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Comment by dreamcompiler | Hacker News Reader

IBM used to be an engineering-first company. But people are expensive and engineers are some of the most expensive people there are. So when the bean counters took over IBM, they decided to get rid of their expensive people and replace them with cheap, fungible labor. Then IBM embarked on a series of experiments about how they could continue to make money with said cheap labor. This is the result.

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Hard to create value when ditch or reduce power from the value creators and end up nothing but value extractors.

Companies taken over and run by value extractors (finance/business/marketing) over the value creators (engineers/product/creatives) end up in this stagnated, picked apart state when the grace from the value creation or product wears off.

Value extractors need to learn that you must first create value before you extract it. The reason value extractors originally were attracted to the project/product is usually that it has created value.

R&D has very little value to an MBA so it is cut, but long term it is all the value of the company. Value extractors kill the whales before they even can grow up.

Very well put. The same management philosophy happened to Boeing, and I think more quietly to many companies thought too big to fail in the last 50 years.

The difference on impact is interesting. Boeing is an important company because they are one of a tiny number of companies that makes the world's commercial airplanes. Arguably their transformation into a useless junk-heap of a company that can't build good products has been underway for a while, and that's a huge problem for aviation.

IBM is one of many, and their decline wouldn't really matter all that much in the grand scheme of things.

Since IBM bought RedHat, the parallels between IBM and Boeing here are too close to comfort. RedHat is potentially as vital to the Linux ecosystem as Boeing is to the (pre-pandemic) civil aviation sector. If IBM falls apart and RedHat vanishes, the impact on the Linux sector could be almost as bad as Boeing collapsing. Since Linux runs everything that's not a desktop computer or an iOS device, IBM-RedHat failing would be a very major problem for everyone.

I think Suse and Canonical would pick up the slack.

Explain how RH could vanish even if IBM fails/falls apart. I don’t see any scenario where that would happen, sorry. I’m not sure you understand just how entrenched RHEL is in ISP/telecom/Enterprise/finance/banking/insert-pretty-much-anything-here is..

RedHat revenues likely aren't enough to keep all of half-IBM afloat. It's vaguely possible that IBM could go into Chapter 7 if things go badly enough. That's the worst-case scenario I was speaking to.

Ok I get that part, but surely Red Hat/RHEL itself wouldn’t perish as a result?

If a company goes into chapter 7, the entire company is disbanded and its assets are sold off. In that scenario, Red Hat, as a division of IBM, would cease to exist.

Perhaps. My point is that Red Hat will still thrive under whatever parent company they wind up in. Red Hat would still be a thing. A very huge thing, and still a very huge moneymaker. Red Hat doesn’t disappear.

Linux will be fine, people who used RHEL can just moved to cloud and/or Amazon linux or Canonical, whatever that suits them.

The changes could even be by the same people, I'm sure many from RH will not like IBM culture.

RedHat makes much more then just a Linux Distribution, for my part i fear for Ceph.

This is one of the huge selling points for RH IMHO: Since they are open source if the vendor dies the product doesn't. Ceph is an amazing product with some really big customers, it wouldn't go down with the ship.

That said, Red Hat is doing well and I don't see them dying.

Disclaimer: I work for RH but opinions are my own

Last I heard Amazon itself was struggling with migrating from RHEL to Amazon Linux.

Red Hat heavily supports OSS projects used on their distributions. No other Linux companies contributes so much. (SuSE would be second, Hey Amazon?)

> IBM used to be an engineering-first company.

I would argue that this was never true--even from inception. HP was an engineering-first company--not IBM.

IBM was about sales and marketing--they would rent and finance equipment for you even way back.

Now, IBM had world-class engineering, but people forget that a lot of the major companies had great engineering until the 1980s.

This is very true. It was even proudly stated in new employee orientation when I joined the company in the late 90's.

It was always sales oriented and engineering was something they had to do to deliver some of the things they sold. This may be the first CEO that was actually an engineer.

Thomas J Watson Sr. was a salesman.

The pitch must have been like "hey guys, do you want to make some products, or do you want to make some money?"

I think they have enough money that they no longer have to take a risk in research and development. Their strategy is to wait to see what companies are coming up or have a good position of a sector , then they buy them out. Less risk , less overhead, and lower salaries for them to not innovate internally . Plus they get a new client portfolio from the acquisition and new talent.

Having worked for IBM and being a client of IBM in the past with large gov't agencies , i can also tell you that part of their success is liability perspective from the client. I know many of gov't big wigs who simply hired IBM not because of their talent but because if TSHTF they covered their arses with congressional hearing or lawsuits by saying what more could we do than hiring the vendor that made the product.

Nobody ever got fired for buying IBM only works until someone does.

And that turning point is happening/happened.

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