As the U.S. pauses to celebrate Thanksgiving on Thursday, Nov. 27, we've prepared a healthy serving of specialized content for the holiday. Today's edition: Five reasons IBM customers should give thanks this holiday season.
5. Bye, Bye Big Profit Target: Under former CEO Sam Palmisano, IBM set lofty 2015 quarterly and annual profit targets. Critics suggested that IBM was sacrificing its long-term R&D, customer focus and innovation amid its earnings-per-share obsessions. Fast forward to fall 2014, and current CEO Ginni Rometty finally abandoned the 2015 earnings targets -- essentially conceding that IBM's hardware, software and services businesses weren't strong enough amid the shift to cloud and mobile computing.
4. Bye, Bye Watson Revenue Predictions: Until recently, IBM also made grand revenue predictions about Watson -- the combination supercomputer, artificial intelligence and Big Data business. Back in 2013, Rometty predicted Watson would deliver about $10 billion in annual revenues by 2024. While promising, Watson got off to a shaky start with some early customers. Instead of making bold future promises, IBM quietly went back to the drawing board to make sure existing Watson deployments are living up to their promise.
3. Everything Goes Cloud: At long last, IBM in fall of 2014 promised to make the vast majority of its software portfolio available via cloud computing. Sure, IBM has offered up cloud apps before. But the early IBM SmartCloud effort couldn't compete with Amazon's all-out IaaS blitz. Alas, IBM seemed addicted to traditional on-premises software licensing. But when IBM abandoned the 2015 profit goals set by Palmisano, current CEO Rometty was able to throw all of IBM's software efforts toward the cloud.
2. Getting Trim: Selling off the low-end x86 server line to Lenovo and the microelectronic business to GlobalFoundries were welcome moves. The "old" IBM would have been far more proactive, exiting those businesses earlier amid the profit margin squeeze. But at least Rometty is taking a hard look at what stays and what goes in IBM's hardware business.
1. Equal Time: IBM has been caught in a dangerous cycle of (A) layoffs with (B) share buybacks. Together, those moves potentially boost short-term profits. But they also potentially undermine long-term R&D, staff morale, customer support and business partnerships. Amid those concerns, it's great to have a third-party site -- namely, Alliance@IBM -- tracking job cuts and business moves at the company. The louder the IBM watchdog gets, the more pressure Rometty will face to get things right within IBM -- for employees, customers and shareholders alike.
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