Ooo, this sounds like a nice recipe for company collapse. You hate to see giants who advanced computing get taken over by MBAs who play that "cost center" and "revenue center" bullshit. I'm sure all their enterprise customers will be understanding of the unfixed bugs when the service agent explains how they made Watson 0.03% more effective at capturing pet names this fiscal year
I'm a developer at IBM for one of their enterprise OSs. The lack of funding in retaining and finding talent is slowly killing an already anemic product. The amount of institutional knowledge that has disappeared over the past decade gives me little hope in it ever recovering. More and more bugs are being marked as 'permanent restriction' as there isn't enough time nor experienced developers to fix them anymore. My department is basically surviving on legacy contracts and customers too scared or lazy to migrate to a modern Linux or Windows infrastructure.
In terms of developer credibility with the entrepreneurial community? Sure.
In terms of being a going concern for large customers and investors? The make billions of dollars of profit per year, have a P/E valuation better than Apple's, and pay out 4-5% dividends annually.
I'm not sure what it really means to "be dead" for 40 years. In a sense, the average human is "dead" for 70-something years. But periods of time at that scale are called "life", lol.
IBM will be here long after everyone reading this is gone. They aren't relevant to the environments in which most of us work (they're basically a professional services consulting firm), but we aren't everything.
Their net income has declined precipitously from $15B per year to $5B per year, and profit margins from 15% to below 10%, in a timeframe when its (former) competitors grew by leaps and bounds.
>The make billions of dollars of profit per year, have a P/E valuation better than Apple's, and pay out 4-5% dividends annually.
For a shareholder, this is little solace when their return compared to the market (a basically risk free rate of return) is negative. 0.64% for the last 10 years, 5.93% for the last 20. SP500 is at 12.4% and 9.8% for the same timeframe, per dqdyj.com total return calculator.
"Be dead" usually means having a low P/E and little REAL stock price appreciation (that comes with low P/E and high dividends).
IBMs stock price was $100 in the 2000s. It's only $133 now. If it adjusted for inflation - that would be $173 today. You lost about 25% in real depreciation to get about ~3% per year yield in dividends (taxed as income $$$).
You can do better with Treasuries.
So why take the risk on Big Blue?
Not uncommon for someone to describe a company like this as "dead" - even if it is, presumably, providing some economic value.
Dead as personal computing company, AI products - bad, blockchain - garbage. It exist as a consulting firm that engages in what I would call shady practises. Everytime I see an article about government contract and IBM it is always portraits IBM in very negative light. So yes, billions of profits which is basically siphoning public tax money to shareholders (well Accenture and Deloitte are not better).
This only shows that financial engineering works. Paying dividends and buying back shares while taking on billions of debt to finance it isn't a good long-term strategy.
IBM of today is way past a company that advanced computing. It is a body shop and an American company in name only. Most of their revenue comes from GBS which is basically an offshoring division.
uhhh... IBM is a bank masquerading as a technology company and has been since the 1960s when they started getting real fancy with financing. MBAs have been running things at IBM for at least that long if not longer.
