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It seemed to me that a much better comparison could be made with 1990 results. Although in that annual report the then CEO, Mr. Akers, was wafting lyrical about the potential for services growth, services contributed little, if anything, to the 1990 results: 1990, therefore, is probably the last year in which IBM's revenues were entirely product driven. In that year, IBM's gross revenues were £69bn.
In 2000, IBM's revenues amounted to $88bn. Of this, $33bn is attributed to services, leaving $55bn attributable to product. It is apparent that IBM has lost significant market share and suffered severe damage to its core product revenues over the last ten years. To some extent this has been covered by the commendable growth in services revenue. However, at a labour intensive 25% gross margin for services compared with a capital intensive 80% gross margin available on, for example, licensed software, this has been a questionable trade-off. There is a clear opportunity for a product fight back!
And the fight back does appear to be focusing on highly profitable licensed software. However, nowhere is licensed software more pervasive than on the business desktop. If you look at an average desktop, what you will typically see is an IBM-compatible PC running an operating system, an office suite, an E-mail service and an Internet browser, with perhaps a fax client and terminal emulation - a pretty ordinary environment, usually dominated by Microsoft products running under NT client. But you will not have to look too hard to find business executives who are not very complimentary about NT client on grounds of performance and stability, which feed into the bottom line though larger PCs and increased helpdesk/infrastructure staff. Despite the genuine complaints about a lack of wide-ranging applications on OS/2, for the business desktop environment IBM has a perfectly viable alternative in OS/2, SmartSuite, Notes and Netscape.
So why is the desktop not a target, when it represents billions of dollars spend each year and desktops are refreshed every three or four years? If IBM cannot pluck the low-hanging fruit from the NT client desktop, where there is a crying need for viable competition, what is its confidence level in making significant inroads into a higher quality installed base such as Oracle?
At the moment we have the bizarre spectacle of IBM shipping PC hardware on which it is losing money, but populating each box with a profitable Microsoft operating system. The effect is that IBM is paying out money on each PC to boost Microsoft's profits and inhibit the efforts of its own software engineers to play in this marketplace.
It would be fascinating to look into the mind of the marketing executive who dreamt this up.
Some time ago I had a problem getting the latest software support from IBM for my WSEB. Many of you readers sent me suggestions and comments, some of which were helpful, and others that were very supportive. I wish to thank you one and all. I would like to thank every one personally but I didn't want to send a form e-mail, so I suspect this way is best.
My problem is about 98% fixed with the remainder just a matter of waiting. The contacts I received at IBM were able to help me with the problem that for some strange reason the local IBM rep's just could not comprehend. Well IBM has its problems, at least the users can stick together to solve their various OS headaches.
Thanks Again.
eComStation has really had no effect on this client I am supporting. As what they want to see are products for OS/2 being developed and supported by IBM or at least available from other vendors. There is still a major market out there for OS/2 in the US, but soon that will dwindle to the few of us who will persist to be rebellious.
I have grown to hate Windows with a passion but, in order to pay bills, I have to go there, at least until Linux picks up in this area or on this account.
Sad, we can't even get support internally on OS/2 from IBM.
Must have been good that night they slept together.
Keep up the good work.
Your comments are right on the mark - I would dare to venture you had to resist writing a book on this topic.
Good fortunes to you,
At least with "PRIDE", you may not always get what you want, but sometimes you get what you need. (Apologies to Mick Jagger.)
The ideal candidate for an IT manager will have understanding of both the technical end of the development process as well as the business reasons why such a process should be undertaken. A lot of the time, the development of an application is done on an ad hoc basis. The funny thing is, the planning required to make a good foundation for a business application is not onerous; it just requires clear thinking about the nature of the information that is being queried.
I have found in my (admittedly much shorter than your) experience that a lot of the problem lies in managers who haven't clearly thought through what it is that they need to be able to find out from their IT resources. A lot of managers look at the whole "IT thang" as a "black art" that they do not want to know about. There is a serious problem in that most managers want the plate brought to them with the food already cut up, and aren't willing to take the time to learn the fundamentals of how their IT systems work so they can tell their programmers how they want it cut up. When one abdicates a choice, a choice will be made. IT managers have been abdicating their choices to their programmers for many years now, and the choices that they've necessarily been making often haven't been the right one from a managerial perspective.
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