IBM is a dying giant, I've seen it languishing for years. Their massive screw up was a decade ago when they decided shareholder value was more important than having good engineers. They've since gutted their R&D departments and all that's left are duds and underpaid undereducated consultants rented from places like Accenture.
The only good thing to come out of IBM in years is their Hyperscan regex library and unsurprisingly they don't market it at all or build practical applications with it
In the 80's IBM was an unstoppable juggernaut. In the 90's it was Microsoft. Then Apple. Now Google/Amazon.
Conventional wisdom is that, in a free market, a single corporation will grow to rule everything. But that never seems to pan out.
Part of the reason is that the larger an organization gets, the more inefficient and bureaucratic it gets, the less it is able to adapt. See "The Innovator's Dilemma", a book everyone interested in business should read.
The main reason is that corporations run like command economies internally, and have to compete(ish) in a market externally. So resource allocation in a corporation is a bureaucratic, political task. This is why big companies notoriously suck at everything after a while, since internal management just starts pillaging business divisions for resources and pet projects
Large firm sizes are encouraged by state protections like patent law, regulatory capture, and other monopolistic advantages granted by anti free market practices.
The economic calculation problem, described my Mises in his criticism of centrally planned state economies, starts rearing its head in large firms as well [1], leading to the inefficiencies you mentioned.
Oddly enough Microsoft is the only company I can see bucking this trend right now. The other big guys youve mentioned have essentially slumped down into their respective markets and drawn up battle lines, whereas MS really seems to be pushing into new territory. I wouldnt be surprised to see them come back into mobile with a Surface phone that gives Apple a run for their money.
Satya is largely responsible indeed, but he is just executing on the foundations laid out before him. The foundations were shaky, but they were still the right ones. I think too much credit is given to Satya. Maybe people just wanted to see someone better than the previous CEO.
Windows Phone, once they got over to the Metro UI, was quite good. I would say from a design, UI and system perspective, it was significantly superior to Android and within striking distance of Apple and iOS.
The issue with MS isn't whether or not they can build a quality mobile OS (they can), but rather it's whether or not MS can build an ecosystem with enough buy-in from companies to build apps and services.
I'm sad to see MS do so poorly with their mobile OS, considering how good it is.
> ...it's whether or not MS can build an ecosystem with enough buy-in from companies to build apps and services.
I think there might be a titanic fight shaping up in the economy to build out and secure ecosystems in a more Net-centric future. The WalMart diktats to truckers to not drive Amazon loads are just opening salvos in this war, for example.
I see healthy, vibrant ecosystems with a bidirectional value exchange as a way for very large companies to mitigate much of the damage inflicted by their own size. Unfortunately, most large companies are trying their damnedest to build out ecosystems as command and control bot networks, and see it only as a profit source to unidirectionally squeeze. That's tempting because it's so easy, but it means your command and control decisions must be better and more timely than the ecosystem's wisdom of crowds, or you'll suffer the consequences.
The thing is there really isn't a corporate/business market anymore. The company I worked for stopped buying corporate phones and plans and just gives us money every month to put to a BYOD solution. We just need to use a phone with certain security requirements. We also have started procuring software and services to fit into this world.
We still have people buying Blackberries on their own. There are plenty of people who want a phone that's good for work.
A phone that works great with corporate networks, allows for editing Word and Excel documents, could have gone very far a few years ago. Even getting corporate app developers to port their apps to Windows phone would have been easier than chasing Zynga down.
> We still have people buying Blackberries on their own. There are plenty of people who want a phone that's good for work.
This article[1] seems to run counter to your intuition:
> In the fourth quarter of 2016, more than 432 million smartphones were sold, according to a report published on Wednesday by the research firm Gartner. Of those, just 207,900 were BlackBerry devices running its own operating system.
> That gives the Canadian smartphone company a share of the overall phone market of less than a single percentage point. To be precise, it's 0.0481%.
> Even when you include BlackBerry's devices running Android, its numbers are still incredibly low. Last year, CEO John Chen said the company sold only about 400,000 devices in the second quarter.
Blackberry's market share is much nearer my own (i.e. 0 phones manufactured or sold) than it is Apple's or Google's.
I used to have a piece of paper with the top 10 US companies by market cap, decade by decade. You didn't have to go very far back in time to find companies you don't recognize :-)
The list of Dow components is a particularly compelling study. It firms up in the 1920s and 1930s, and is relatively stable through the 1950s, then starts turning over at an accelerating pace.
See also Deloitte's "Shift Index". A Forbes writer has covered this for years. A long-term secular decline dating to the mid-1960s. Measuring return on invested capital.
With existence of antitrust laws, or government regulations in general, it's not really a free market. Both IBM and Microsoft were hit with antitrust issues. Standard Oil or even AT&T are some examples that come to mind. I bet there are countless other examples where consolidation was either prohibited by regulators, or not even attempted in the first place due to antitrust issues.
> Conventional wisdom is that, in a free market, a single corporation will grow to rule everything. But that never seems to pan out.
The extreme scenario doesn't pan out - we don't end up with one eternal corporation that owns all capital. But certainly it pans out in a more realistic scale of size and time; there are and have been plenty of monopolies in many industries, and the overwhelming power and influence of large corporations, and the damage that power and influence does, is well documented.
> *Part of the reason is that the larger an organization gets, the more inefficient and bureaucratic it gets, the less it is able to adapt."
Which is a symptom of publicly traded companies, right? It creates this weird system where finding a niche and serving it reliably year in and year out is considered failure; you're only succeeding if you're constantly growing, which means you inevitably collapse under your own weight.
Just today I had a 10-minute chat with one of my colleagues from marketing about AliExpress. I live and work in Eastern Europe, and almost all the people who do online sales rely on a Chinese company like AliExpress. Some of those people were using the UK as their source of buying merchandise until a couple of years ago, not anymore, it's all China now. The US (and the UK&Ireland) are losing big on this because Amazon's stock-price is blinding them. IMHO Amazon is going to hit a wall in terms of online sales sooner rather than later and the only thing that will be left to save them will be AWS.
if you work or visit China you basically must use WeChat, Alipay, and Baidu. the great firewall blocks the competition and everyone in China uses the homegrown equivalents.
The Hyperscan website (https://01.org/hyperscan) says it was built by Sensory Networks Inc, and then bought by and released as open source by Intel. No mention of IBM. Are you thinking of something else?
> Their massive screw up was a decade ago when they decided shareholder value was more important than having good engineers.
IBM's management believed shareholder value was important, in about the same way Bernie Madoff believed his investor's well-being was important. Which is to say, not at all in actuality.
IBM's management was negligent in regards to shareholder value in almost every way possible.
Believing shareholder value was so important, would require simultaneously believing having good engineers is critical.
The management decided to fleece the company for their own near-term benefit, to the detriment of shareholder value (which is now being represented in the stock price accordingly, and it'll get much worse, soon).
It's not just dying, it's shedding customers. The only reason the stock price isn't in free-fall is because it's cutting costs rapidly via outsourcing and also buying back shares.
IBM Real(1) annual Revenue (in billions of 2016 dollars):
1986: 111
1996: 116
2006: 109
2016: 80
(1) adjusted by BLS CPI Calculator
Dying? How so? Lots of companies have their legacy IT infrastructure built on top of IBM's mainframes and products. Who's innovating fast enough to provide a compelling enough reason to replace all that infrastructure? Perhaps IBM is just stable and uninteresting, like most blue chip companies.
IBM have been what seems like this bureaucratic monstrosity ever since the started. But that was back in the 60s.
I appreciate their perseverance if nothing else. If you look at the fate of companies like Nokia, IBM has some how managed to avoid this what has been meteoric shifts in their business.
Plus competition is always good.
Watson itself clearly was a great product and a big step in the development of AI. Just because the marketing department is making a mess of things shouldn't take away from the work that was done on Watson in the first place.
The only good thing to come out of IBM in years is their Hyperscan regex library and unsurprisingly they don't market it at all or build practical applications with it