IBM storage revenues sink: 'We are disappointed,' says CEO

Re: IBM managers are thieves!

Or maybe you got it backwards, and the IBM hardware is not that good as you imagine? For instance, you talk about the CELL processor. Well, you need 13 (thirteen) CELLs at 3.2GHz to match one single SPARC T2+ at 1.6GHz in string pattern matching. The CELL cpu used heavy optimizations (loop unrolling, etc) and the SPARC cpu implemented a school book algorithm in C, and still it was much much faster.

Maybe that is the reason nobody uses CELL today, and it got killed off? I mean, why kill a success? You only can failures, not successes. But due to heavy marketing people believed CELL was fast. Well, it wasnt.

For the IBM POWER6 cpu, you need fourteen (14) cpus at 4.7GHz to match four SPARC T2+ cpus in official SIEBEL v8 benchmarks, just read it. Maybe the POWER6 was not that good either.

People still use LTO?

Re: IBM sell their storage arm? Nah.

Matt, I agree that IBM will probably hold off on ditching storage, at least the lines that are complementary to the host environments where they’re a major player. For instance, as long as they still sell iSeries (AS/400), pSeries (AIX) and most importantly zSeries mainframes (where they pretty much have a monopoly on the CPU and OS) they'll continue to sell the DS8000 line, updating its processors, memory and drives every half decade or so, like they have been since the late 90's. I would think R&D costs have long been amortized and the cost of goods are either commodities (drives, SAS Controllers, disk shels) or they’re common to the pSeries (processors, memory, etc). So their margins must be good with the DS-8000 line and the cost of keeping it around low.

I wouldn’t expect any huge innovations in the DS-8000, as they’d probably rather have highly desirable enterprise capabilities not be array based but live up the stack in the host (pSeries and zSeries), operating system (AIX and z/OS) or applications (DB2, WebSphere, etc). And if doesn’t / can’t fit in any of those places, it’d make sense to put it into SVC. Speaking of SVC, given a dollar of R&D budget in their storage lineup for innovation and net new capabilities, I think they’d put at least 90 cents of it in the SVC R&D budget. This would be cheaper than developing for each of their disparate storage systems (Storwize, XIV, TMS, DS, etc, etc, etc).

I don’t agree that they’ll be OEM’ing storage from any other players, given their recent history divorcing NetApp and shedding off low margin and hardware business units. They’ve realized that servicing someone else’s product has high support costs, low customer satisfaction and contention / cannibalism with the OEM. I think instead, they’ll look to rationalize and / or integrate some disparate storage lines from all the acquisitions they have made (Storwize, XIV, TMS, etc).

I believe they’re on a longer term transformation just as Ginn Rometty said during her earnings call. When a company that has over 400K employees all over the world and $100B in sales, it’s tough to change, takes a long time and there’ll be some grim quarters along the way. I actually worked at IBM in the early to mid-90’s and things were bad then as well then Lou Gertstner came in and transformed IBM. It’s the companies who aren’t willing to go through these tough multiyear transformations that aren’t around in the long run.

I think IBM transformation’s success will be apparent in 3 years or so and it’ll be quite binary with either: A) IBM well positioned to be the market leader of cloud based business services or B) IBM will follow HP and split up, into 3 or 4 companies instead of two, like HP.

To paraphrase: "Your mind is writing checks your body can't cash." (Top Gun) How anyone can make hard and accurate revenue and profit predictions in the technology sector that far out is beyond me.

The hollowing out is well underway

Haven't goggled it, but that wasn't a five year plan perchance? Five year plans don't work out so good. Heh. Problem with some of these larger companies, they lack elasticity. They can't change fast enough and/or they mis-interpret the change around them and head off in a direction and land some place the industry isn't going. High-end monolithic storage arrays on the decline... "hmmm... what does that mean? Where should we be heading?" etc. As Potts quotes Jobs: As the much-venerated Steve Jobs said: "If you don't cannibalize yourself, someone else will." I wouldn't suggest for a second this is easy, some will get it right others will shore up the walls for a time being and speak good wall street babble on earnings calls until it becomes quite clear they have been hollowed out and there is considerable erosion behind the walls. The "two for one" spends that Amazon, Google, FB, MS are employing are having a devastating effect on IBM,HP and other traditional players. Borrowed that last bit from Campbell, here: http://storagemojo.com/2014/10/17/shadow-it-pt-2/

Re: whisper words

Exactly, Speltier. Exactly.

I've never understood firstly why anyone still buys ds8000, but especially why you'd spend all that money on an enterprise array to dumb it down behind Svc!

Obviously, you're not the guy paying the bills.

Why would you spend so much money on DS8000's and then spend gobs more money to put SVC in front of them?

Ah yes, you're an IBM shop. Right.

And therein lies the issue: IBM doesn't sell storage. IBM customers buy IBM storage.