“The Decline and Fall of IBM” | Robert Cringely | June 2014

Quick read of “The Decline and Fall of IBM” by Robert Cringely, downloadable as Mobi, epub or PDF for $3.99USD from http://www.anysubject.com/the-decline-and-fall-of-ibm-by-robert-cringely , or from Amazon on a Kindle in the U.S. or on a Kindle in Canada.

The body of the book is relatively short. In PDF formatting, the content is as follows …

p. 007: Preface
p. 009: Introduction
p. 013: Chapter 01: Good Old IBM
p. 018: Chapter 02: Lou Gerstner Saves IBM for AWhile
p. 028: Chapter 03: Sam Palmisano and the Long Con
p. 033: Chapter 04: Why Big Companies Can’t Change
p. 039: Chapter 05: LEAN AND Mean
p. 048: Chapter 06: ‘Death March 2015’
p. 054: Chapter 07: A Tale of Two Division Sales
p. 057: Chapter 08: Financial Engineering
p. 061: Chapter 09: An IT Labor Economics Lesson from Memphis for IBM
p. 066: Chapter 10: The Ginni Paradox or How to Fix IBM
p. 077: Afterword: What if Ginni Doesn’t Listen?
p. 078: Comments from Readers (On Cringely Blogs from 2007-2013)
p. 229: About the Author

An (ex-)IBMer who reads Cringely regularly will probably be most interested in Chapter 10.

These are my ideas for what Ginni Rometty should do as CEO. [p. 66]

The Hardware Problem:
Computer technology is becoming more of a commodity, and IBM must learn to become a commodity supplier. [pp. 66-67]
The Hardware Solution:
IBM needs to retain and grow its hardware division. The immediate goal should be to return it to break-even performance without any more staff cuts. Next, it needs to realign the business to better serve the market for the next decade. [p. 67]

The Software Problem:
Compared to many other software companies, IBM moves like a glacier. [p. 68]
The Software Solution:
Product development needs to understand the needs and directions of the customers; it needs to be empowered to design new products and versions that will increase its value to the market; and it needs to be enabled to produce those products and versions quickly and efficiently. [p. 68]

The Services Problem:
For the last 10 years, IBM’s Services divisions have been subjected to relentless cost reductions, layoffs, massive offshoring of work, and a scary process of dumbing down the talent. [….] Most of the great processes IBM developed over the years have been lost. [p. 69]
The Services Solution:
Global Services should launch a division-wide continuous quality improvement program. Teams should be empowered to find and act on ways to automate the business. [p. 70]

The Cloud Problem:
The infrastructure used to provide a Cloud service is much more complex than that of a typical IBM outsourcing account. IBM’s approach of throwing lots of bodies with narrow skills at the problem won’t work with Cloud technology. [p. 71]
The Cloud Solution:
Beyond leaving SoftLayer alone, what IBM needs to do to be successful with its Cloud investments is to fix other parts of the company. [….] IBM needs to provide value-added services to its Cloud platform to increase both revenue and profit. [p. 71]

The Analytics Problem:
IBM has hopes to make this a service they can offer in the Cloud. That will involve copying most of business data to a database outside the company. […] The next challenge to a Cloud service is TIME—simple math and physics. [p. 72]
The Analytics Solution:
There is exciting work to be done in analytics; I just don’t see IBM positioned to grab a leadership role. There’s no way they’ll achieve their stated goal of making billions from this business. [p. 73]

The Mobile Problem:
IBM has completely missed the biggest change in Information Technology in a decade. [p. 73]
The Mobile Solution:
IBM should have its own App Store, which would offer customers a way to learn how to use the new mobile platforms. It could provide a way for the application developes to interact with IBM’s customers. Over time IBM could learn and develop mobile technology that is useful to IBM’s customers. [p. 73]

The great opportunity is to fix the cause of the problem. In most cases, a poor corporate culture delivers decisions that cause quality problems. IBM needs to change its culture and its values. [p. 74]

Restore Respect:
IBM needs to start treating its workforce with respect, and as valued members of the corporation. IBM needs to invest in its people and get them working for the company again. [p. 74]

Near the end of John Akers’ time as CEO … IBM’s divisions needed to operate more effectively. They needed to adapt to the needs of the market, but the corporate management structure was preventing this from happening. This was the exact problem Lou Gerstner found and fixed when he joined IBM. Well, Lou is gone and IBM has reverted back to its old bad habits. [p. 75]

A New Business Model:
IBM needs to learn ROI thinking. IBM spends far too much on gold-plating new products and services. IBM gives preference to its more expensive proprietary technology over commodity industry technology every time. Good design and good engineering makes the best use of money. If the commodity stuff works and is the best economic choice, then
use it. [p. 75]

A Better Business Goal:
Lou inherited a financial disaster and made the tough decisions to stabilize the company. His financial decisions were not the ends they were the means. The long-term goal was to align IBM with its customers and the market. That needs to be done again. [p. 76]

For those interested in IBM, the book is worth $3.99. Cringely is a (well-informed) journalist. He has not, however, ever had a decision-making role inside of IBM, so the analysis comes for an external perspective.

The introduction for the book was replicated by the author on his blog “The Decline and Fall of IBM” | Robert X. Cringley | June 4, 2014 at at  http://www.cringely.com/2014/06/04/decline-fall-ibm/.

The Decline and Fall of IBM:  End of an American Icon?

#cringely, #ibm