The news this week seem to be reacting to HP’s announcement that they are cutting 33,000 jobs over 3 years. Journalists are looking at HP, IBM, and EMC and re-stating the now-familiar critique of “these companies are bloated and not nimble”.
Are the critics right? Time will tell. Today, three companies are trying to transform and become more responsive to the market. IBM is focused on the emerging internet of things and supporting that entire eco-system of devices. HP is trying to slim down and become more reactive (with an offshore consulting team). EMC has been struggling with their own potential reorganization.
Can companies that have enough employees to fill a mid-sized American city find a way to compete with companies that can support 900 million users with 60 employees? And are the sales models that those large companies rely upon still relevant in the age of open source software and ad-driven profits?
IBM
- IBM working on blockchain technology
Krishna told the publication house that “they are modifying the original bitcoin ideas to build a blockchain that operates without currency, ensures that contract details remain private and makes it easier for companies to embed business rules into their smart contracts”.
http://www.econotimes.com/IBM-working-on-blockchain-technology-91011
What is blockchain?The blockchain is seen as the main technological innovation of Bitcoin, since it stands as proof of all the transactions on the network. A block is the ‘current’ part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database.
- HCL, IBM team up to jointly develop IoT solutions
As part of the partnership, HCL and IBM will combine their technical knowhow and manpower to enable seamless integration of device, connectivity, data platform and analytics for organisations to address some of the most complex enterprise and industrial IoT challenges.
http://www.firstpost.com/business/hcl-ibm-team-up-to-jointly-develop-iot-solutions-2438274.html
Additionally, IBM opens IoT & Big Data units, appoints Harriet Green as GMHarriet Green, now VP and GM at IBM said: “The Internet of Things will help enterprises and governments at every level unlock entirely new areas of opportunity and growth, and no company is better positioned than IBM to be the partner of choice as these organizations embrace its potential.
- Leadership Depends on Clarity and Agility: IBM’s CIO
“As [organizations] get bigger, we tend to isolate roles so people’s skills get too segmented,” Smith said. “We’re working to give people broader roles where people are expected to do role rotations and gain skills that enable them to get better and hone their craft. We have a concept that we’re going to take large teams and keep breaking them down so we know the purpose of each team.”
http://daily.financialexecutives.org/leadership-depends-on-clarity-and-agility-ibms-cio/
Hewlett Packard
- HP’s Job Cuts Reflect EDS Legacy
HP announced 33,000 job cuts over three years this week…Most from the technology services group it had built from Electronic Data Systems Corp., a $13.9 billion acquisition. The job cuts are H-P’s way of creating a more nimble business that can better match customer needs for help with cloud-based computing, or off-loading computing and software to the Internet. It is also a recognition of how badly H-P miscalculated developments in the information technology services market.
http://www.wsj.com/articles/h-ps-job-cuts-reflect-eds-legacy-1442447023
- Hewlett-Packard Company Plans offshoring 60% of Enterprise Service
In fact, Enterprise Services division is not an organic segment of the larger HP group. In 2008 HP acquired the H. Ross Perot founded Electronic Data Systems for $13.9 billion. At that time, HP’s CEO, Mark Hurd was intent on pushing HP towards enterprise IT services. IBM had by then a sizeable market share in this segment due to some strategic acquisitions such as PriceWaterhouseCooper’s for $3.5 billion in 2002. Hurd in 2008 wanted HPQ to acquire a big-revenue earner in enterprise-level IT services segment. The result was the expensive purchase of EDS.
- HP Plans To Keep The Struggling Enterprise Services Unit Contrary To Common Belief
According to Whitman, Enterprise Services is essential to the success of the greater HPE as it starts a life of its own, separate from the parent. For example, she envisions a situation where companies will be hiring HPE’s consultants to help with their cloud implementations, digitization of paper processes and so on. Such consulting works perfectly fit in the domain of Enterprise Service, and that explains why Whitman believes the unit is essential to the overall success of HPE.
- HP Has Enough Workers to Fill a City—And It Needs Them All
The HPs and IBMs of the world have responded to these shifts by offering cloud services and ready-made business applications of their own. That’s a big part of why HP and IBM are shedding jobs right now. “In general software companies are better for owners than services businesses are,” Burris explains. “In a software business, a programmer can write a piece of code that can be used by millions of different customers and users. That intellectual property, that information about a problem, is now made available to a whole pile of people at the same time.”
http://www.wired.com/2015/09/hp-enough-workers-fill-cityand-needs/
Other
- Age-old question: Can commercial software succeed in an open-source world?
Now, Salesforce chief executive Marc Benioff’s dream of taking on not just Oracle but SAP in other enterprise software categories puts it at risk, according to the story. That may be why Salesforce is building up its skills in PostgreSQL, an open-source database favored by many companies that are increasingly wary of relying on pricey databases from Oracle, SAP, and even Microsoft.
http://fortune.com/2015/09/18/open-source-software-threat/
Additionally:As one data point, note that Red Hat, which sells support and service for Linux, is arguably the most successful company built on open-source. It became the first $1 billion open source company three years ago and closed its last fiscal year in February at almost $1.8 billion in revenue. That is not chump change, but it’s a far cry from the run rates proprietary software companies tout. Here’s guessing that the new normal for software companies in the open-source era will look a lot more like Red Hat and a lot less like Oracle, SAP, and Microsoft. And that has to be a sobering thought.
- Can GE buy IBM or EMC?
GE could easily sell those parts of IBM it didn’t want, or spin them off into a new company, and get back most of the cash needed to do this deal. By installing new management and focusing on the Internet of Things, GE would give IBM a new story to tell and, in the process, dramatically increase its value to investors. Buying IBM would also cement Immelt’s own industrial strategy into place, making it nearly impossible for a successor to do to his company what he did to Jack Welch’s outfit.
- Key Takeaways from the Wells Fargo Healthcare Conference: Johnson and Johnson
“Five years ago, our pharmaceutical division at that time was about $24 billion in annual sales, and we lost $8.5 billion to patent expiry, literally over about a 18 month to 24 month period, and you know the margins in that business, you know the challenges that something like that presents. And we made a real decision not to go out and do a major acquisition, which I think would be a challenge to demonstrate value creation for many, if not most of those…We continue to invest in R&D. We’ve got much more focus in our therapeutic categories. And today, literally, five, six years later, we launch 14 compounds, seven of which have been $1 billion brand and things are really making a difference and things like prostate cancer, thrombosis, Type 2 diabetes, range of conditions, and there’s no way we could have done that, if it was an only a pharma business, because it wouldn’t have survived. We had a strong MD&E and strong consumer business. So financially, we think it’s important.”
Photo: Pablo GarciaSaldaña