “serverless programming.”

Listen above, subscribe to the feed, or download the MP3 directly.

With Brandon Whichard, Matt Ray, and Coté.

SPONSOR: Get a copy of my free booklet on how to avoid screwing up your cloud strategy, “The Cloud Native Journey.” Check out the Cloud Foundry Summit, May 23rd and 25th – come talk with companies that are going cloud and sorting out their digital transformation strategies. Use the code CF16COTE when you register to get 20% off.

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IBM Software Group no longer a formal entity?

But what we had not fully processed – and perhaps no one else did, either – is that at that moment Software Group, for all intents and purposes, was gone except as an amalgamated category for financial reporting to Wall Street.

So suggests TPM in his coverage of Steve Mills retiring.

Solving the conundrums of our father’s strategies

So here we are, as of this writing a good twenty-nine years after the “hatchet job,” and Kodak has declared bankruptcy. The once-humming factories are literally being blown up, and the company’s brand, which Interbrand had valued at $14.8 billion in 2001, fell off its list of the top one hundred brands in 2008, with a value of only $3.3 billion. 6 It really bothered me that the future was so visible in 1980 at Kodak, and yet the will to do anything about it did not seem to be there. I asked Gunther recently why, when he saw the shifts coming so clearly, he did not battle harder to convince the company to take more forceful action. He looked at me with some surprise. “He asked me my opinion,” he said, “and I gave it to him. What he did beyond that point was up to him.” Which is entirely characteristic of scientists like Gunther. They may see the future clearly, but are often not interested in or empowered to lead the charge for change. Why do I know this story so well? He happens to be my father. —The End of Competitive Advantage, Rita McGrath.

You don’t get a sudden, personal turn like that in business books much. It evoked one of the latent ideas in my head: much of my interest in “business” and “strategy” comes from dad’s all too typical career at IBM in the 80s and 90s.

Sometime in the early 80s – or even late 70s? – my dad started working at IBM in Austin on the factory floor, printed circuit boards I believe. He’d tell me that he’d work the late shift, third shift and at 6am in the morning, stop by 7-11 with his buddies to get a six pack and wait in the parking lot of the Poodle Dog bar for it to open at 8.

He moved up to management, and eventually into planning and forecasting. All for hardware. I remember he got really excited in the late 80s when he got a plotter at home so he could work on foils, that is, transparencies. We call these “slides” now: you can still get a that battlefield-twinkle out of old IBM’ers eyes if you say “foils.”

Eventually, he lived the dictum of “I’ve Been Moved” and went up to the research triangle for a few years, right before IBM divested of his part of the company selling it to Multek (at least he got to return to Austin).

As you can guess, his job changed from a long-term one where his company had baseball fields and family fun days (where we have an outdoor mall, The Domain now) to the usual transient, productivity harvesting job. He moved over to Polycom eventually where he spent the rest of his career helping manage planning and shipping, on late night phone calls to Thailand manufacturers.

In addition to always having computers around – IBM PCs of course! – there was always this thing of how a large tech company evolves and operates. At the time, I don’t think I paid much attention to it, but it’s a handy reference now that I spend most of my time focused on the business of tech.