Some @charlesfitz reactions to Barron’s excitedly bullish cover story on IBM. I for one was excited they used “Lost Decade” on the cover! Twitter thread repeated here:
Barron’s makes its semi-regular pitch for IBM’s imminent reincarnation in this week’s cover story 🧵 /1
Despite a lede calling Watson “one of the greatest coups in the history of public relations”, “a stunt” and “an albatross, symbolizing IBM’s lost decade”, Barron’s quickly starts on the new storyline (kudos to IBM PR, a rare oasis amidst what otherwise a desert of mediocrity) /2
The thesis seems to be IBM could be “Microsoft 2.0”. /3
Microsoft rebounded so why not IBM too? Beyond the handwaving, it isn’t a very rigorous proposition. History rarely repeats and the window for catching the cloud transition was nearly a decade ago. But lets call them “Microsoft Jr” because giant tech turnarounds are so common! /4
There is nothing more damning to this thesis than highlighting that Arvind previously ran IBM’s cloud business. Run it he did – right into the ground. /5
IBM has dropped deep into the Other category from a market share perspective as it missed the cloud transition under Arvind’s watch. The contrast with Satya’s performance building Azure couldn’t be more stark. /6
There is a lot of pablum about hybrid cloud (aka legacy business) and Red Hat as some kind of salvation in the cloud era. I remain skeptical. /7
Remember IBM’s “cloud” business is somewhere between fantasy and fraud and should always be referred to with quotes around the word cloud /8
Arvind does admit Watson was perhaps overhyped (like every promise IBM has made in the 21st century) /9
The spin is IBM will return to “growth mode”, with mid-single digit growth over the next couple years. /10
IBM’s relying on the mainframe cycle to deliver this “growth”, but will pretend 1.) mid-single digit growth is somehow impressive and 2.) it is evidence that they are relevant in the cloud era when in fact leaning on the decades-old mainframe (as has been true for decades). /11
To return to the Microsoft 2.0 analogy, Microsoft is growing at over 20% on what will be close to four times IBM’s revenues after the Kyndryl (which I learned is the Finnish for hairball) spin out. /12
I’ll resist going full Lloyd Bentsen /END