IBM Culling Workers or Pushing Them Out (So That It's Not Framed as Layoffs), Red Hat Mentioned Repeatedly Only Hours Ago
JUST 5 hours ago
IBM didn't need to hire Bain and McKinsey to tell them to focus on mainframes, because they've been doing it all along. Any old timers who were around in the PS/2 and OS/2 days can recall how IBM treated the personal computer as nothing more than d-mb terminals next to the "real computer" (the mainframe). That attitude existed in the 1980s and 1990s, and it still exists today.The mainframe-only path will focus IBM to a pinpoint of irrelevancy in the world IT market. The "hybrid cloud" and "port stuff to Red Hat Linux" approach may extend IBM's life for a while, but customers will keep on working to find alternatives outside the IBM ecosystem. To many modern businesses, IBM is simply TOO MUCH. The machines are too big, the staff requirements are too many, it takes too long to implement, and IBM wants TOO MUCH money.
While IBM tries to sell big-a-s machines for huge amounts of dough, look for the rest of the market to do everything they can to replace the hulking IBM stuff. New processor, computer and accessory designs will come out from other vendors to implement the RAS, crypto and other features that were once available only on mainframes. These features will be dirt-cheap (relatively speaking), available from companies like Nvidia. They will be available on a piecemeal basis (buy just what you want), or if you want you can buy them as part of a cloud deal from one of the successful cloud vendors (Google, Microsoft, Amazon). New software will be written for the new environment(s), and eventually IBM's stuff will be ditched.
This may take 15-20 years, but it will happen eventually. IBM's cost footprint is simply too big for most players to support.
9 hours ago: (same page)
When IBM/Redhat hired McKinsey the die was cast. McKinsey just reiterated what Bain had recommended in 2018 for legacy IBM. Downsize and focus on being good at a few things rather than being mediocre at all things. IBM is applying that recommendation to their new “NICHE” strategy (AI/hybrid cloud/SW modernization using LINUX) which is focused almost exclusively on mainframe. The Bain/McKinsey pitch was/is if you focus on mainframe, you can dump approx 60-65% of the remaining IBM infrastructure and support teams. That’s exactly what has been going on over the last 5-10 years (110 billion down to 60 billion over time). Expect IBM to emerge from this restructuring as a lean NICHE mainframe player (225k headcount) who doesn’t compete with the cloud giants, but rather partners with them, and is expert at what they do best (eg mainframe) Don’t believe me? Just look at IBM’s previous purchases (redhat 30 billion, apptio 5 billion, hashicorp 6.5 billion, etc etc). IBM isn’t investing in traditional IBM, but is rather investing in “niche” mainframe IBM. The SW location offerings were the current tell as to where IBM is taking the company.Lowell = primarily legacy mainframe offerings Keep the money makers
RTP = primarily redhat LINUX offerings Rewrite cobol offerings in LINUX
Austin = primarily power ISV offerings Support large ISV’s who invested in IBM
SVL = primarily all new AI/hybrid cloud/SW modernization offerings reimagine what mainframe offerings will look likeEverything else goes to India in sustain skeleton crew mode. Milk the IP
https://www.theregister.com/2024/03/27/red_hat_hires_mckinsey/
NOTE IBM knows that 80% of you that are impacted will not move It’s already been mapped out. If you wish to remain with IBM, the growth area will be SVL and RTP while Lowell and Austin will be in sustain mode
Another thread (minutes ago):
IBM is only hiring overseas. They are laying off workers or forcing leave aggressively. Seems they want India to be the home of IBM. The job market in tech is terrible right now. Unionize!
Hours ago there were two reports we saw about IBM "reorg". We all know what "reorg" means in the C-suite. █