The purpose of this section is to provide a forum for our readers to voice their opinions and thoughts on issues related to OS/2. If you have an observation, concern, gripe or compliment regarding something, please feel free to send them to the OS/2 CONNECT editor for inclusion in this section, at: Title & Publisher or complete the form at the bottom of this page. The opinions expressed in this section are those of the individual writer and do not necessarily represent the opinions of the editor or publisher of OS/2 CONNECT. NOTE: Letters may be edited for inappropriate or offensive language or clarity. |
I have watched with dismay the protagonists in the Microsoft action pursue remedies that seem to me to verge more on the micro-management of Microsoft's internal business than to eradicate abuse in the PC market place. And I was disappointed at the weak Kotar-Kelley response. We have been here before, of course. In the '70s and early '80s, the DoJ hauled IBM over the coals, alleging IBM was stifling competition by pre-loading operating system software on processors at no extra charge providing additional software at no extra charge concealing interfaces. Sound familiar? The case reached a negotiated settlement and never went to trial. IBM undertook to:
It seems to me that this is the sort of regime which needs to be applied to Microsoft's conduct and I fail to understand why Mrs. Kotar-Kelley did not do something like this, given the IBM precedent (admittedly an undertaking not a court decision). However, now that Massachusetts has stood up head and shoulders above the rest, perhaps they will prosecute their objectives in a more statesmanlike fashion, aiming at more general business conduct guidelines than internal interference in Microsoft's affairs. One final thought on all of this; Unless IBM has been back to the DoJ (and I have no knowledge at all on this), the undertaking is still in place and prohibits IBM from selling PCs preloaded with operating system software. But I suppose, given the manner in which the board has marginalized IBM's PC business over the last ten years, there is no one in the DoJ with either the interest or the motivation to write a letter. |
I was recently in conversation with an IBM employee and, as you might imagine, morale was not exactly sky-high. This particular individual was expecting to avoid the cull but passed over to me the following opinions:
"IBM is back now where it was 10 years ago"
All these comments are somewhat overstated, of course, but the one with which I take most exception is the first. When Mr. Gerstner came in to do his company doctor job, the underlying patient was not in too bad a state. The global network was the fifth largest data network in the world and the services business was growing steadily. On the product side there was a reasonable mainframe market and at the other end of the scale IBM had a good half of the desktop market with the 3270, 5250 and banking terminals. Between these the AS/400 was performing strongly and the RS/6000 offered a credible UNIX alternative. As Mr. Palmisano faces up to his company doctor job, however, the patient is in a much poorer condition. The global network has gone and the services business is out of control and actively undermining IBM product sales. On the product side, the mainframe sector has contracted and the desktop is a shambles. Between these, the love affair with Linux has put a question mark over the RS/6000 and the company no longer effuses about the AS/400. So if Mr. Gerster had a mountain to climb, Mr Palmisano is on a trip to the Alps. Looking at the desktop in more detail, all the current products which would make up an IBM desktop - the PC, OS/2, SmartSuite and Notes - have lost and continue to lose market share. I don't see how Mr. Palmisano can let this carry on. He has either to call it a day at the desktop or take the opportunity by the scruff of the neck and make something of it. If he doesn't think he can do anything with it, then whatever else Mr. Gerstner may be remembered for, he will certainly be remembered as the man who lost IBM's desktop market and took Lotus down with it. |
Regarding your July Editorial, "Managing from the Bottom-Up," one of the main obstacles to implementing a cooperative, bottom-up workplace is that there is an adversarial cultural relationship between top-level management and the typical middle- and lower-level workers. Workers tend to look with suspicion and resentment at an elite class of top brass who fire workers on a whim, in order to please Wall Street or to line their pockets with another layer of wealth (will they ever get enough??). Management looks down with disdain at their "underlings" who are obviously "losers" for not being able to "game the system" and grab a cushy top-level position. As long as this adversarial relationship exists, neither management nor workers will be effective, productive assets. Your model works when there is cooperation, mutual respect, and open communication. People who live in totally different parts of the city, drive totally different automobiles, and associate with totally different social environments find it difficult to relate and communicate across that gap. Social structures such as religions, clubs, and volunteer organizations often fail to bridge that gap because they themselves adopt the demographic-isolation model in order to focus on select subsets of society. OS/2 Headquarters July 5, 2002 EDITOR's NOTE: You are right; the fundamental precept of teamwork is cooperation. Regardless of the size and shape of the organization involved, politics too often raises its ugly head. It seems that only in times of crisis do people pull together. Its a shame we have to wait for an emergency to get anything done. But if we can put aside our pety differences and work towards a common objective with faith in both management and worker alike, we can move mountains. |
Congratulations on your recent promotion! I do not know how you feel about it, but I think you have some tough times ahead. Your product business has stagnated for years and I don't suppose you can let the growth of your services business keep taking the strain. So what are you to do with those product divisions?
For a company like IBM, success is a bit like winning an election: you have to capture middle America. The support of the party faithful is all very well - and they do need constant tender loving care - but on their own they won't carry the day. No, you need the hearts and minds of the middle ground. As we know, these are a fickle bunch, always ready to listen to a good story, and the tale that has captivated them over the last few years is that one about LAN-based architectures for core business systems. Unfortunately, this story didn't come from IBM.
1996 | 2001 | Growth | |
---|---|---|---|
Cisco | 4.1 | 22.3 | 444% |
EMC | 2.3 | 5.9 | 157% |
Microsoft | 8.7 | 25.3 | 191% |
Oracle | 4.2 | 11.0 | 162% |
Sun | 7.0 | 18.3 | 161% |
IBM products | 49.3 | 46.3 |
Your stockholders have had a pretty miserable time of it recently but this does not seem to have impacted much on senior management. If you look at IBM insider trading at, for example, http://quote.yahoo.com/, you will see that various board members have been picking up cheap stock options and then selling them in the market. Indeed, there is a rumor (which I don't believe for a moment, by the way) that sales of wheelbarrows have been booming in Armonk to carry the cash to the bank. (Alas, bagel bags have been more than adequate for your stockholders.) So my first suggestion is that you cancel all stock option plans and align management incentives directly to growth in the stock price.
It cannot have escaped your notice that even when you sell a new computer to the party faithful, you still have to invite in someone else to enable the users to get at it. Then once your back is turned, these people go running around your accounts spreading ideas which I am sure you would prefer they kept to themselves. So my second suggestion is that you stop this head-to-head product competition and get back to selling systems. There have always been niche players claiming - often with some justification - that their products offer better value. But when IBM had a successful product business, these claims were deflected by proposing systems solutions where the whole was greater that the sum of its parts, not least by removing from the customer the risk and cost of getting (and keeping) the bits working together.
So where to start? A good general always attacks at the weakest point and amongst your competitors there is an obvious candidate with a hard-won reputation for product quality, timely delivery and ethical business practices. My big idea, then, is that you create a division out of your PC people, your OS/2 people and your Lotus people with a mission to build a desktop solution. The division should be led from the software side (not forgetting my incentive ideas, q.v. above) with the challenge of capturing a respectable share of the desktop market within a reasonable period. Naturally, the party faithful can be relied upon to give you a good send off and after that - things should develop their own momentum. (This is only a start, remember: don't forget other things like the recently announced Cisco/EMC/Oracle development agreement.)
So there it is, then: focus and systems! I know this is not what you're doing, but you'ld expect me to suggest something different, of course, because what you are doing isn't working.
But whatever you try, be assured you will always be in my thoughts. It might also be helpful for you to reflect from time to time, if not every second of every day, that there is only one line item on the Performance Appraisal of a CEO: the stock price. Oh! And that reminds me, I almost forgot: you don't need to set up progress reviews with me - I will get a daily update from the Wall Street Journal.
Yours ever,
- Derrick Price
A Hopeful Stockholder
March 18, 2002
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