SourceCast: Episode 19: We Comin’ For You
Supplier Report: 3/12/2016
This week we dive deeper into IBM’s staff reductions and look at how the street is reacting to the cuts. IBM is also helping Hilton cut jobs (potentially) in the future with a Watson powered concierge.
HPE CEO Meg Whitman is saying quite a few things in the press this week… such as Dell is “doubling down on old technology” and why “Entitled Millennials” save HPE money.
EMC better watch their backs… upstart competitor Infinidat is growing quickly and moving into their back yard.
IBM
- Follow Up: IBM Job Cuts Affect 14,000 Workers, Analyst Firm Estimates
To arrive at the headcount job cut estimate, Bernstein took IBM’s historical cost to cut one employee — $70,000 — and evaluated it based on a $1 billion gain that IBM has realized in conjunction with a settlement with the Japanese Tax Authority. The settlement was reported in the company’s 10-K report, filed February 23. Bernstein noted that IBM’s guidance for 2016 already includes the $1 billion Japanese Tax Authority settlement. Divide $1 billion by 70,000 and you get a little more than 14,000 employees to be cut.
http://www.informationweek.com/strategic-cio/ibm-job-cuts-affect-14000-workers-analyst-firm-estimates/d/d-id/1324633
What the IBM Layoffs Look LikeMany of those commentors are not buying the “workforce rebalancing” spin, or at least, think only a small number of the layoffs are motivated by the need to adjust the company’s skill sets. Instead, they believe the majority of the layoffs are a matter of “workforce relocating,” specifically, out of the U.S. to India, Brazil, Costa Rica, and other countries with cheaper labor costs.
http://spectrum.ieee.org/view-from-the-valley/at-work/tech-careers/is-this-months-ibm-layoff-for-rebalancing-or-is-it-really-for-offshoring
Laid-off IBM Employees Urged by Marc Benioff to Join SalesforceCloud-based Customer Relationship Management solutions provider Salesforce is urging laid-off IBM employees to join their team. Marc Benioff has sent in invitation from his Twitter account reading, “Salesforce opens its hands to help @IBM and any laid off workers send us your cv.”
http://www.thehostingnews.com/laid-off-ibm-employees-urged-by-marc-benioff-to-join-salesforce.html
- Seeking Alpha: All Is Lost At IBM
As a reminder, Seeking Alpha has demonstrated an anti-IBM bias since I started reporting on this blog…IBM bulls may note that the company is pruning deadwood, and that it’s avoiding higher payouts for pensions that are already hurting the balance sheet. But good technology companies don’t treat people as disposable parts.
- KPMG Announces Agreement With IBM Watson To Help Deliver Cognitive-powered Insights
“KPMG’s use of IBM Watson technology will help advance our team’s ability to analyze and act on the core financial and operational data so central to the health of organizations and the capital markets. In addition to the unprecedented possibilities for enhancing quality, the potential for cognitive and related technologies to help us pursue new business offerings is extraordinary.”
- Hilton Hotels Teams Up With IBM For New Robot Concierge Connie
Named after the hotel chain’s founder, Conrad Hilton, Connie is a 2.5-foot-tall Aldebaran Nao robot equipped with IBM Watson and WayBlazer intelligence. As a result, it is capable of answering dozens of routine questions that are usually asked to front desk officers like where to dine, arrangement of tours and which transportation to use.
Storage: Dell | EMC | Infinidat
- Dell closes in on Perot sale to NTT – report
The deal has yet to be finalized nor have the two companies settled on a firm price, according to the Nikkei Asian Review. A $3.52 billion buyout would be 30 percent less than the $5 billion price tag Dell is said to have placed on the Perot business.
- EMC competitor to quadruple headquarters size in big move to Waltham
Infinidat, a provider of enterprise data storage technology that aims to be a competitor to EMC, is quadrupling its U.S. headquarters size in a move from Needham to Waltham. The six-year-old venture-backed company announced Tuesday that it’s moving into a 23,000-square-foot headquarters in Waltham in June, from its original 5,900-square-foot space in Needham.
- Infinidat opens multiple offices after sales quadruple
Infinidat today announced it has opened new EMEA offices in London, Stockholm, Hague and Pretoria in South Africa, as well as five locations in Asia-Pac and Toronto, Canada. It is also in the process of moving to a new US HQ in Massachusetts which is treble the size of its current HQ.
Hewlett Packard Enterprise | HP Inc
- ‘They’re doubling down on old technology’ – Whitman takes dig at Dell-EMC
“We have taken very different strategies in this environment – there’s no question,” she said. “And so we decided to get smaller while they got bigger. We decided to lean into new technology while they’re doubling down on old technology in a cost-takeout play. They levered up while we de-levered. And we are super-focused on being fast and nimble for our customers. So both strategies may work. I happen to like our hand better than the Dell-EMC hand.”
http://www.channelnomics.eu/channelnomics-eu/news/2449969/theyre-doubling-down-on-old-technology-whitman-takes-dig-at-dell-emc
Dell/EMC Merger: Position Defense and Why HP Is UpsetMuch of what Whitman says lacks anything solid behind it, making it clear that she’s got the political promise thing down. But, at some point, it might be nice to see one of the “amazing innovations” supposedly coming out of the company. Dell won’t be able to adequately defend against the HP FUD until the deal is settled. Until it has more than one marginally good quarter under its belt, it might be wise to hold back a bit on the rocks.
- Why HPE Beats HP Inc.
But, there is another factor, perhaps more important. HPE has retained the growing business segments of the old HPQ, while HP Inc. has retained the declining business segments, as discussed in a previous piece here.
http://www.forbes.com/sites/panosmourdoukoutas/2016/03/04/why-hpe-beats-hp-inc/#46a81e8f2ae7
- Why Meg Whitman Relies On ‘Entitled’ 22-Year-Olds For Advice
Whitman says “entitled is too strong a word” to define new graduates, but even that isn’t so bad. In fact, the impatience of today’s youth is useful at a $50 billion sales corporation like Hewlett Packard Enterprise. “They refuse to work on things that do not matter,” she says. She receives emails frequently from young hires complaining that a project they are working on isn’t going anywhere. That’s surprising, but it’s also useful. “You would be surprised how many projects we’ve killed because a 22-year-old says, ‘That’s stupid,’ ” Whitman told the audience. “It’s a little annoying honestly.”
Microsoft
- Satya Nadella’s Bold Plan To Future-Proof Microsoft: Embrace Apple iOS, Android And Now Linux
Nadella’s strategy is to get Microsoft apps and services out there, anywhere, even if it means cozying up to rivals like Apple and Android or, now, the open-source Linux OS. Nadella has little choice. Personal computing is increasingly moving to mobile devices, where Windows badly trails iOS and Android. Businesses, meanwhile, have embraced Linux. The operating system itself is free, so users need only pay for service and maintenance costs.
- Microsoft releases SQL database software for rival Linux system
Microsoft Chief Executive Officer Satya Nadellais trying to boost Microsoft’s sales of databases, which help companies store and analyze data. Its goal is to take customers from top vendor Oracle, whose share of the market was twice that of Microsoft’s in 2014, according to IDC. Adding a Linux database also lets Microsoft target the most complicated, high-performance systems, and helps the company sell more to existing customers that use more than one operating system, Nadella said.
- Microsoft Corporation Backs Out From Slack Acquisition
It is widely believed by many that $8 billion was not enough for the acquisition. With increasing revenues, the app has gained great popularity among enterprise users and it is expected to add several new features that will put it in direct competition with Skype. Hence, it is speculated that even if Microsoft would have offered $8 billion, Slack would not have immediately agreed on the acquisition.
http://www.businessfinancenews.com/28101-microsoft-corporation-backs-out-from-slack-acquisition/
Other
- HPE, Dell and IBM losing ground to ODMs
But none of the top players could match the expansion rate of Gartner’s ‘Others’ category, a collection of unspecified players sitting outside the top five. This includes Quanta and Wistron, two Taiwanese ODMs that have found success selling their boxes into hyperscale datacentres from the likes of Facebook, Google and Microsoft. Those outside the top five saw revenues beef up 18.9 per cent to $4.75bn (£3.35bn) and shipments swell 16 per cent to 1.26 million in Q4.
http://www.channelweb.co.uk/crn-uk/news/2450283/hpe-dell-and-ibm-losing-ground-to-odms
- Better Buy: IBM vs. Oracle
With two wins against IBM’s lone victory, Oracle takes the cake. But it’s a tarnished crown, and both tech giants have a lot to prove right now. The big caveat here is that IBM took the growth title which could point to future victories in other areas, too. But my Tarot cards are in for repairs today, so I can’t tell for sure how all of that will work out over the next few years.
http://www.mysanantonio.com/business/fool/article/Better-Buy-IBM-vs-Oracle-6881787.php
- Microsoft, Salesforce Among Winners as ’3rd Platform’ Replaces IT, Says CLSA
3rd Platform technologies (mobile, cloud, analytics, social business) are growing 13% while 2nd Platform (client-server and first-generation internet technologies) is declining 5%. The gap between them is increasing by a factor of 7x […] The 1st Platform was hardware-centric (you were a DEC or an IBM shop) and the machines dictated IT choices. The 2nd Platform was focused on software (companies would characterize themselves as SAP or Oracle shops). The 3rd Platform is services-centric – Platform as a Service. The megaplatforms where apps will run are at the center of the wave – this includes Microsoft, Google, Oracle, Salesforce, Amazon, IBM and SAP are seven – but there will be consolidation around a smaller number of leaders.
Photo: Andrew Amistad