back to article IBM ushers in BIGGEST EVER re-org for the cloud era, say insiders

IBM CEO Ginni Rometty is instigating the biggest global re-org in the history of the corporation in a bid to carve out a clearer future in a cloudy world. Multiple sources told us senior managers were this week informed about the changes that will see IBM try to shed the dusty hardware, software and services silo structure. …

  1. Anonymous Coward
    Anonymous Coward

    "and not become the next Digital Equipment Corporation"

    They pretty much already are. IBM have wasted billions on Linux for little benefit purely because they didn't want to cooperate with Microsoft. Not a successful business model...

    1. Justicesays
      WTF?

      "Didnt want to co-operate"?

      Pretty sure Microsoft took every opportunity to screw over IBM during their "Co-operation" period when IBM did try it. OS/2 Warp anyone? No surprise IBM would keep them at arms length after that.

      1. Anonymous Coward
        Anonymous Coward

        Re: "Didnt want to co-operate"?

        "Pretty sure Microsoft took every opportunity to screw over IBM "

        Quite probably, but Microsoft won overwhelmingly. IBM are playing hard cheese and it's costing them badly.

        1. Justicesays

          Re: "Didnt want to co-operate"?

          So your suggestion is, IBM should say, "please sir may I have another?" and get screwed over again, and again , and again?

          Sounds worse than their current plan don't you think? Or do you imagine Microsoft have become a big happy fuzzy bunny since then?

          1. Anonymous Coward
            Anonymous Coward

            Re: "Didnt want to co-operate"?

            "IBM should say, "please sir may I have another?" and get screwed over again, and again , and again?"

            No, not at all - they don't have to get in bed with Microsoft to progress.

            Microsoft have a 75% share of the server market (Forbes), so for IBM to try and ignore them is not surprisingly a massive fail.

            "Do you really think playing nicer with MS will somehow make a difference to their business?"

            Yes. IBM are irrelevant here (FTSE 100) at least partly because of their disconnect from what most companies are actually doing in replacing expensive Midrange with commodity Wintel.

      2. Yes Me Silver badge
        Facepalm

        Re: "Didnt want to co-operate"?

        > No surprise IBM would keep them at arms length after that.

        But they didn't. There were years of OS/2-like cooperation over Web Services, WSDL and all that ball of crap. I'm guessing Ginny has re-learned the lesson of the 1980's about exactly why cooperating with MS is a Bad Idea.

    2. Anonymous Coward
      Anonymous Coward

      You sir are hilarious, your lack of understanding is astounding.

    3. Anonymous Coward
      Anonymous Coward

      You do realise that hardware only makes up about 10% of their turnover and that was before they flogged off the Intel division to Lenovo. Do you really think playing nicer with MS will somehow make a difference to their business?

      1. Anonymous Coward
        Anonymous Coward

        "You do realise that hardware only makes up about 10% of their turnover"

        Not really true, but it is often repeated. That 10%, actually it is 11%, of revenues is the bare metal that you can tap on, but that is not the sort of hardware IBM sells. They sell systems = software and hardware. Take a look at your standard mainframe shop over a five year period. Maybe 10% of the total mainframe expenses go into actual hardware. A large percentage of it goes into the MLC, software licenses, and a substantial portion goes into maintenance and support services. IBM only accounts the 10% as mainframe revenue, but, if you didn't have a mainframe, you probably wouldn't be buying mainframe software and services. The same is true of storage and Power to a lesser extent. These are just the direct costs of the system too, not including all of the indirect benefits from systems (e.g. customer buys IBM storage and then buys Tivoli storage management software). Not to say that all IBM software and services are dependent on systems, but more than meets the eye with the 10% of revenues stat.

    4. returnofthemus

      Let's put some perspective on this

      Not long after Satya Nadella took the helm at M$ he announce 18,000 layoffs, followed by another 3,000 a few short months later, Cisco have been restructuring their business ever since 2009, still trying to work out what it wants to be when it grows up, EMC's last ditch attempt to huddle it's companies into a federation is unlikely to save it from the hacktervist, tugging away at juicy VMware, HP is splitting itself in two and Amazon apparently shoves all its profits back into AWS so on paper has never ever made one, then there's those pesky upstarts over valued, funded by a new wave of financial instruments, nobody is immune!

  2. Anonymous Coward
    Anonymous Coward

    Chinese walls?

    "... Operating between the hardware and software groups was to minimise conflict where IBM worked with other software or hardware vendors, but this was becoming less important with more and more customers wanting to consume technology like a utility."

    No, that's not true. It is no longer necessary because IBM is slowly but surely moving away from all kinds of hardware where there is any competition at all. Basically what they have left are the mainframe and iSeries.

    So what's really happened is that it is no longer important because IBM hardware is another cow to milk and there's no risk of conflict.

    Yet another chapter in the slow and progressive march to irrelevance....

  3. Anonymous Coward
    Anonymous Coward

    Impressive

    Reading the article, I'm left with the impression that IBM are moving from a three silo model to a circa eleven silo model. Either the journalism's not up too much, or Ginny has been listening to the management consultants talking bollocks about matrix organisations again.

    I work for a large complex business. Originally run on country lines, the board sucked on the consultant's Kool-aid, and we adopted a chaotic matrix structure. Now nobody knows who does what, who's accountable for what, we have multiple teams sniffing around the same customer deals, we talk about "collaborative working" and never do it.

    Good luck with that.

  4. Anonymous Coward
    Anonymous Coward

    No compulsories in the UK

    I got a new job and left IBM UK a small number of weeks before the "hands up for a brown envelope" programme started. I would like have to stayed for a bit to help my colleagues and cash in some chips after Xteen years but had to commit to a start date.

    Any hoo, the "voluntary" programme was such a rip-roaring success they have cancelled the planned compulsory programme. What does that tell you about the morale and the planning which somewhere in the region of 200 people have been doing recently ? Retire, go contracting, or just find a job else rather than put up with it any more.

    But I'm sure there will be a fresh compulsory programme, based on squeezing out people who didn't top out on the "CAMSS" quiz...a massively irrelevant bullshit bingo quiz which we were required to "Pass" as a sign of being up to speeed.

    Not surprising to see GTS kept on the side lines...absolutely stacked full of dead wood from my experience apart from one or two bright sparks. Whilst I would selectively buy from my former employer, I wouldn't touch that part of the business. Which is why other parts of IBM will go out to the market rather than partner with them.

    1. Anonymous Coward
      Joke

      Re: No compulsories in the UK

      So compulsory redundancies will continue to occur until employee morale improves?

    2. cashback
      Trollface

      Re: No compulsories in the UK

      Staff morale was on the floor last year, it's in intensive care now.

      I was turned down for the voluntary redundo, "too valuable" apparently. I await my rewards ;)

      1. Anonymous Coward
        Anonymous Coward

        Re: No compulsories in the UK

        You weren't too valuable. The only people who got accepted were those close to retirement who were on fat pensions anyway. The rest of us who applied weren't accepted. They didn't even do the decent thing and tells us why we had been rejected. In fact they didn't even bother replying at all.

        Then again, considering how many applied, it would have taken some time to do this. My guess is that you were told you were too valuable by your manager in a vain attempt to raise your morale.

        Most of us are either leaving for work elsewhere, or sitting around doing as little as possible until the inevitable next round of redundancies. There's no work because all the salesmen got sacked, and we keep getting told to "transform" ourselves to align with the new "strategy". But of course, there's no funding whatsoever. Education is banned, even if it means turning up at a customer and working from a Redbook. Non-customer travel is banned, so we can't even meet up with colleagues and learn from each other.

        Instead we have countless "webinars" and "video blogs" all of which spout out the same marketing bullshit with no actual content whatsoever. Apparently wasting 40 hours of our time each year watching this shit counts as education now.

        Nobody's had a pay rise for years now (they're banned too) and the rewards for doing well each year are so minuscule that there's no point in trying any more. Because we've all got email on our phones now, and there are no longer any offices to go to, we just do what we want all day, which to be honest is actually quite nice, considering we're getting paid for it. Occasionally we get dragged into talking to customers and pretending to know what we're talking about. Honestly, I could probably get a part time job elsewhere and I doubt anyone would notice. My manager wouldn't. I've never even met him.

        Anon because I still work there. Sort of.

        1. cashback

          Re: No compulsories in the UK

          "The only people who got accepted were those close to retirement who were on fat pensions anyway"

          Not in my area. People in their 30's and 40's were accepted, band 7's and 8's.

        2. Anonymous Coward
          Anonymous Coward

          Re: No compulsories in the UK

          That sounds so close to the situation at IBM Australia it's scary... I expect it's the same across many other countries too... very sad...

    3. Anonymous Coward
      Anonymous Coward

      Re: No compulsories in the UK

      Yes, I'm not sure why IBM has these mandated layoffs which just move morale from bad to terrible. If they told people, "in three months we're going to ask everyone if they would like to voluntarily resign with x terms", people would jump at it.... As you mention, it is not exactly a positive sign when people are jumping at the chance to leave the company, but it would still be much better than the blind side "resource actions" (i.e. layoffs). If you want to be thought of as, forget about great, a reasonable employer, you should give the employees some forewarning which would allow them to find a new position. Employees often don't mind leaving, but dropping people without any warning is just cruel and unnecessary. IBM definitely plans these layoffs months in advance and could provide a warning. It would probably even be to IBM's financial benefit to tell employees that in six months they will be laid off because many of them would leave voluntarily in the interim instead of taking a small severance package... as you did.

    4. Anonymous Coward
      Anonymous Coward

      Re: No compulsories in the UK

      For non-IBMers, the CAMMS challenge or 'training' was an ill-thought out e-learning delivery in an attempt to align the staff with the move to cloud/analytics/mobile/social.

      Rather than incur costs of doing it right (hands on and in classroom) the ideology of spending as little as possible prevailed.

      A spreadsheet of answers was circulated amongst staff. If management thought of looking at how many people scored 100% or close they'd see how widespread this was.

      It's likely some of the UKI management will read this and all the better if they do as they very rarely get honest feedback on the internal connections site.

  5. Amorous Cowherder

    Ermmm...

    Why is Honor Blackman shown in the lead pic on this article?!

    1. Richard Taylor 2 Silver badge

      Re: Ermmm...

      Why not? Always gloriously and classically decorative - unlike Paris :-)

    2. Anonymous Coward
      Anonymous Coward

      Re: Ermmm...

      Looks more like a reptilian humanoid to me.

  6. Erik4872

    Possible dead wood cleanout?

    Since IBM is actively trying to remake itself into a consulting firm that just happens to write software, I'm guessing these changes are being made to manage out anyone in their hardware product organizations.

    It's so strange to see such an iconic company that basically defined a large chunk of business computing in the 20th century like this -- selling off anything that involves physical hardware to the highest bidder. From what I've heard from colleagues, it was always kind of a strange place to work, but lately it has taken on a whole new level of strange.

    In any org that large, there's bound to be a fair amount of dead wood hiding out. I work for a fairly large multinational and we see it all the time - multiple layers of management that basically exist to provide promotion opportunities for key staff, whole product divisions whose product has been cancelled, but somehow they're still there, and so on. Cutting or moving truly dead wood is one thing, but from what I've heard, IBM has started hacking off the living bits now. I'm sure it will get worse as the entire management tree in each of those silos they're looking to kill starts scrambling for survival and throwing the actual workers overboard.

    I wonder what will happen when businesses finally migrate completely away from mainframe, iSeries and AIX...it'll be interesting to see a massive top heavy org like IBM try its hand at white-shoe management consulting as its primary business.

    1. cashback

      Re: Possible dead wood cleanout?

      "I'm guessing these changes are being made to manage out anyone in their hardware product organizations."

      Nope.

      It's been a bizarre, knee-jerk response to the shit Q3 results. There is virtually zero bench in the areas targeted (services not hardware) so all revenue earning individuals.

      1. Erik4872

        Re: Possible dead wood cleanout?

        Interesting, so it's even dumber than I thought. My assumption was that they would be going after the multiple product managers, marketing people, customer liaison people, etc. that would have been totally redundant in each silo. My experience with IBM is as a customer, and an acquaintance of lots of people who have cycled in and out of there over the years. As a customer, I can tell that, right now, they're just too large to effectively address questions. Hearing the war stories from former employees, it sounds like this huge bureaucracy is basically self sustaining and you end up spending more time playing in that world than doing actual work. (I see a little of this in my company, but I'm a product engineer, so we need to produce real stuff.)

  7. The Godfather
    Pint

    Gadzooks...

    IBM's strategy has been astute, and successful...hope this will not reverse things.

  8. Brett Weaver

    When we have flying cars...

    "I wonder what will happen when businesses finally migrate completely away from mainframe, iSeries ..."

    I don't know about AIX, but the mainframe and iSeries will be here for at least another 25 years..

  9. theExecutive

    IBM and Cloud

    I see jobs with Chef, Puppet and AWS, is IBM entering the CLOUD, if so you need the staff and the product, remember if you see a bandwagon, its too late..Will be interesting though

    1. Anonymous Coward
      Anonymous Coward

      Re: IBM and Cloud

      "I see jobs with Chef, Puppet and AWS"

      None of which require or even make you think of the involvement of IBM.

      Also worth noting that whilst AWS is big in the website world, Azure is about to overtake it by size in revenue. So the most significant piece of cloud estate at least for the next few years is likely to belong to Microsoft. Which IBM is particularly not well positioned to coexist with.

  10. Anonymous Coward
    Anonymous Coward

    Remember, it's been 6 years of redundancies

    We've had 6 years of redundancies in IBM UK, which I include the pensions debacle which kicked people out in 2009. Every year redundancies, all short term fixes to help the share price, at the expense of customers. Every year it has got worse with more and more leaving who are actually doing the work.

    So much "robbing Peter to pay Paul" in IBM UK, people firefighting from one account to another. Many having the reputation of the "account from hell" to work on, and then the customer leaves IBM. We sign another few to replace them and the cycle starts again. Less and less people now available in the UK to actually fix all the problems out there.

    Personally I could never....ever...recommend anyone to work for IBM UK. I'm a GTS techie by the way, one of the ones doing the work!

    Also, in a strange way, I would actually respect HP more for how they announce redundancies, in a more open and honest way. IBM hide them, IBM split them up amongst many sub organisations and locations to mean they don't have the big numbers HP announces. I know of 5 parts of the IBM UK organisation doing it, amounting to probably about 750 people, but I am sure there are more. Many compulsory as well as people going voluntarily. 15%+ came out of our organisation, imagine that across the whole of IBM UK, it's over 2000 people!! But that won't make the news anywhere. Kudos to HP for at least being honest.

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