I haven’t been writing as much lately. This has been for several reasons, some of which may surprise you. It’s true I’ve had to spend a lot of time fending-off attacks from IBM corporate (more on that below) but I’ve mainly been at work on two secret projects. One is a new documentary series for PBS and the other a new technology startup I’m doing with a partner. The PBS series will be announced when PBS decides to announce it but most of the shooting is already done. The startup has taken the traditional VC route and looks, surprisingly, like it will actually be funded. Evidently if your idea is wild enough and your partner is smart enough it’s still possible for an idiot (that would be me) to make it in Silicon Valley. This project, too, will be announced when the money is dry, hopefully in a week or two.
In the meantime I’ve been working on several columns. One of these, about Yahoo, has been especially frustrating. There was a time when companies actually wanted reporters to write about them, but I guess those days are past. I e-mailed Yahoo corporate communications (twice) and have yet to hear back from media@yahoo-inc.com. I called (again twice) the number they give on Yahoo press releases, leaving messages both times but have yet to get a call back from 408-349-4040. For awhile the Yahoo press site was completely down.
So if you work at Yahoo please ask someone in the press office to give me a call at 707-525-9519.
Back at boring old IBM, heads continue to roll in the current reorg. I don’t want to waste a whole column on this but stories reach me every day showing both the mean spirit and delusion that seem to be the dominant themes these days in Armonk. I’ll give you two examples here, the first being mean spirit:
In June of 2011 IBM gave every employee seven shares (about $1000) worth of restricted stock options, a gift to the workforce on IBM’s 100th Anniversary. Normally the vesting period for such options would be four years. But IBM in this case moved the vesting date back to December, 2015 (4.5 years). It is now like the 401K employee contribution match but unlike any IBM option program I know. So if you’ll still be on the IBM payroll in June but won’t be in December, as looks to be the case for tens of thousands of IBMers, the company gets to keep your money.
And now delusion:
Here’s a VentureBeat story: IBM makes a big bet on software-defined storage and hybrid clouds. It’s a good idea but IBM, being IBM, is doing it exactly the wrong way.
Where IBM has it absolutely right is that managing storage between a data center and a cloud service can be tricky. The cloud folks use very different technology making this an area where most cloud services are not quite ready. So this announcement from IBM could be exactly the right idea. Their XIV technology is very good and if it can be applied to this challenge it could be a big win with corporations wanting to move to the cloud.
But there are two things about this announcement that bother me — five years and $1 billion.
If IBM takes more than six months to produce its first iteration of this service it will be too little too late. In the cloud world, especially given IBM is years late to that market, IBM needs to move at Internet speed.
Also the $1 billion investment is way too high. Even IBM should be able to do this product for $50 million. I think the truth here is that $1 billion is a marketing number intended to impress big customers, to pre-sell some expensive XIV systems, and to keep those big customers waiting years until the technology — by then completely obsolete — is finished.
Finally, pity the poor IEEE, which picked-up information from my Forbes column only to be almost crushed by a negative reaction from IBM. I give the IEEE a lot of credit here for sticking more or less to their (in this case our) guns, but the point I want to make has to do with the varying burden of proof in the case of such business stories.
IBM of course hates me and has worked hard to discredit my work. Yet there is an interesting disparity in how the burden of journalistic proof is being applied. IBM says I am wrong yet consistently won’t say what’s right. Exactly how many employees have been RA’d so far in 2015? How many have been fired outright? How many have been pushed into early retirements by being rated a 3 for the first time in their long careers? And how many of these affected people are age 50 and over? IBM refuses to give any of this information.
If stories are pro-IBM, anyone can write anything without substantiation. If they are anti-IBM, then it has to be wrong. IBM can say it’s wrong, get ugly about it, and not provide any proof of what it says. Ironically, this is exactly the opposite of mainstream news, where the more negative the news, the fewer details seem to be needed.
IBM doesn’t have to discredit Cringely’s work, it is discredited the moment he writes it. He reported that 25% of IBM’s workforce was to be laid off. Yeah, right. And now, complaining about IBM’s burden of journalistic proof. Take note, IBM is not in the journalism business. They don’t have to jump the hurdles set by pseudo-journalists.
Wow a non response from an IBM sock puppet.
See DarthVaderMentor’s post below.
And press releases and blather from shills aren’t fact.
Look at ibms 10-k. They got rid of 50,000 employees and still going. The liar is ibm not Cringely.
IBMs entire business model is screwing people out of their pensions, re-negging on customer contracts by playing bait/switch with low skilled engineers, and juicing stock options for the benefit of management. A pirate company by any name. Or is that just big business in the modern world? Take the money but deliver as little as possible.
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My only question is how do customers keep getting suckered into such chicanery?
And today IBM was sued by a public pension for misleading investors related to value of its chip business.
Second!
It must be an odd position, indeed, to be a tight-lipped multinational company who is forced to say “yeah, we were planning layoffs, but not as much as this guy said…even though we weren’t gonna tell nobody nuthin.. but NOT AS MUCH AS HE SAID!!!!ONE
ONE???
The “ONE” is a parody of people (with questionable shift keys) who type a lot of exclamation points.
So “wow!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!” becomes “wow!!!!!1!!!!!1!” becomes “wow!!!1!!one!!!!!!!eleven!!!!”.
And all caps makes it more so.
OH!!!one-hundred-eleven!!!!
Unfortunately history over the years has proven Cringely to be closer to the truth than IBM. He may exaggerate from time to time, but IBM propaganda has not been accurate many a time as well. In addition, IBM doesn’t help its case when it keeps its number secret, because that fuels speculation, mostly of a negative nature. So Cringely can crow all he wants until IBM comes out with the cold hard facts.
In the past, IBM gave actual monthly accounting of its employment numbers in the US. Even the employee directory was available publicly in the early days of the Internet. For its layoffs, it gave actual NUMBERS AND DETAILED PROFILES of all employees affected by a layoff.
Today, IBM won’t even publicly state how many employees worked at the company as long as 3 years ago, information that most would consider harmless from a competitive point of view. Why are the stats so sensitive? Maybe the trend they could show is problematic? Maybe they fear that the truth could turn the firm off permanently to Millenials? It doesn’t make any sense to keep even parts of your distant corporate history so secret unless you have something to hide.
Keeping information secret is a problem for the brand’s reputation when you are doing layoffs. In the vacuum of leadership and transparency, Cringely’s accounts have to be reckoned as the true reality until someone at IBM has the courage to come up with the actual data and help save the brand from its current slide to oblivion.
In my business, IBM is out as a supplier since 2010. Coincidentally, my IT organization has had a resurgence is customer satisfaction (internal and external) since then as well. Now that’s my metric that answers all the questions I have.
IBM isn’t keeping the number secret. It is hidden in plain sight. IBM made a point of saying that last year they budgeted $1 billion for layoffs and laid off around 10,000. This year they budgeted about half that amount. How many do you think they are going to lay off?
People I work with tell me the Power chip is going to change things and it seems to have great specs but obviously the market could not care less. I wish someone in the know would write about the failure of the Power chip in the market place.
BTW, I changed my bogus URL. I now own yahoo. 🙂
That plain-sight number is for only official layoffs. Bob wants to count everything, which is the only thing that makes sense, when talking about people losing their jobs against their will.
IBM does not have a lot of people they need to lay off. When they sold their X86 server line to Lenovo they transferred the people they wanted to get rid of to that division. I’m a critic of IBM but I don’t see a need to make up lies like Cringely did.
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Around 2000 IBM invested a billion in Java, in 2004 a billion in their iSeries, in 2005 a billion in SOA, in 2011 a billion in Linux and today I saw they are investing a billion in software defined storage (whatever that is). It seems like as soon as they invest a billion into something they lose the ability to sell it.
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IBM isn’t the only screwed up company. Remember Ballmer threw a hissy fit and threatened to resign if the board didn’t let him buy Nokia. What genius!
Bob doesn’t make up lies. He has trustworthy sources. I suspect he and his source didn’t discuss what the 26% was a percentage of. Most of us, as well as IBM in their denial, assumed it was of the whole company, hence IBM and others, not Bob, mentioned the 100K number.
Ronc,
Then that’s sloppy work on Bob’s part to not pin down whether the number was global or US only. He should have been up front about that when he first reported it.
Like it or not, he came out looking bad here.
I’m not an IBM fan in this. What they are doing is pretty underhanded. But Bob’s chasing clicks isn’t exactly virtuous either.
After a recent “discussion” with corporate HR, I made up a new saying (I like sayings).
“There are many ways of not telling the truth, lying is merely the most obvious.”
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I think this probably fits with current IBM tactics
Even with the shadow layoffs, the numbers are still not coming anywhere near 25% of IBM’s workforce. I see now that Bob is using weasel words to say, “Oh I really meant in the US”, but even there the numbers don’t jibe.
Just admit you were wrong and move on, Bob. This doesn’t make IBM the good guy, it just means you screwed up by believing a less than trustworthy source.
The US number has not been made public since 2010. The worldwide number is published once a year in the annual report, it has so many caveats and notes attached to it no one can be sure of the number, which is want IBM wants.
Sounds like what they are doing with ObamaCare numbers. Positive news gets reported instantly. Negative news they claim they don’t have available.
Wow, I would say the exact opposite has been true historically: every time something hasn’t worked right, the press has been all over it, whereas when access to care (previously unavailable to the individual in question) has provided the subscriber with much-needed (even lifesaving) medical attention, the press hasn’t reported it.
Maybe it’s a matter of perspective.
MikeN’s comment was not historical, but specifically about ObamaCare, a recent phenomenon, apparently in need of promotion by the administration and the liberal press.
I love this off-topic rant. Keep it up; obsessiveness brings a lot of people over to your side.
Great to hear that you are working with PBS and VC again! Looking forward to more info.
Thanks, Greg @ Armonk.
I am one of the large number of employees being laid off from IBM. Last year I was a 2 “solid performer”, now was just told I am now a 3 which is “lowest performers” and need to improve, next day I was given my 30 day notice. Robert is correct on all counts
I agree with Greg. IBM doesn’t have to say anything. They are the most essential company in the world. They don’t have to respond to Cringely’s nonsense.
(signed)
Ginny’s Lap Dog
If I was IBM, I wouldn`t pay a dime for such low quality shilling as yours.
If you are a founding partner in your company, won’t that make it harder than usual to get yourself fired?
I dunno – ask Steve Jobs….
So, if they are shipping a new cloud storage product in 6 months. That would mean it is done. I mean done now.
Big companies don’t buy stuff without crazy qualifications and requirements, RFQ stuff. To sell in 6 months means the heavy lifting has to be done now. Should have been done 3 months ago. If they are starting, they can not possibly make in less than a year, then they can ship in 6 months.
Could the documentary be a continuation to the Triumph of the Nerds documentary? 😛
“IBM in this case moved the vesting date back to December, 2015 … So if you’ll still be on the IBM payroll in June but won’t be in December, as looks to be the case for tens of thousands of IBMers, the company gets to keep your money.”
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Stock options are never “your money.” They’re only the *promise* of money, with a page full of fine print attached. Take that fine print to the bank, try to deposit it, and see what they say.
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Not saying that stock options are never worthwhile, but only a sucker thinks of them as cash-in-pocket vs playing the lottery.
The point of the stock options is that it was a grand gesture to employees on IBM’s 100 anniversary. Now that they are taking so much of the stock back by adjusting the vestment period makes it a mean-spirited publicity stunt rather than a grand gesture.
I’m not attached to IBM in any way, past, present or very likely future, but I wonder about a minor point.
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Most stock options don’t take four years to vest all or nothing. The usual scenario for a four year vesting period would be getting 25% of the shares every year. Even given a 4.5 year vesting period, wouldn’t employees get vested in about 20% of the total shares every year?
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If that’s the case then Bob is in error about losing it all. If that’s not the case, then IBM is really screwing its staff and former employees should band together and file a lawsuit.
When my wife got options, they vested in three years. Zero value before vesting. Now she gets a stock grant, which does vest at 1/3 per year. Of course, she now has to pay taxes when they vest, instead of when thy are exercised…
options vest when they damn well want them to vest. all over the lot. 5 years was standard for USWest and Qwest after them, when all hands got them. when the C-levels got them, it was 2 or 3 years. once one year. whatever suited the powers that run the joint. once the waiting period ran out, the options were executable, without exception, for a limited redemption period. no nibbling at the pie here and there, all or nothing.
IBM didn’t list the ages of people let go like they are supposed to, meaning they are probably in for an age discrimination lawsuit.
The PBC system that people keep bringing up: PBC is a ratings system, it’s supposed to be Personal Business Commitments. However employees are given a standard sheet to copy and paste into their PBC tool. The silly thing is it has service line goals in there that apparently you are supposed to do.
What most folks don’t know is that it’s a quota system. The totals are set. The quota is 1 (5%) and 2+ (20%) Then the rest of the 75% staff have to ‘fit’ into what was the remaining 2 (60%) and 3 (15%) quota ranking. A person that is 2 is “solid contributor”. A 3 is “needs improvement” and is a target for RA.
In the last two years IBM reduced the quota of 2’s from 50% to 35% and increased the 3’s from 15% to 30%.
So even if your whole team is awesome, 30% of them will be up for RA. The manager has little to no say in the matter.
Which means that if you are a good employee and you want to retain a high ranking, it behooves you to be the best employee on a crappy team than just another good employee on a great team.
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Another way of looking at it is that other team members may decide to sabotage your work just so you get a lower rating. But either way, it isn’t excellence that’s rewarded, just a gaming of the system.
Yes, but who in there right mind would take on IBM? They have kennels of lawyers and bottomless pockets full of cash.
IBM seems to a bit like the Titanic after hitting an iceberg – shuffling deckchairs – but they already sold the lifeboats and are throwing the women and children overboard with small lifejackets …
I agree. Be happy that you got a lifeboat. Soon they will run out of those. Its going to sink…
All I can muster is, “Moe, Larry, the CHEESE!
IBM has been in business since 1911 and as IBM since 1924. I suspect it will outlive Cringely. So what will a feud with IBM bring to Cringely? I don’t know, but not much.
One would think that, but those of us that have seen the inside (10-20+ years) have a hard time believing that. The references to Titanic seem all too appropriate. I’m sure the folks at Radio Shack, Compaq, Nokia, Kodak, KMart etc never thought the end was coming either. Personally, I don’t think they will die, but they will continue to fly like a stalled airplane, spinning faster and faster while the stick is pulled all the way back. I no longer own a single share of stock and am happily on the outside watching this unfold. It might not be a big boom, but am almost positive that the debris trail will cover a lot of ground.
Former components of the Dow Industrial Average:
American Locomotive Company
Bethlehem Steel
Chrysler
E. Remington and Sons
Eastman Kodak
F. W. Woolworth Company
Hudson Motor Car Company
International Harvester
National Cash Register
National Steel Corporation
Pacific Mail Steamship Company
RCA
Republic Steel
U.S. Steel
Union Carbide
Victor Talking Machine Company
Western Union
Westinghouse Electric
Wright Aeronautical
Now – remind me again how past glory directly correlates into current relevance?
Well, I do like my ’53 Hudson Hornet….
Victor Talking Machine Company (Tee Hee!)
Hey, it’s right there in the name of the company.
We all just need to keep our heads till this iPhone Siri nonsense blows over,
then the good ole Victrola is going to come back in a major way.
More sales for his e-book. Cringely paid LOTS of money, almost half a million, to get it published early.
Given how IBM has done far more financial engineering instead of real engineering lately, a major train wreck is foreseeable especially when interest rates start to tick up. Benjamin Graham would not be amused
Since Buffett is still buying IBM, I find this particularly interesting: “Graham’s most well-known disciples include Warren Buffett,…who credits Graham as grounding him with a sound intellectual investment framework…”. http://en.wikipedia.org/wiki/Benjamin_Graham . Perhaps Buffett doesn’t expect interest rates to go up any time soon, since the government has forced them to remain artificially low, under the assumption that investment income is evil and should be prevented or confiscated. As soon as Americans realize investing is not evil, and throw the bums out, Buffett will see rates go up, and abandon IBM for greener pastures.
I would be astonished if IBM lasts out the decade in anything even vaguely resembling its current form. It is an empty, withered husk just waiting for a moderate gust of wind to snap it into a pile of kindling.
It’s interesting that Bob says IBM “hates” him. I have no idea why they’re in reaction mode rather than trying to win him over. He’s written extensively about IBM’s history and I dare say would even be sympathetic compared to a great deal of modern tech pundits (airquotes belong around multiple words in that term), who mostly ignore IBM altogether.
PBS documentary? Please be part three of Triumph of the Nerds / Nerds 2.0.1!
Not long ago I read Bob’s “Decline and Fall of IBM”. Early in the book it became clear to me that Bob’s “obsession” with IBM is because he loves it. At one point the old IBM brought him in as a kid to meet with a bunch of real engineers and listen to his ideas politely and respectfully. Most regrettably, that company no longer exists.
I believe Bob wants IBM to succeed and regain its greatness.
You mean the book that was 60% cut and paste from comments from his blog? That book?
This unfolding American tragedy has transfixed so many of us because IBM was once the paragon of American business, but it has become the poster child for everything we all know is wrong with American business. Before people had computers in their offices, never mind their homes or their pockets, they knew about IBM, and what it represented. Bob has the audacity, and the courage, to display the unvarnished truth that IBM now represents, for all to see. It is clear from the comments here and elsewhere that we all have hope that IBM can, and will, once again represent American values that are worthy of respect.
http://wraltechwire.com/ibm-s-work-force-drops-by-50-000-in-2014-under-reboot-/14469352/
The current IBM corporate group from Ginni on down reminds me of the military pronouncements during the Vietnam war (yeah, that one, a long time ago for you history buffs). No credibility, so on the uncommon occasion they said anything completely truthfully, no one believed them. In the end, they won every battle, accumulated a body count that would make any WoWser preen, but did not win the police action.
From what I hear, anytime corporate says anything inside IBM, everyone tries to figure out how the pronouncement nails the workers’ hides the wall. No one believes them anymore. This must have sunk in a little bit, the corporate heads don’t bother trying to rally the troops to meet unrealistic schedules, they just hope it will happen, hacking out bits and pieces to making some semblance of results possible as the deadline nears. I am not sure why companies do this rather than just tell the truth. In a knowledge based company the workers are generally smarter than corporate types, and once you lose the confidence of your workforce you don’t have a company anymore– when the bottom really falls out the workers just say “yawn! Sure, we’ve heard that one before!”.
“. . . the company gets to keep your money.”
Hysterical.
Sleeping Beauty and the Witch step mother— if I get my comic characters correct.
Oh please do keep the chuckles coming in, Bob. “Chuckles” as in nasty Moe from the Stooges.
Namaste and care,
mhikl
Well it looks like 2014 was a warm-up for 2015. The link below reports that global employment at IBM dropped a little over 12% in 2014. Of course, we can’t tell what the US layoff carnage was because IBM won’t publish the numbers anymore, but if past history is a guide to the published worldwide numbers, it’s safe to assume that the US losses were probably in the range of 15-18% for 2014. Cringley’s 2015 numbers may not be that far off when you add in layoffs, forced cheap firings, etc. I have heard several times that the “steady state” US number was to be 45K at some point.
https://www.poughkeepsiejournal.com/story/money/2015/03/04/ibm-headcount-drops-globally/24393745/
IBM is a big story but the bigger story here is your PBS show. It’s been A long time since you gave us a PBS show. I hope it has to do something with computers but not planes. Most likely it will appear in the fall schedule if not next year spring of 2016. I have not heard anything from PBS for this final season..please give us a hint!
He can’t, since they’re secret: “I’ve mainly been at work on two secret projects”
So …..
1. IBM has been spending years cutting costs due to revenue declines and loss of marqui clients (I get around in the industry)
2. IBM has been eliminating staff faster than they deliver value to customers (used to be an IBM employee)
3. IBM has been spending years discrediting Cringley
4. IBM stock is at lows that have not been seen in quite some time
5. Analysts are no longer buying IBM’s storyline (review the earning conf calls); pounding the stock some more
Seems to me like IBM is spending a lot of time an energy on the wrong things, and marketing a state of mind that simply does not equate. I don’t know any company that consumes IT resources that is waiting for IBM – not one. I still know lots of folks in IBM. They are losing years of their life and are now paying retention bonuses and huge salary increases to those that put in their notice.
Yeah… right….Cringley has it all wrong. Hehehehe
And to be clear guys…. Buffet doesn’t give much credence to IBM customers. He sees an opportunity in the stock – plain and simple. Nothing wrong with that. I hope he makes billions and uses the money to fix IBM or better the country.
I wonder what that stock opportunity is that Buffett sees. He’s been buying, so as IBM looses value, he stands to loose from the price drop.
Considering Buffet’s investment style he will do fine 10-15 years from now. Buffet will probably be the most passive “activist investor” in IBM, and I doubt you will see Icahn or anyone else charge into IBM to drive for change. What’s happening at IBM is a somewhat controlled exorcism of people, product and process. Ginny calls it a transformation. She has to use a demonstrative word like that. Others would call it “trying to catch up”. She’s ever the sale person.
The analogy here is to consider McDonalds declaring they are going to move away from burgers, fries, chicken, fish, salads, soda and shakes to pizzas, cinnistix, sodas and garlic bread. Sure, they are consumed by humans (so same market) but that consumption is an entirely different mood, model and customer and at a different financial model. They have ZERO cloud tools that shape up well against the competition.
In the process of catching-up they will orphan and release customers and clients by design. Their issue is they don’t want to lose customers. They “think” they can redefine Cloud in a way that is very different from today’s Cloud mindset. If IBM was transparent enough clients would give them more respect and leave in droves. Again, no one client can afford to wait for whatever IBM is doing right now. Long term, who knows if this will work out for them.
In the meantime being an IBM stockholder is a safer investment of resources compared to being an employee, officer or client.
The only way Buffett can consider holding IBM stock as “safe” is if the dividends plus increase in stock value is greater than other safe investments, like other safe stocks, bonds, bank deposits, real estate. If IBM’s transformation results in lower EPS, Buffett should sell unless he wants to loose money, as the stock value drops.
/.ed article says IBM hires very few engineers outside the H1B visa program:
http://spectrum.ieee.org/view-from-the-valley/at-work/tech-careers/a-tool-for-analyzing-h1b-visa-applications-reveals-tech-salary-secrets