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Comment by adventured | Hacker News Reader

It's the consequence of their bet everything on services approach while the global economy stalls out. Simultaneously they gutted the technology side of their company and vastly under-invested in R&D/innovation, instead choosing to focus on financial engineering to fake earnings per share growth.

They should have been at the forefront of cloud services, with a business as large as what AWS is. Instead, they spent their resources on buying back stock and lying to investors about the future. Their financial engineering was so good, they even snookered Warren Buffett, likely ultimately costing his shareholders billions in losses.

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> It's the consequence of their bet everything on services approach while the global economy stalls out.

Yeah that was their strategy the last 10 maybe 15 years. That doesn't work anymore. They have to change. It certainly sucks for folks who work in services, but I can't see IBM doing well keeping tens of thousands of people trained in that until retirement just to provide jobs or to be "nice".

I understand it has been around for more than a 100 years. At some point large swaths of people had to be laid off, just because of the changing business landscape. I would guess when they switched to mainframes from mechanical tabulators, some people had to be let go.

> Their financial engineering was so good, they even snookered Warren Buffett, likely ultimately costing his shareholders billions in losses.

Hmm, not sure, I don't think Buffett is easily snookered, he is not an amateur investor.

I think that's what he is implying here. They were so effective at this, that _even_ a savvy Warren Buffet fell for it.

I was trying to say that it is not that they tricked him because they are so sly. They might have tricked themselves just as well. So it is not that had some secret great vision to take his money. They made mistake and they didn't see them and neither did Buffett.

The stock market doesn't reward investing in R&D because you can't benefit from it in three months.

I see people repeat this but it's not true. The stock market heavily rewards investing in R&D if investors think the research is going somewhere. Biotech companies are a good example.

Tesla is another. Their expected future value is based almost exclusively on R&D, and the stock is massively overvalued in comparison to other manufacturers.

It might be more accurate to say: Boards reward management for the appearance of producing results in 3 months, and there are a lot of bad C-suite managers who are happy to do so, at the expense of employees and long-term prospects, as long as the compensation is high enough.

I like how investors are chastised for both having valuations much about current earnings and for only thinking about the next three months.

Maybe I'm not understanding your comment, but according to Forbes[1], IBM is prominent in cloud services and exceeds AWS in revenue. It sounds as though IBM's doing things right, at least in this space. It may be that in other markets, they've fallen behind or failed to innovate, e.g. the vast mobile market.

1. http://www.forbes.com/sites/gregsatell/2015/04/27/move-over-...

According to the article IBM bought Softlayer and has only just launched BlueMix.

I tried Bluemix and found it unoriginal and a cit crap. Not that the world of cloud services moves according to my preferences, but I'm not seeing it used anywhere else either.

If IBM is "prominent" in cloud services it's from acquisitions. Whereas AWS pioneered the cloud industry.

This is certainly "doing things right" in that it's providing a great exit route for startup founders in the cloud industry. I'm not sure it's "doing things right" for IBM itself.

IBM looks like it's being run by accountants. You can tell because they think they'll get the same results from someone on a H1B visa as they will from their veteran employees. Accountants can never get their heads round the fact that technical folk aren't fungible.

I had a similar experience with Bluemix. One of the biggest turn offs though was the ridiculously convoluted website for IBM's cloud services. Some serious streamlining is in order there. I had no idea where to go or what to do to get the information I needed for simple things like straightforward API pricing, etc.

> One of the biggest turn offs though was the ridiculously convoluted website for IBM's cloud services.

Has IBM ever made a website that wasn't confusing and terrible?

One possible explanation is that IBM actually has no idea what to charge for most BlueMix services.

> but I'm not seeing it used anywhere else either.

Bluemix is a re-branded Cloud Foundry. IBM donates engineering to the Cloud Foundry Foundation.

CF is used in a lot of places.

Disclaimer: I work for Pivotal, the leading donor of engineering to Cloud Foundry. We have our own distribution of Cloud Foundry, PCF, that is a competitor to Bluemix.

Yes, but IBM somehow made CF, which is awesome to use, into a piece of shit offering with Bluemix. I hope their enterprise offering (if any) is better.

cool, new information, thanks :)

I'm still not seeing BlueMix itself used anywhere ;)

One would need a very contorted definition of "prominent in cloud services" to go along with that. BlueMix is still taking its baby steps compared to AWS or Google, and Softlayer is more like an outsourced data center with a bit of a management portal on top.

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