IBM/RED HAT

Let me offer an opinion as someone who spent most of my life with Silicon Valley firms and a few years with IBM.

Just as Compaq did not fix Digital Equipment, or EMC fix Data General or HP fix EDS (or EDS fix HP depending on your point of view ) or Oracle fix SUN or ATT fix NCR, I find it unlikely a Red Hat relationship can fix IBM. Several reasons jump out

IBM has its own culture (still), a CEO and senior staff that has been there for years.. Its a culture that has resistance to change, that through years of infrastructure still can focus on individuals as opposed to the company ( simple example: any marketing campaign at IBM is still more about who gets credit for a lead vs how good the lead was and god forbid did it lead to business... and when business gets done who gets credit .. persons, divisions, etc for it... ). IBMers focus on their own survival , preserving culture, meeting short term metrics and not doing what is right for the firm as opposed to possible personal gain. Its a culture that still puts process first. I recently had a lunch with a SVP of a Fortune 100 firm who exited IBM just a few years back. Nothing has changed ( his words not mine ). I acknowledge my data points are more than one CEO regime old.. but his are very current .

Business Models are suspect. There are certain underlying thoughts that can hinder process. One is the thought that we will be the survivor for years... well maybe... maybe not. And a survivor in what format? Another is the simple thought process that we at IBM give the client the best solution. "Best" is an interesting word. What defines society currently looking for the best solution? A simple example that applied was IBM wars with Unix ( and by close association Linux and Red Hat ). In the IBM world, pride and product design came from running a customers business in the best possible most reliable manner (and they should be given credit for doing that). In the Unix/Linux world the decision was frequently about making my business more competitive and getting to market or adapting/ writing software quicker ( thats why IBM lost ot Unix/Linux folks on wall street ). IBMs best solution and the clients were very different. IBM failed in the PC business because people bought Dell (and others) even though Think Pads were better products by any IBM metric (and most user metrics too). Clients were not ready to pay a premium for a premium product. In the cloud world its about access, choice, security, big data (and its access/analytics) not necessarily building the best cloud because of the IBM name on it.

What exactly is the IBM value add other than name and historic business relationships? Why would I as a Chief Technology officer or CIO who graduated engineering school circa 1995 now consider IBM except for investments in place.. Our technology leaders and decision makers are now 40 or 50 years old, the best technologists in their 30s. Most only know IBM as a Legacy necessity in their lives not as a technology or solution leader to seek out first. It starts right at Engineering School these days. Survey any engineering class, speak to the best graduates and ask them if they are considering IBM? IBM does not even have major development or business offices (besides sales or services ) in many locations that a graduate might be interested in ( possible exception being Austin ). I am reminded of a story an IBM rep once told me about how a certain vendor would never break into "his" client base because of their huge IBM infrastructure -- the clients are now defunct Wall street firms now. IBM for years offered the best technology.. on a variety of fronts.. semi conductors, packaging, creative software and client support... Today innovation is born elsewhere.

I applaud IBM for using their might and taking a shot... Just not sure spending $34B (dollars with a "B") were the best use of the resources left in the coffer. IBM has to think about strategically what it wants to be..How to appeal to the current workforce. Its going to take more than we own Red Hat to take todays CIO and have them move IBM ahead of AWS, Google and others (even that firm in Redmond@!). Just what is going to make IBM more relevant in today's world. Not sure I can answer that. One of my peers suggested they could have spent the dollars on integrating with an auto manufacturer or maybe a music service like spotify or even starting a new initiative with another problem area in society.. Point well taken