For the past 2-3 years I have been a pain to IBM, correctly pointing-out a number of policies and actions by the computer giant that have shown a pattern of disrespect to employees and customers alike. I can’t argue with IBM’s financial performance but I can argue that this performance has come at a cost that is too high for the people of IBM and even for IBM customers, which is why my 2010 prediction for Big Blue is Customers in Revolt.
Top management at IBM has nearly always come from the sales side of the business and it is that sales side that has been outdoing itself quarter after quarter helping IBM earnings to grow even in a recession. It doesn’t hurt, of course, that lots of IBM revenue comes from its international operations and has benefited from a weak dollar. But a fair amount of this success — at least on the services side — comes from very aggressively bidding for work.
But what happens if your bid is too low to actually make money for the company? At IBM, ironically, that’s not a problem for the sales people. It is a problem for the people charged with actually performing the services.
According to IBM customers I have spoken to, the company seems unable to create a solution and put a price to it that anyone would accept so the sales organization appears to sell almost anything at whatever price they can get. They collect their commission and move on to the next deal, leaving behind a mess for the service organization to deal with.
Dealing in this case means cutting costs to the point where the contract is profitable even if not truly fulfilled. Because there is such a big disconnect between the price of the contract and the cost needed to deliver it, crazy things are done, starting with offshoring on a massive scale.
While offshoring is not intrinsically bad, it leaves almost nobody working in the data centers, which are necessarily back in the U.S. When the server folks are thousands of miles from the equipment, how does the equipment get installed? Who does the hands-on work? If a machine breaks, how long does it take to get someone there to fix it? IBM customers are learning the rueful answers to these questions.
IBM is also building several new “global delivery centers.” One of these is in Dubuque, Iowa. Why Dubuque? It is my understanding that IBM hopes to reduce its labor costs and one way to do this is by choosing remote locations like Dubuque with few locals who could qualify to be IBM techs or engineers. Experienced IBMers being downsized in places like New York won’t move to Dubuque, so they can be replaced with cheaper (and younger) labor. Dubuque’s lack of native talent means IBM can staff the centers with mostly foreign H1-B personnel, again so they can pay them less and have no long-term benefits exposure.
I find it difficult to see how customers benefit from these global delivery centers.
But wait, there’s more! The offshoring, the spin off of network work to AT&T, the “global centers,” the new internal processes are not much compared to the latest IBM ploy I’ve heard about — the use of used equipment. To save money on its outsourcing contracts, I have been told that IBM is refurbishing old equipment and substituting it for new. The customer pays a service/lease rate for new, but in the IBM data center what’s actually in the rack is used hardware. Since IBM holds the title and lease and customers never visit the data centers anyway, the customers don’t know.
Only I guess now they do know.
If I was an IBM customer leasing hardware that was represented as new I’d darned well want to verify that’s the case. Send somebody to the data center and check serial numbers. What can it hurt? You might save some money on the contract or score some new equipment or both. It’s worth a shot.
Corporate America will tolerate a lot of this kind of behavior, but there are limits, especially when deadlines are consistently missed and deliverables fail to perform as promised. That’s why I predict troubles for IBM in 2010 with customer satisfaction.
Take a look at that contract, Mr. or Ms. CFO (not the CIO — he or she sometimes can’t be trusted in these things), verify the number of machines and bodies that are supposed to be involved. If IBM is using only half the promised labor or half the promised hardware (or both) then raise some Hell.
Remember, it’s your money.
1st
Congratulations.
Grow up!
Lighten up!
jealous
Hilarious!
I can’t speak to the issues raised in the article beyond this one: “Why Dubuque?”
The primary cost of datacenter operations these days is electrical power. This is the reverse edge of Moore’s Law cutting back at the wielder. If you compare industrial-scale electrical utility rates across the nation there is an arc of “cheap power” states that run from the Pacific Northwest (Washington, Oregon, Idaho) through the country to Iowa. Another island of low rates exists in the Appalachian states. In places like NY and CA a large-scale user of power may pay as much as 12¢ per kW/hr. Contrast that with 4¢ in Iowa, or as low as 1.7¢ near the Columbia River dams in Washington and Oregon.
If a smart company is building datacenters today, they are NOT building them in California or New York.
Regards,
–chuck
Here’s the data I was speaking of: https://www.eia.doe.gov/cneaf/electricity/epa/fig7p7.html
If you are building and operating datacenters, you would be committing financial suicide to break ground anywhere but those states represented in white.
–chuck
Dubuque is NOT a data center, there is no raised floor, no servers other than what is needed to support the facility. It’s just a body shop with unqualified staff (only high school deploma required). They are already getting in trouble for the H1B visas, as that does not fulfill the deal they made with the local government for all the tax breaks and other incentives they got. I found it comical how bank bail outs were getting all the press when this deal was announced, well, IBM, coming off of one of it’s most profitable years ever got millions from Iowa and Dubuque to put this there. Bail out, “Incentive”, “tax break”, it’s all public money going to a private entity as far as I’m concerned.
I went to a Dubuque/IBM computer science job fair at Univ. Wisc-Platteville last January. The opening presentation sounded impressive, but the managers at the perimeter tables seemed like they were all looking at their watches. The happiest person there was the lady giving out little blue IBM keyring flashlights and fliers with instructions for applying online.
I know of exactly one person (not at the job fair) who got a Dubuque-IBM DB programming job right out of school.
The flashlight is nice and bright.
chuck makes a great point, a major cost these days is power, google for example is building data centres near hydro electricity plants and is even applying to get into the power industry.
so i imagine that running cost and as bob points out personnel costs are major factors. these days a data centre really shouldn’t take much in the way of upkeep though, if server hardware fails im sure that these days what ever was running on it can get moved to another server remotely (even if its not vitualised in the first place) … data centres just dont need that many people these days.
what i dont get about this post though is that if ibm sales are getting contracts below a profitable level how is ibm making profits? could this not just be a case of the service section bitching and moaning?
Ah, but you are assuming the Global Delivery Centers are DATA centers, which I don’t believe they explicitly are:
“The center will provide innovative application development and support services to modernize older and less efficient IT systems for state and local government agencies and universities. Additionally, IBM will accommodate work from telecommunications, health care and other U.S.-based clients in the center with a focus on modernizing IT applications through process excellence, tooling automation, and asset re-use.”
Might be a data center, sure, but then why do none of the IBM press releases CALL it that? Why do they make no mention of racks or numbers of servers?
Agree. The pitch sounded more like “call” center than a “data” center.
Why? Because a Data Center implies technical expertise, and a Call Center implies chimps with phones. Better to ask why most of the media reports this gibberish as fact.
Here is something about IBM’s rather questionable behavior towards their employees, rather than their rather questionable behavior towards their customers (sometimes you really have to wonder who, if anyone, they are trying to please).
UK Parliament discusses recent IBM actions:
http://bit.ly/6k1keF
Angela Eagle should be fired. She makes it clear she wants nothing to do with investigating IBM’s redundancy on the cheap scam.
It’s very much a Call Center, with some programing/custom solutioneering attached to it. I run a call center in Iowa and one of my former employees now works for the Dubuque operation. He is utterly competent, but his degree is in English – and they pay him like an English major.
The end sounds a whole lot similar to the joyous Virginia 10-year $2.3b contract with Northrop Grumman; “new” servers we receive are refurbished servers from other agencies; desktops we received were already well out-of-date; network speeds of 100 Mbps instead of the existing 1 Gbps… and I’m just getting started to describe this mess.
Myself and plenty of co-workers had hoped in the past that others would come to realize this mess (they did write about it in the newspapers to some degree… ) but it seems so far that no one really cares enough about this, or just doesn’t get what the issue really is.
It’s even a whole lot of tax money at stake, especially with such a down economy and the state currently trying to figure out a $4b budget shortfall… ah but still nothing seems likely to change…
The consultant’s mantra: “break even on the private sector, make money on the government”. Then they (and the other Right Wingnuts) bitch about the government being stupid and wasteful (well, until they demand a BailOut, of course). Oh, and more often than not, those smart government guys who claimed to be saving money by OutSourcing to these scumbags take jobs with the scumbags. The revolution will be blood in the streets. Port-au-Prince could be your town.
You’re proving the point of the right wing nuts. That if the government cared about our money as much as we do then it would not be possible for a business to make money on government jobs while only breaking even on everything else.
Tell that to Duke Cunningham and his friends. It’s the Right Wingnuts who push for OutSourcing, using the lie that it saves money. It doesn’t. It only moves money from employees to capitalists. The IBM tale here is exactly the issue.
Perhaps the confusion here is that the right wing nuts are concerned with principles while the left wing nuts are concerned with principals.
Seems rather simple to put it in a political context. Wasnt is Palmisano and Gates sitting at Obama’s right hand shaking and playing smiles? It has nothing to do with political standings. Righties and Lefties dont want to pay for American Labor. And when they do there are not alot of technical companies out there that have a model that supports it. Go buy a dell PC. Hell just price one. And at the end when it talks about warranty, pick the 3 year premium that will direct your support to an english speaking U.S. technical person. Look at the price of it. How many people do you believe consider this? I am betting not enough.
Magoo has this right. This has noting to do with party; it is with the status quo political system. Mr. O has been sharing a stage with Sam while he ships job off to BRIC countries.The media is too timid to report this, but is this a surprise given the number of IBM ads in the NY Times and on the major networks? He who has the money makes the rules.
You are right about the adage that he who has the money makes the rules. Unfortunately, in the case of IBM they not only make the rules but in many cases they are skirting or maybe even breaking the law, especially when it comes to accounting and taxation. Anyone remember the royalties manipulation tax scandal in the UK, France and Japan back in the early Gerstner years? Does the name Churchhouse the UK whistleblower come to mind?
Agreed. It’s the same business at NG – sales make the contract fit the gov’t requirements and costs; but then the first project manager gets thrown in front of the train as they can’t perform per the contract because of all the deliquencies – which were known at the time of the proposal.
Needless to say, that’s basically the same game at every big company that provide services. Sell at all cost; then recoup 10 fold on contract changes after award. Get tossed on the contract renewal, only to have a competitor do the same.
Call me cynical, but that seems to be the DoD Contractor life cycle. I’m gladly out of it now.
I personally participated in a discussion with a director of finance in IBM as to what ‘new’ meant (the contract I was on at the time explicitly called for new equipment). The director’s stance was that refurbed = new since it was new to the customer environment.
Totally surreal unless you worked in there. If I were any customer of IBM’s I would demand a 3rd party audit to prove new equipment was being utilized if the contract called for such – and the audit would be annual at the least. Cringely is not going far enough.
The earlier question regarding how service makes the contracts profitable is easy. IBM handles these through the following:
1. Client management – the client relations teams will work on scope concerns – trying to add scope or convince the client that the work is not part of the contract.
2. Labor takes it in the gut – IBM expects its employees within Services to work at least 2100 productive hours per year. These 2100 hours are expected after vacation, education and illness. If you take vacation you basically have to work 50 to 60 hours / week to make up for it. By the way, you have to work during vacation and holidays anyway in order to have any hope of keeping up.
The older employees would groan and roll their eyes when Work Life Balance was discussed, I believe the new euphemism is Work Life Integration! Guess you should just live to work in their eyes.
3. If things get totally out of hand the old plan of filling the sky with airplanes occurs. The account team gets slammed for not managing the customer and labor is thrown at the account until things settle down when the incremental labor will mysteriously ‘melt away’
Dubuque and Boulder are the last flagship delivery centers in the US that I’m aware of. RTP was a mixed complex the remainder had smatterings of R&D, Sales, Network etc.
Why Dubuque and Boulder? The few and waning US Government and Financial Contracts that can not ever be sent overseas by regulation. All else gets marked as farmable out side the country.
Any analysis of these sites would show you that these are “hardened,” set back from heavy traffic, Highly secured, and are setup as lights out centers with very few “cubes” especially Dubuque for any non-call center personnel or raised floor bodies. Upper Management is likely remote,not unlike the eye of Sauron. These site have plenty of bandwidth and power and HUGE and HELPFUL concessions from the city government.
The two delivery sites are no where near major R&D universities (perhaps scandal ridden CU) but there is not any R&D at Boulder other than printers for Ricoh.
I suspect ZERO Delivery focused R&D development is going on at these 2 sites. Where are IBM’s domestic R&D sites heading other than into the ground. Despite IBMs topping the charts for US patents, just look at the names and locations of the contributers, then look at the content. It is outside USA that the bulk of hard science is encouraged and funded.
IBM has more inventory to shuffle around than most companies can dream of so I think Cringely’s sources are correct on being suspicious of “new” prices for “old” equipment.
As for the workers being 1000 miles away that is so 1990’s.
If IBM’s delivery center’s are progressive they are pushing virtualization onto the P, Z or I series which they really know how to leverage for customers. Using WinTel on servers like Xseries not in huge HA & clusters is not likely IBM’s strength because the customer is likely too small for IBM to leverage FTEs. An I or Zseries gets installed once and runs forever (longer than an IBM new hire’s career <= 5-7 years), P and X series are installed to a bit less longevity depending on the kit-out.
My indicators for the death of IBM due to over aggressive profits over re-investment.
No big advance for Z/OS or AIX in how many years?
No big advance in tape library and disk farm in how many years?
Where is the next big software – IBM is following the trend and buying up startups or gap fillers to stay relevant, look at their acquisitions over the last decade.
– bought Tivoli
– bought Lotus
– bought PWC
– bought ISS
– bought Cognos
– bought SPSS
– bought Gardium
As for hard science the anticipated nanotech has not arrived from IBM R&D. This ought to make IBM management and stockholders worried.
I wonder how happy they are to be close to Thompson, Illinois?
Thompson IL will probably become the new home of Moffat and several other IBM exec’s who could be caught on the wrong side of the law. What IBM is doing violates many FTC, SEC, Dept of Labor, … regulations.
If congress really wanted something to investigate they should dive into IBM management decisions that have driven so many jobs off shore and trashed a domestic industry.
AIX has had major major advancements in the last 3 to 4 years to the point where one can not only virtualize processors you can take advantage of virtualized memory both cut costs.
What about all the cloud computing promises and colorful TV ads about “building a smarter city, a smarter planet” by bright and happy “IBMer”s?
What about ondemand, and Green. IBM knows they only need an campaign, not actual products. remember, their model is not having what you want, but they can get it for you in 5 years and $300million (or more). THe longer they can string you along, the better for them.
Talking about “On demand”….anyone ever hear what happened with the Fluor account?
They are accurate for the Indian IBMers.
Guess it’s time to sell that IBM stock…
I am going to go ahead and take issue with this particular chestnut from your post: Why Dubuque? “It is my understanding that IBM hopes to reduce its labor costs and one way to do this is by choosing remote locations like Dubuque with few locals who could qualify to be IBM techs or engineers.” Of course IBM is practicing employee shopping by placing this in “remote” Dubuque as wages are lower for everybody when you exit a major metro area but Dubuque has multiple colleges and universities. It’s 90 minutes away from even larger state colleges and universities like the University of Iowa with 30,000 students on campus. Heck in this economy they might even pull some talent from Chicago 3 hours by stagecoach (car) to the East. I enjoy a bit of well thought out IBM bashing (constructive criticism) like the next guy but save the Napa Valley/bi-coastal big city prejudices for small talk on your next business class trip out to NY.
Dubuque is certainly near several universities. But little or on R&D is really going to be done there. In a few years many of those graduates with good degrees will see their take home pay fall behind the pay of teachers — and we can all agree teachers are under paid. IBM may give its now college grads a reasonable salary, but a few years from now their increases will be few and far between; and your health care insurance will more than eat up those raises.
“But what happens if your bid is too low to actually make money for the company? At IBM, ironically, that’s not a problem for the sales people. It is a problem for the people charged with actually performing the services.”
A decade ago I was working for a large, privately owned, and successful commercial printer on the east cost. At that company I was one of ‘the people charged with actually performing the services.’ The quote above could just as well describe the prevailing wisdom of my employer at that time.
Eventually, this company grew week in a volatile market that was rapidly changing around conglomeration. I left for another career. Now, this large, well respected, “high quality” printer with 80+ year history in the industry no longer exists. Treating sales reps as if they can do no wrong is not a plan for success.
You describe all the big and probably middle size IT firms.
Sales droids make promises, techs have to meet promises.
Sales droids get bonuses, techies get no life.
Where IBM sales droids and customer managers shine is convincing customers that everything promised is out of scope.
I admire the ability while loathing the suckersa who fall for it.
Moore?
Maybe there’s an adjunct to Moore’s Law. The processors get more powerful, they get cheaper….but that also means that those that work in the industry get less pay!
So what do you call it when a predicition actually brings about the predicted event?
I can’t resist the bait…
A self-fulfilling prophesy.
where is the sexy voice Bob! can’t enjoy an article without it
“Despite IBMs topping the charts for US patents, just look at the names and locations of the contributers, then look at the content. It is outside USA that the bulk of hard science is encouraged and funded.”
Many of the IBM-US patents are not exactly strong. See, for example:
http://bit.ly/71htUD
It’s good to see Indians, Chinese, and East Europeans get what’s due to them for a change. Many of the IBM software developers and ‘architects’ (and managers) I knew were too fat, lazy, and complacent to bother with trying to improve themselves and their mastery of their craft.
Bob,
Where exactly do you expect these customers to stampede off to when they revolt? The other companies who are doing exactly the same (or worse) things?
It ain’t just IBM, and down here in the delivery trenches (with peeks out to assist the pursuit teams) it looks like big customers care more about costs than they do about service. We’re all Walmarts now, and the customer gets what she pays for.
You got one thing totally right, you can’t argue with their financial performance.
Sounds like a terrific business opportunity, right?
Inertia plays a huge role here, as does the likely management tenure at both IBM and its customers. Think how Sam Palmisano must view this. He’s gutting the company and abusing customers to essentially benefit his own retirement. IBM will hold things together long enough for Sam to get out the door with a lump sum payout. Beyond that point he probably doesn’t care. How many CEOs of public companies DO care? From their self-serving behavior I’d say not many.
So there is an opportunity here for a competitor to take over. It might be a foreign competitor with a different cost structure and management values. It might be a U.S. company with a chip on its shoulder that senses an opportunity.
The wild card here is Oracle which, with its Sun acquisition, is in a position to go pretty much toe-to-toe with IBM. Now Oracle may be as bad as IBM or worse — you tell me — but Larry Ellison IS coming from a different place than Sam Palmisano.
The next 3-5 years should be VERY interesting in this space.
Bob, I would agree from the software and service standpoint. Hardware wise, Cisco appears to be the sleeper with complete domination plans for the corporate server room. Their setups use virtualized servers and network equipment. The presentations don’t show much need for hardware from anyone else. I’m not completely sold on virtualization (VMware and such), but there are definite strengths that balance out some of its drawbacks. Our own server rooms have seen a complete exit of IBM AIX systems. Only the Tivoli backup systems remain.
Two years ago, our own company outsourced IT maintenance functions to India, and larger project functions to IBM. I firmly believe it could have all remained in house with proper adjustment in our IT management. For instance, the Indian firm hired on several of our laid off IT employees to remain on site and perform maintenance functions (the same jobs they were doing before the outsource). Except now those employees no longer have a goal of saving our company or performing preventive and pre-emptive maintenance. Their new goal is similar to that of a call center… just get the case closed as quickly as possible. Also, the employee churn at the Indian firm makes it such that any kind of a request beyond basic tasks will be horribly messed up.
Until our actions meet our words (myself included) and we no longer chase the lowest price regardless of quality (Walmart,etc), businesses will continue to be completely cost driven. Service and quality are worth something, and it must be paid for.
My company outsourced to Argentina with the same result. After the new employees get trained and up to speed, they leave for a competitor. 9 months is the average length of turnover. Service suffers greatly, but it still looks great on paper.
Cringley is definitely right about IBM’s pratices. I hadn’t heard about the new == refurbished but if I had a contract with IBM I’d be performing an audit ASAP.
Unfoturnatley I don’t think the market is ready for an alternate business model to work, and won’t be ready until AFTER a customer revolt. At the end of the day customers look at price first. Customers aren’t savvy or experienced enough to realize the kinds of trick IBM and other companies will play with their contract. Customers look at prices first and foremost. A company coming in with an alternate model would lose out to the IBM salesperson who’s willing to slash prices at any cost.
You forget the software licensing side. With virtualization and consolidation, the opportunities for scams in this space by the Blue Pig are endless!
I’ve been Bray-ing from the beginning that the jewel for Oracle is the Sun hardware. The reasoning: Larry wants, and needs, to take IBM’s mainframe clients. These are the last virgin territory left in Enterprise systems. In order to pull this off, Larry needs a hardware/software stack that can plausibly replace the z/series. With Sun hardware and Oracle database, Larry now has a shot. He has to convince the first Fortune X00 client that COBOL/VSAM/DB2 can be replaced with *nix/Oracle on SPARC. He gets to rearchitect 30 or 40 year old crap into his image. Don’t count him out.
Sounds like Panasonic is signing up to test your prediction!
http://gigaom.com/2010/01/14/the-email-wars-continue-as-ibm-scores-a-victory/
IBM has had a big contract failure in Indiana.
The state of Indiana hired IBM to “computerize” the welfare system.
“Indiana fired IBM on Thursday as the lead contractor on an ambitious, $1.34 billion project to automate applications for food stamps, Medicaid and other welfare benefits.
Gov. Mitch Daniels said the state informed IBM that it will lose its 10-year contract within 60 days because the Armonk, N.Y.-based company made too little progress to fix poor service as required by a corrective action plan ordered last spring.
“Customers in revolt.”
IBM and others are building data centers in obscure places like Quincy, Washington because they have figured out a great recipe. 1) First start with electrical power is that locally generated and 1/3 to 1/4 of a California or NY. 2) Add cheap data center costs (land, construction, etc.). 3) Throw in local politicians falling over themselves to give tax breaks, etc. to lure them. 4) Next recruit at local colleges (in this case Central Washington U., Eastern Washington Un., Wash St., U of Idaho, etc.) for cheap labor. Presto, a low-cost data center staffed by young people lured by a big name employer with job in remote area that reduces the odds of easily lured away for better paying jobs.
Consultant: “Mister Chairman, the customers are revolting!”
Chairman: “Yes, aren’t they?”
(stolen from Spike Jones)
no audio edition 🙁
I worked for IBM service delivery (20 years) and like thousands of folks can testify that this is TRUE, TRUE, TRUE !!! One day their customers will figure out that IBM is a really badly hollowed out shell of a services company. It is all glitz on the outdide with very few guts left on the inside!
Same here. When I joined IBM in 1981, its three Basic Beliefs were respect for the individual; customer service; and excellence. Back then it was a quality organization in which to do quality work. By the time I left in 2007, all trace of these Beliefs had gradually yet completely faded away.
IBM doesn’t have customers, they have hostages.
for thier bids, you have to convert the figures by doubling them and adding $32(million).
they will become more irrelevent over the next five years, but exec kickbacks will help them get contracts for a while.
Yes, Dubuque is a horrid choice, what with being in the state with the highest literacy rate and having good schools, being within three hours of the Sears Tower, two hours of a world top-twenty university, a place where one can get a good 3,500 sq ft house for $250K, having a history going back 250 years, low taxes, low crime, clean air, and the Mississippi River to play on. Too bad Google is making the same mistake with Council Bluffs and Microsoft with West Des Moines.
The amount of talent that doesn’t want to live in heavily populated areas but in someplace quiet, clean, friendly, and affordable is amazing. The real threat is to Dubuque because of the risk of becoming a city with one or two large employers and the related dangers.
Madison is only 1.25 hr away.
Ummm…I have been on WAY to many interviews with candidates in Dubuque…..poor at best. When I talk to “subject matter experts” on TSM and they cant tell me what TSM stands for, that is an indication that there is a skills issue. As far as moving to Dubuque, IBM is not paying most of us to move + we have to take a pay & bad cut. I would have to go from a band 8 to band 5 which is a monster pay cut.
I am training my replacements in Dubuque on how to work in TSM, NBU, BE, Commvault, and dont even ask for Avamar skills they dont exist (until I train them).
Dubuque was a decision based on tax savings, not skills.
Cringley is a moron. Doesn’t have a clue. I would not believe anything that comes from this fool.
Even with the living evidence of her bullet riddled body, the “sages” refused–or did not dare, to question their own assumptions about “that” most enlightened society they idolized.
This is all true… my job is being outsource to offshore and these delivery centers where the pay is low. Debuque is not a data center… I love my job but will not have it soon….
https://www.telonu.com/reviews/ibm
There are a few gripes from people who had been laid off, otherwise there is one single report from an employee who was happy to be encouraged to access the internet.
Isn’t IBM the folks behind the PS3 and Xbox 360? Keep up the good work IBM!
You are confusing their R&D arm for their services division. The difference is night and day and the only thing they have in common is their CEO. Their R&D arm might be nice to work for but their services division is the pits.
My money is on CISCO – with their track record and entry in the Server Business – it won’t be long before they are the new IBM. Good Bye Blue – HELLO CISCO!
Don’t bet on Cisco, my friend. Cisco has given up caring about their customers, they are not innovating but chasing, and they are too big to turn their business around. They haven’t found the right server/storage company to *buy* to enhance their product portfolio. Their support services are (not surprisingly) uninterested in resolving customer issues and the frontline stuff is, in some cases, outsourced to Mr. Cringely’s nemesis, IBM.
The 800lbs gorilla has been cruising on their locked-in customers (they’ve actually managed to convince people that once you buy Cisco, the upgrade path is… well… more Cisco) and their reputation from the late 90s when they actually cared about customers and innovated. The arrogance emanating from the nicely bubble-font rebranded technology-assimilator is legendary in the market, yet people *still* feel that they have no choice.
Look to Juniper (despite the rumour of IBM scooping up JNPR stinking up the air), who has finally figured out that they can leverage their platform in the enterprise market, and Brocade, who has owned the storage and storage OEM market long enough to have some recurring revenue on hand to take chances with their Foundry assets. Even Force10, who has largely become a stiff kitten since resting on their “we can do fast 10G switching and no one else can!” laurels five years ago, is expected to take a kick at the data centre can with more routing and MPLS support. Still no storage play from “the Shrub” and “the Wind”, but total platform integration isn’t always the best plan.
Couple of observations:
First, Dubuque is only a call center, not a data center. The reasons IBM moved to Dubuque are 1. they promised IBM HUGE tax breaks and 2. labor is very cheap there. The press releases said Dubuque was thrilled to have IBM come to town and bring jobs averaging $42K per year to town. Bottom line is Dubuque has cheap labor available and is subsidizing IBM to be there.
2. Cringely is correct, IBM will bid a contract to win at all costs and try to make it up down the road. The fallout is then passed to the delivery teams who have to make ends meet. Cost pressure is such that any labor that is not contractually prohibited from going offshore is sent there as soon as possible.
IBM Global Services is a hollowed out shell. Expect another 10K US IBMers to be fired this year and their jobs to be shipped to incompetent personnel in BRIC countries. The customers do need to revolt as their level of service and expertise is dropping.
“Experienced IBMers being downsized in places like New York won’t move to Dubuque, so they can be replaced with cheaper (and younger) labor.”
Forgive me for the drive-by comment, for not reading previous comments, and for ignoring C’s other complaints about IBM, which I assume are valid. But the move to Dubuque might be an intelligence test: I don’t know Dubuque in particular, but, in general, Iowa is really, really lovely. Not Heaven, per the cliche, but near enough to cause confusion now and then.
Where is the MP3? Just not the same with out it.
But the offshoring of US and European jobs will continue. IBM UK’s programme of redundancy by stealth has now been exposed in the UK Parliament. The recording is at:
http://news.bbc.co.uk/democracylive/hi/house_of_commons/newsid_8452000/8452051.stm
and the transcript is at:
https://www.publications.parliament.uk/pa/cm200910/cmhansrd/cm100113/halltext/100113h0010.htm#10011364000002
This shows that IBM UK staff have strong support in the UK Parliament, and there was very strong criticism of IBM UK’s actions from MPs of all parties. It is now clear that IBM UK has been planning for some time to combine closure of the final salary pension schemes to existing members with a programme of redundancy by stealth aimed at staff over 50. Over 800 staff have been forced to ‘volunteer’ for early retirement, so leaving without any of the usual redundancy or early retirement packages. Some have already left, the remainder will leave in tranches over the next few months.
IBM UK has taken great care to keep within the letter of the law with these changes, but this debate shows that it has not avoided real damage to its reputation. The Minister who replied to the debate can do very little, but she offered strong support. Her concluding words were:
“It is important that the IBM board looks at our debate today and that it takes due notice of the surprise, worry and anger that have been expressed. I have a great deal of sympathy with those feelings, which have been well reflected in the debate, and I hope that IBM will take note of them.”
HP is clawing back bonuses and commissions from sales staff not hitting their targets. think about that. they have paid tax on it (try claiming that back) so they are repaying up to 140% of their bonus.
shame this wasnt done for the banks eh?
All of the outsourcing that IBM and many other American Corporations have been doing for years may end up costing them a whole lot more then they could possibly save. According to Nassim Taleb (The Black Swan) American corporations maybe setting themselves up for a huge potential disaster (Black Swan event) by placing all their eggs in one basket (outsourcing IT services to India). That is a very unstable, dangerous region of the world (nuclear India and Pakistan are not exactly friends). What a great place to put the majority of the worlds (the US is not the only country outsourcing) IT personal. Perhaps, nothing will ever happen but then Black Swan events are only seen in the rear view mirror.
The sad fact is the core of what once made IBM a solid brand name has had all the “fat” trimmed, than the “meat” was “cut” and now they have been sawing bone for the past 5-6yrs. There are some extremely talented and dare I say brilliant employees working at Big Blue… truly they have & had some of the best brains in the world, I know this first hand. Unfortunately the upper echelon sitting in the Blue Ivory Tower focus solely on Qtrly. #’s and slashing what I like to call their knowledge equity and whatever else it takes to meet the short term pocket fleecing… Having worked at IBM for 10yrs and watching as the saw started cutting bone, it was obvious IBM under Sam & crew had lost it’s way and lost it’s core foundation.
MORE ON TOPIC :
Post IBM I was still a big fan of where the online collaboration software was headed and even made a pitch to purchase an annual contract for one of their software suites with my new employer. I’d even gotten approval to move forward with the purchase… except for one big problem, IBM never returned my calls, this was after 4 online requests forms and a 3 direct calls to the sales team. Eventually I did get a my call returned 4 weeks later – only to be told I would be contacted by the proper sales representative. Confused and scratching my head I couldn’t believe or understand why the right person wasn’t contacting me in the first place! Fast-forward 10 day later and a 3rd party reseller called me on behalf of IBM, one of IBM’s “partners”, who were much more friendly and polite however they had come to me with no background or understanding of what I’d requested or even what the prices (that are posted on the IBM Louts Web site) were. Needless to say we went with another vendor for more money. It was the vendor who respond first, most knowledgeable and customer focused. Though we ended it up with a better solution all around it was very disappointing and a bit depressing as an X-IBMer to see how bad things where on the other side… the important side.
If this is any indication of how IBM is selling and responding to leads… well the irony is they’re not going to have many customers to revolt, well at least not new ones.
I still applaud and all those working tirelessly in the trenches at IBM and do hope the company turns around… though it’s obvious things wont until the ivory tower comes down and Sam floats out with his platinum parachute. IBM needs to rebuild the core that once made it so great.
Bob if you’re right, and you usually are… I think I may sell some, if not all of that stock I’ve been holding onto and move those investments over to Apple. At least Apple seems to care about their reputation and their customer base… for now anyway.
As always thanks for the columns Bob, you are the biggest rockstar in our nerd universe. 😉
A close correlation to the hollowing out of expertise at IBM is…. Home Depot. When Bob Nardelli came from GE and packed along a “focus on cost” and “maximize shareholder gain” attitude, the downhill slide began. The first thing he did was replace the experienced staff (that he said was overpaid) and replace them with nearly minimum wage stock boys. Pretty good short term gain.
Except. I can personally attest to it that nearly overnight the ability to get any help or questions answered at Home Depot (HD) evaporated. The quality of products in HD started to cheapen as well with little or no reduction in price.
Nearly the same time HD started this tactic, Lowes began to expand their market. They carried better quality products, and the sales staff generally had a pretty good knowledge about home construction/repair. Within a short time, I pretty much stopped shopping at HD in favor of Lowes. It wasn’t over price, but service and product quality. Although HD is rid of Nardelli, and struggling to get back to where it had been, they lost a ton of ground in their reputation and customer good will.
When there is a solid comparable service to what IBM offers, corporate customers will flee the husband that abuses/beats them. IBM, your customers are not blind and stupid. They just have limited options right now.
Most CEOs of publicly traded companies are schizophrenic. They preach quality and service to customers and employees but their actions are primarily focused on cost cutting and maximizing their own income. It’s shameful.
Now that you mention it… I recall commercials by HD way back when, touting the fact that the staff were professional carpenters, plumbers, etc. That was a long time ago. I can’t remember when I went into a HD expecting to get help. It’s just a self-serve supermarket.
Craig thing is, IBM actually provides a lot of customer support on behalf of Apple.
I’m rolling in my grave
Hardly. You created the beast, which you passed on to Junior, who carried on your legacy.
I’m rolling in my grave too
Hmmmm – sort of reminds me of the stories coming out of Detroit about fifty years ago as Japan was beginning to permanently end American dominance in automobiles. The bean counters had them selling crap and customers felt powerless to do anything about it. Except buy a VW. Or then a Datsun. Or then a Toyota . . .
Global Delivery Centers are not data centers. They are service delivery hubs filled with people, not machines.
Dubuque was chosen because it was cheap for IBM. That is the only reason.
Unfortunately, the number of workers to be found was small, which is why over the last few years, many IBM’ers were given the choice of being layed off or relocating to Dubuque. And of course, moving to Dubuque meant a pay cut to low $40k’s.
The only reason that IBM continues to have accounts in the US is the executive brotherhood of corporate America.
>> The only reason that IBM continues to have accounts in the US is the executive brotherhood of corporate America.
That’s been true since the 703. IBM gear was never the best at anything besides client management; that was their sole goal. Every breakthrough you can name came from some company other than IBM (except for the thermal conduction module, which is pure hardware implementation, not architecture) in the mainframe arena. I’ll grant the PowerPC architecture (the original) was neat, but not original.
Wikipedia:
The first system that would today be known as RISC was the CDC 6600 supercomputer, designed in 1964, a decade before the term was invented. … Thus the joking comment later that the acronym RISC actually stood for “Really Invented by Seymour Cray”.
[…] jobs in the USA. But if you are an unemployed American, don’t get your hopes up – so says Bob Cringely: IBM is also building several new “global delivery centers.” One of these is in Dubuque, Iowa. […]
they are laying off 10000 well paying jobs to hire 1300.. sounds like that is good for the economy doesnt it
and those 1300 are not even well paying
[…] jobs in the USA. But if you are an unemployed American, don’t get your hopes up – so says Bob Cringely: IBM is also building several new “global delivery centers.” One of these is in Dubuque, Iowa. […]
[…] jobs in the USA. But if you are an unemployed American, don’t get your hopes up – so says Bob Cringely: IBM is also building several new “global delivery centers.” One of these is in Dubuque, Iowa. […]
[…] jobs in the USA. But if you are an unemployed American, don’t get your hopes up – so says Bob Cringely: IBM is also building several new “global delivery centers.” One of these is in Dubuque, Iowa. […]
[…] jobs in the USA. But if you are an unemployed American, don’t get your hopes up – so says Bob Cringely: IBM is also building several new “global delivery centers.” One of these is in Dubuque, Iowa. […]
[…] jobs in the USA. But if you are an unemployed American, don’t get your hopes up – so says Bob Cringely: IBM is also building several new “global delivery centers.” One of these is in Dubuque, Iowa. […]
Hi Bob,
Assuming you actually read all of these comments, I wonder if you will have a “look back” column as well? I enjoy reading almost everything you publish and I’ve always appreciated your “look back” to the previous year’s predictions to see how you did.
I’m missing that one so far this year…
Dan
Right now IBM is trying to hire relatively good talent for Dubuque. New hires get virtually no benefits. The pay increases, if any won’t match the cost of healthcare, etc. In time the best talent will leave and will be replaced with cheap talent.
Someday in the not too distant future having IBM in downtown Dubuque will be no better than having a Walmart. The local hospitals will have to treat under insured IBM workers. Stories of the IBM Dubuque sweat shop will get out. The college grads will avoid the place like the plague.
‘IBM is also building several new “global delivery centers.” One of these is in Dubuque, Iowa.’
It’s not clear that IBM is keeping up its end of the bargain in Dubuque:
http://bit.ly/73WMBu
This is outrageous. It has been too long that IBM has rung their loyal employees through the ringer by not paying them suffiecient overtime and forcing impossible deadlines on their workers. My husband manages double the amount of accounts that an average employee can handle with no financial incentive to do so. He has no job security and at any moment we are expecting them to tell him that he can either uproot his family and move at his own expense to some place like Iowa, or start looking for another job. All the while, his job is a remote position meaning he can and has worked from home for years. Wouldn’t not having to pay overhead by having work-at-home employees save more money than moving to a place that charges less for electricity?!? That is just a lame excuse!
I figured they chose Dubuque as a selling point to customers…to eschew the stereotypes of call centers in 3rd-world countries. “What’s more All-American than apple pie eatin’, corn growin’, pick-up drivin’ Iowa?”
Now I think IBM saw Iowa as a different kind of 3rd-world country that they could scr*w over.
What I remember most about IBM was from Sept 2003 when they produced “The Prodigy”, a 90-second commercial featuring a 9-year-old little boy representing Linux being taught about the world by the likes of Shirley of “Laverne and Shirley”, Muhammad Ali, and Harvard professor Henry Lewis Gates. “Linux: the future is open”. Ever since, I don’t think I’ve ever seen anything quite so bizarre from the universe of gigantic corporate conservatism.
Oh, and also, IBM is partially behind the Cell CPU powering the likes of Sony PS3 and Xbox 360 so major props there man. However, I still can’t afford either one of those things (even now).
Sigh.
I guess few fully grasped the significance of this column. IBM is willfully ignoring the letter and spirit of the contracts it signs with its customer. IBM would rather pay the penalties when caught, than do the job right. A great company built on values and principles has now been turned into a group of cheats and con artists.
Anyone who shook hands on a contract with IBM in the 1960’s made sure to count his fingers afterward. IBM has been in the business of bleeding contracts and clients since Watson, Sr. put up the first “Think” sign. You’re thinking about new ways to extract just enough cash from a client to keep it alive. The client’s cash is IBM’s cash. Nothing new here in what they do, just a bit different in how they do it. IBM has pretty much shed all hardware related business, since they saw that Financial Services business consumes far less capital.
The problem will be (already is) that if all businesses do the same, then there’ll be no real productive companies in the economy to pay for services, which are sold by all of the companies in the economy; ultimately consumers buy stuff. If China were Nebraska, it could work, since all production and services occur in one closed economy.
yes, shysters.
please stop using the word “disconnect” as a noun. the words “disparity” and “disconnection” already exist and are good replacements.
Nothing new about IBM cheating it’s customers. I was a Global Services employee in 1996 and we were regularly told to bill customers for overhead activities having nothing to do with the customer account, like department meetings and one on one’s with your manager.
The only reason IBM stays in business is that it’s customers, the people who make the decision to purchase IBM’s products, don’t actually use them themselves. It’s the poor employees of IBM’s corporate customers that get stuck trying to use this crap or get IBM’s service people to do their job.
The IBM outsourcing hurts all. Been part of it, the comments above are true, I
had to lie to get customers to buy into it. Its Really sad.
So Cisco seems to be chasing with the blade servers, but I’m really interested in
your thoughts on Sun/Oracle and having always feared Sun in the past, what
your thoughts are on them and their new Oracle side. They always had so
much innovation as well, in a way its sad to see them go as I had hoped to
go there.
NOT TRUE. I’ve been working on screwed up SO contracts for 12 years. The customers don’t revolt. The customer executives who sign the contracts won’t admit they made a big mistake, especially after paying big bucks for the transition and reducing their own IT expense (and getting bonuses for cost takeout). Instead they make IGS mid-managers’, who had nothing to do with the contract, lives a living hell with complaints–refusing to pay invoices, pressing for credits, and/or trying to leverage penalties against the contract. Or, the customer will try to save face by wiggling out of the contract by terminating services one by one and reducing baselines. The other scenario is that the customer’s CIO/IT executives get fired and then the replacements shove IGS out the door within 6-12 months. Many customers fizzle after six months to three years. I’ve heard no ten-year contract has ever gone the full duration without multiple renegotiations, with the customer reducing services year after year to get even. Customers even walk away from a contract as IGS doesn’t fight very hard against termination.
For IT Customers, One Way to Avoid Being Rip-Offed by any Outsourcing Company: ensure job skills and body count are defined in your contract and ensure these resources exist, specify no overseas labor in remote management and operations of your services. You can even insist resumes with real name be kept on file and up-to-date. You have to manage your side of the contract from day one and be proactive as soon as you notice things begin to slip.
Cringely, did you intentionally word the headline as you did to avoid the perhaps more descriptive, “IBM Customers Are Revolting”? The “nobody ever got fired for recommending IBM” needs to be stood on its head.
You know, there was a time when IBM had tons of dedicated resources for customers, and they are mostly local labor, and they were well paid. That was called the 80s and it led to the 90s where IBM almost went out of business, now, in this decade, everyone wants to be like IBM. Compaq buys Digital, HP buys Compaq, Oracle buys Sun, HP buys EDS, Dell buys Perot.
The customer demands lowered costs, but didn’t want to do the messy work of doing IT for cheaper, so they hire IBM (or any outsourcer) to do it for them, for less cost, and less risk. No one sees how this is fundamentally illogical? But, between C-level and sales people, they know exactly what they are doing, moving risk and pain to someone else that will do it for them.
And for what it’s worth, there are some people that get outsourced to these companies and actually like it. Now they have a real career path in a large tech company, rather than a marginal one in a medium sized widget company.
It’s messy, ugly, unfair and a lot like making sausage, but then that’s capitalism for you.
There isn’t much career mobility in IBM for Americans anymore. I’m not sure where you get the idea that a company that has been laying off ~100ppl/week for the last 5 or 6 years has any kind of career path.
Career success at IBM means “I’ve Benn Missed” when it comes to layoffs. You don’t move up unless there’s nobody left above.
In 2004 I looked at the career stats of SO “resources” brought in from outsourcing acquisitions and the average length of service after being brought into the Blue Pig was 19 months, if I recall correctly.
Meat for the IGS grinder is exactly that.
Bob, you’ve been saying this about IBM for years. I’m surprised they don’t sue you. If customers are being ripped off, they would sue for fraud and breach of contract. But they don’t. And apparently they don’t even cancel their services. So it must not be so bad.
Now I hate off shoring and mass layoffs as much as anyone, but the rest of your comments are unsupported and probably very off base.
Mkkby, I am a current employee of IBM, have been for all of my adult life (just lucky..or unlucky…so far). I have worked in the services group (what was IGS, now ITD) for the last 12 years, so let me tell you straight from the horses mouth…everything this Bob guys has said is 100% accurate. Absolutely, no question. Customer DO leave, constantly, and they due threaten to sue, constantly. IBM always, without hesitation, allows them out of their contract, and often pays THEM penalties for non-deliverance, just to make them quietly go away. The ones who stay do so for the exact reasons listed in the article…they pay almost nothing relatively speaking for the services they receive, and they beat IBM up constantly over it, to get even more, for even less money. So those companies that are interested only in “how much can we save this year”, as many are (including IBM) put up with what they get just because they are getting a tremendous deal financially, even if the quality of what they receive sux.
[…] when Big Blue’s customers start getting tired of the crap they’ve been through, customer service-wise. Posted by Lastangelman at 3:22 am | View Comments | Links to this post […]
Damn Bob … don’t sun yourself on a roof for a while … that buzzing you hear just might be IBM overhead.
This is true, check out the Dela Airlines Account.
Ha!
Delta Airlines. A great example! I was thinking more like Pathmark. I remember all those big meetings with all the execs at Glenridge. Do we still have those buildings? They were all empty except for the meeting rooms.
Any truth to the rumor that State of Georgia is blowing up? I had heard we got it because there wasn’t anyone left to bid after Northrop Grumman pulled out.
Touchee!
Mkkby says:Bob, you’ve been saying this about IBM for years. I’m surprised they don’t sue you. If customers are being ripped off, they would sue for fraud and breach of contract. But they don’t. And apparently they don’t even cancel their services. So it must not be so bad.
Now I hate off shoring and mass layoffs as much as anyone, but the rest of your comments are unsupported and probably very off base.
Your way off base on this Mkkby. It is definitely true.
Another chronic service disconnect comes from the niche tasks that have no corresponding IBM competency tower. Companies have armies of security types.. but what you’ll get from IBM is maybe 1/2 a head – no matter how many people were dedicated initially.
Sarbanes Oxley.. Payment Card Industry,,, just to name a couple.
Interesting reading!
[…] https://www.cringely.com/2010/01/ibm-2010-customers-in-revolt/ […]
[…] https://www.cringely.com/2010/01/ibm-2010-customers-in-revolt/ […]
[…] https://www.cringely.com/2010/01/ibm-2010-customers-in-revolt/ […]
[…] https://www.cringely.com/2010/01/ibm-2010-customers-in-revolt/ […]
[…] https://www.cringely.com/2010/01/ibm-2010-customers-in-revolt/ […]
[…] https://www.cringely.com/2010/01/ibm-2010-customers-in-revolt/ […]
That is NOT true! I do not work at IBM, but we have had very good business with IBM, they are the best. They have saved tons of money for us and we are very pleased with them! I encourage everyone to try IBM and do some business with them. IBM are biggest in outsourcing so how can you not team up with IBM? There is a reason we are biggest and most successful.
Regarding this FUD article. I have always followed your blog and really loved it, I read it every day. But this is too much. This is the last time I will read your blog again. I suggest in the future you do not spread this kind of FUD about IBM anymore, or you will loose your readers. I promise that. Dont write more negative articles, please!
@ MIkael
“That is NOT true! I do not work at IBM, but we have had very good business with IBM, they are the best…”
and then:
“…IBM are biggest in outsourcing so how can you not team up with IBM? There is a reason WE are biggest and most successful…”
So I guess you do mean “we” as in IBM.
Of course I meant “they” not “we”. As I told you, I do not work at IBM. How many times must I repeat that? Are you deaf?! Why do you question that?!
Could be because your entire rant sounds like something some hysterical Marketing airhead at IBM would throw together in a haste to try to lessen the impact of the devastating criticism here?
I have to say, the first para says it all, ‘to win the business they make any quote’ because of they don’t the business is not won – the business in question is offshoring by proxy and its IBM’s clients who are as guilty as any in this charade
IBM does not hire. Increases in staff numbers are because of acquisitions. Standard practice is to use the approved corporate workforce solution, Artech Information Systems, LLC. Artech has recruiters that continually search the web for the desperate unemployed and sign them into year long contracts at half the typical wage. Benefits are minimal medical coverage (50/50 plan) with a high deductible ($1000) at contrator’s expense ($500/mo). There is no break room. The contractors pool their personal belongings make the work environment tolerable: an old microwave and coffee maker, a mini-fridge & coffee cups. They work in window-less rooms, sitting in folding chairs at long tables that have power strips taped down the center. After two months, overtime is no longer approved. Then, the hours are cut back, but not the workload. They stay because it is better than no income at all.
IBM has been able to obtain some very gifted and talented techs for pennies on the dollar, and they do the job, but their motivator is fear. IBM doesn’t have loyal team members striving together, making sacrifices, coming up with innovative ways to improve its products and services…it has slaves.
As a new software engineer, I did some internships and recently accepted an offer for full time. They are definitely hiring the right talent just out of university, and are paying me very well for it compared to a lot of other companies.
Seems like a lot of old-timers sound a bit jaded, but having this kind of opportunity to grow as an engineer from an amazing resource that is IBM is pretty amazing. I don’t plan on being a lifer – if things go sour, you leave. IBM is far from a war-mongering, customer-abusing corporation. They do what they have to do to remain afloat in a shark infested environment that is our economy.
Bob,
another outstanding article. You have got this down and I know all current IBMers really appreciate your getting the word out. I left IBM 2 years ago, and never would go back! It really is a shame, but thanks for looking out !
To Jason.
I really hope it works well for you, but, please be aware that hundreds of thousands of others came before you and have seen good times and bad times. Also, please undstand that what any company wil pay you now fresh out of university is NOTHING compared to what you will deserve in five years. What you believe is good money is probably not. You will learn that they are likely billing 5 times what you take home for your work, and that is not wrong, but should help you understand what is going on.
Yes there are sour grapes, yes there is fear, but many of us have a healthy skepticism toward the decisions being made by the executives in IBM. We have seen stalwart corporations become very sick in the past years (anheuser-busch, AT&T, MCI, EDS, SUN). Some of us even believe that IBM has (on balance) been a good employer and a good corporate citizen, and many of us worked incredibly hard to make it that way, not for the pay, but because we believed in what we were doing. But we are fearful that the sheen of big blue as both an employer and as a corporation is clouding and quite possibly the core of the company has already rotted.
At one time, an employee of IBM was treated as a respected stakeholder and a partner in the company’s success, and worked extra hard because of it. Leaders were well-rewarded and loyal-but-average workers were rewarded better than in other places. Now any employee of IBM is a mule to be whipped ala eastern management methods. At one time a customer of IBM knew that IBM would rather lose money than fail to satisfy them, and the customers paid very well to know things would be handled. They became partners and trusted IBM. Now, many customers know that IBM is not afraid to disappoint then throw lawyers at the situation. They know that IBM will deliver the minimum available (the LEANest product) to meet a contract. It is this change from a flawed-but-good corporate citizen into a transparent maximum-short-term-profit-driven entity that many are lamenting, and hoping to see turn around.
It is almost as if Cringely has spies in IBM, because he did a perfect job of explaining most of the cancer within the company, and my opinion is that a strong look at the sales force’s compensation package and at executive leadership’s compensation packages would bear fruit. IBM can lead again, if they tie compensation to performance that benefits the bottom line. But until they do, as long as the sales force can take the money and run, and the execs can cut delivery capability and get a bonus, IBM will continue its downward spiral.
Another round of layoffs has begun…
We are a major customer of IBM. On Monday of this week they let go a huge share of valuable resources that were assigned to our account. These were largely resources that were caught up in the original outsourcing and made IBM employees at no choice of their own. Now we have lost years of institutional knowledge that cannot be replaced. Another in a series on increasingly “dirty” moves by IBM. To add insult IBM publicly explains the moves as “actions to benefit their customers”. Not only is that a lie, it is truly an insult to current and potential future customers. I only hope Mr. Cringely is correct……… let the revolt begin.
From 2004-2009, I worked in SO, supporting a contract outsourced by a major Telecom provider to IBM. The contract terms clearly stated that the outsourced labor could not be replaced with off-shore resources for the first 4 years of the contract. IBM was true to their commitment… they began aggressively replacing on-shore resources with resources from India, China and Brazil. In addition, the customer had a major lay-off of internal resources that coincided with the IBM actions… almost as if it was all planned. As a result, those of us in the April 2009 RA thought we might have opportunities to do the work for the customer after they ‘realized they cut too deep…’, but, instead, IBM drew from off-shore resources to fill the gaps the customer had created. So, IBM off-shored its resources and then even off-shored the customer roles that had opened up; @ 1/3 the fully burdened costs of US resources.
Just left the GDF in Dubuque 2 months ago..I can’t believe what is doing on there!
Impressive job on your blog. You have made alot of updates since I stopped by a couple of weeks ago.
I want to send quick hi and want to say appriciate for this good letter. I keep searching through the web for some kind of good like that, or at least a website. That coveredwhat i looking for
Best Regards.
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Thanks a lot.
Iowa is staffed with the mentally challenged, the town is isolated, built in the early 1920’s, the dumb are bringing in the dumber, the qualifications matrix they used was beyond comprehension, beneath any set for success I’ve ever seen in decades of client facing experience judged by the results.
Felix Fiorita
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I would strongly suggest potential IBM customers to look what IBM is hiring to run your business at:
https://www-03.ibm.com/employment/us/jobs/columbia_mo.html
As an example the most experience Unix System Administrator, Jazz Level only requires 5 years of experience. The days of 20+ years of experience running your business critical systems are mostly over at IBM and so are the days of you not having to worry if IBM will deliver. Remember the saying ” You never get more than you pay, but often you get less”
IBM plays a continuous game of wack a mole moving the few 20+ experience employees around to the customers who are costing them the most in contract penalities. No penalities forget it.
Plan on off shoring with IBM. They sell contracts to move the support of your business critical infrastructure to places they do not have the skills or skill levels.
IBM has forgotten that what customers pay for is their employee’s expertise. They have made a decision that paying for expertise reduces their profits. I agree that it is only a matter of time that IBM customers will wake up and find out that a 5 year person is unable to deliver what the 20+ year person did. The customer may have saved money but at what cost?
If you get 1/2 a car for 1/2 the price, did you really save money?
How far will 1/2 a car take you?
The Zune concentrates on being a Portable Media Player. Not a web browser. Not a game machine. Maybe in the future it’ll do even better in those areas, but for now it’s a fantastic way to organize and listen to your music and videos, and is without peer in that regard. The iPod’s strengths are its web browsing and apps. If those sound more compelling, perhaps it is your best choice.
Bob, spot on … and the reason I left IBM Global Services (delivery) in 2007 after 24 years. The Mission Impossibles that Sales kept sending our way was causing me to age prematurely. Grateful for the experiences during the good years at IBM but glad I’m now out.
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The x3200 is a good choice it also includes a TPM chip, which is a coprocessor that can hold cryptographic keys that protect information.
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So there I was reading this article on the top 10 reasons why people run a background check, and I was wondering if any of you have actually conducted one for anything other than employment or tenant screening, because some of the other “reasons” seem a little silly to me. I thought some of them make sense, but I can’t imagine running one on a charity or nursing home employee like the article suggests. Seems a little paranoid, but I could be wrong.
Top 10 Reasons To Perform A Background Check
IBM is not just lying and cheating customers for used Servers and others, IBM Chairman Sam Palmisano and his Executives (like Bob Moffat who was arrested by FBI in 2009..Bob Moffat was Sam Palmisano’s fast friend). Before retiring from IBM, I learned that Bob Moffat and Sam Palmisano started ISC Outsourcing by $24B ISC Savings since 2005. There are no basis for $24B Savings. They used this savings to get more revenue for IBM. This is a violations Sarbanes–Oxley Act of 2002 ( To IBM Customers, ask IBM to provide false saving evidences to prove the Savings before awarding IBM Outsourcing Projects. Also SEC will not investigate IBM’s false savings and will stop IBM false savings to promote IBM’s business. Only IBM will improve, if their executives are arrested like Bob Moffat IBM ISC Sr. VP. IBM laid Off more than >200k Americans since 2000. This is worst company. Now they go to IBM’s customers for IBM Service Business and they laying off thousands of highly talented Americans across America. Mr. Obama, stop awarding IBM Government Project. IBM will teach all companies how to lie and cheat and fabricated Savings and Revenue like Used Computers at Data Center. IBM Executives are hungry for IBM Shares to make millions of them selves.
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I know I’m a little late on the topic but wow, first person I see that takes my angle on it. IBM is a joke.
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