I always thought that IBM was a declining giant. I just looked up their share price and it has done strikingly well over the past 2 years. Their revenue has also been growing, albeit slowly. Maybe capitalizing on the AI buzz?
* https://ycharts.com/companies/IBM/stock_buyback * https://www.theregister.com/AMP/2024/03/15/ibm_ceo_pay_jumps...
Also, federal US capital gains tax rate is 20% only for those earning $518k+ per year if single and $583k+ of married filing joint. Otherwise, capital gains tax rate is the same 15% as qualified dividends.
In 1990, IBM's market cap was $27B and Microsoft's was $5B.
In 1999, IBM's was just under $100B and Microsoft's was just under $400B.
For the last decade+, IBM has hovered (rather wildly) around $160B, while Microsoft has grown from $250B (post dot com crash) to $2,500B.
so yes, IBM really has been a declining giant relative to their market share in the strong technology sector
IBM selling off more and more businesses might be "the right move" for shareholders and props up the share prices, but it shrinks the overall business and in terms of value creation (where wealth comes from) indicates a shortage at IBM
Companies with 100B+ market cap don't die away. They just fail to continue to innovate and stay relevant - thus robbing their shareholders of even more returns.
This is why companies like sears were considered failures despite lasting for 100 years. Somewhere along the line they lost the plot and forgot how to stay relevant.
MS has (mostly) products and licensing, and as far as I understand, IBM has consulting and licenses. Pretty different in this day/age.
could easily compare IBM with other companies; google didn't have a presence prior to 2000, Apple pre 2000 and post iphone are entirely different businesses, nothing else came to my mind. Amazon? they were around in early days of the dot com (1994!) but I'm not really that familiar with where they stood back around 2000 and didn't want to sample apples and oranges. IBM's other competitors like Digital disappeared, but not because IBM gobbled up their share.
IBM compared to itself has not grown. Other companies have grown, through survivorship bias if no other reason.
IBM invented many of the technologies that went into the early PCs but pissed away their lead with every single one until we find ourselves today where they no longer manufacture anything that can be found in a modern PC as far as I can tell.
From the start of its Wikipedia page:
> IBM is the largest industrial research organization in the world, with 19 research facilities across a dozen countries, having held the record for most annual U.S. patents generated by a business for 29 consecutive years from 1993 to 2021.
I know that in semiconductors they're still doing bleeding edge R&D which they then try to license to foundries. Their mainframe business is still doing quite well too.
And I'm sure they're active in many other niches that I know little about.
They have a very strong brand in traditional corporate industries, which have an endless demand for IBM services.
That said, I’m confident that they know better.
I'm pretty sure I came pretty damn close the one and only time I opted for IBM Cloud (which was called "Bluemix" back then). In fairness, running a PostgreSQL DB in a container wasn't the brightest idea on my part, and it was also my fault for not having backups in place, but when Bluemix ate our entire prod DB, and the multiple-weeks-long back-and-forth with IBM's support only yielded something along the lines of "whoops, that sucks, good luck building a new DB instance from scratch", we rather quickly jumped ship to AWS and never looked back.
I'm sure IBM Cloud is better these days, though it was a bit telling that during my brief time working for IBM my primary job was to build customers' stuff on AWS instead of IBM Cloud. Go figure.