Comments
IBM 2Q Results Hint Of Turnaround
Newest First  |  Oldest First  |  Threaded View
TerryB
50%
50%
TerryB,
User Rank: Ninja
7/21/2014 | 10:10:37 AM
Re: Power Servers last forever
Actually discussed that on Chris Murphy's article about CIO's and IBM-Apple deal which is still on your Top 5 list on Home page.

The Crib notes version? What it can integrate with on the back end is the key to this working, if we are indeed talking about enterprise apps coming out of this deal.
ChrisMurphy
50%
50%
ChrisMurphy,
User Rank: Author
7/21/2014 | 9:26:50 AM
Re: Other business shed and efforts to turn things around
Services, yes, but I would say the Apple deal has a whole lot to do with that line item that shows software gross margins at 88% but no growth. It needs to sell more of its analytics software, more mobile management software, and the like. 
danielcawrey
50%
50%
danielcawrey,
User Rank: Ninja
7/20/2014 | 5:37:02 PM
Re: Other business shed and efforts to turn things around
The cloud and services are immensely important for IBM. That's why I think that the Apple deal is key. Both IBM and Apple want to see growth via enterprise, so why not team up? 

I believe that the two complement each other well. Apple's devices give IBM a window for people to use its more complex services. This, in a nutshell, is what I think that this deal is all about. 
Thomas Claburn
50%
50%
Thomas Claburn,
User Rank: Author
7/18/2014 | 5:58:25 PM
Re: Power Servers last forever
>Not long ago, when you got new PC you could easily see difference to old PC. Booted faster, ran apps faster, etc. Now when you switch them out, you don't even notice the difference.

Processors are not what you notice most in desktop PC speed. SSDs make a huge difference in boot time and responsiveness over HDDs. I would argue companies should buy moderately powered PCs with SSDs to replace any existing computer with a HDD. For those moving up from HDDs, the experience will be so much better and work will get done so much faster that the employer will see real productivity gains.
Laurianne
50%
50%
Laurianne,
User Rank: Author
7/18/2014 | 4:09:45 PM
Re: Power Servers last forever
@TerryB, thanks for weighing in. As a longtime IBM customer, what is your reaction to the Apple deal?
TerryB
50%
50%
TerryB,
User Rank: Ninja
7/18/2014 | 2:07:34 PM
Re: Power Servers last forever
They get some revenue from that. I keep both hardware and software maint contracts with IBM. But it is chump change, both cost me about $3500 per year. As machine ages, hardware portion goes up some but nothing substantial.  That can't make up for server falling from $90K to $10K.

You are starting to see that in the PC market also. These things are so good now you can run them for 5+ years now if you want. Even our Corp std replacement policy is now 4 years on desktops, 3 years on laptops. I've argued (and lost) we could stretch longer than that.

Not long ago, when you got new PC you could easily see difference to old PC. Booted faster, ran apps faster, etc. Now when you switch them out, you don't even notice the difference. I think this is hidden factor when people write about the "decline" of the PC, very much like POWER where you just don't buy them as often. And they get cheaper everytime also, although not to magnitude of these POWER servers.
anon9505178978
50%
50%
anon9505178978,
User Rank: Apprentice
7/18/2014 | 1:57:51 PM
Re: Power Servers last forever
They can setup lifetime support agreements that include equipment upgrades and replacements as new equipment and software become available. This way you don't have sales "spikes" with new products you have nice and smooth cash flow year after year with growth comming from new clients (with slightly more expensive contracts).
TerryB
50%
50%
TerryB,
User Rank: Ninja
7/18/2014 | 1:36:07 PM
Power Servers last forever
As a POWER system customer (i5 o/s in my case), I've made this comment before on articles like this: You only have to buy these things once every 5-8 years. In last 10 years or so, once they reached status where you don't grow out of the CPU and storage, I've moved to a six year replacement cycle. And if business is bad, I have no qualms about stretching another couple of years.

You can't kill these things with a stick, still by far the most stable, most productive business servers in the world. Mainframe capacity/performance that is so productive that many shops have one IT person who doubles as developer/admin, like I do here. And we aren't talking green screen apps anymore, I'm currently connecting Sencha Ext JS apps to the server.

The last point is that, unlike a loaf of bread, everytime I buy one of these it gets cheaper with 10 times the performance/storage of previous server. And I mean WAY cheaper. In 1999, (before they had integrated POWER line), our AS400 was $90K+. In 2004, it was $50K. In 2009, it was $20K. When I buy POWER8 next year, may be as cheap as $10K. How you going to see any revenue growth when that is going on?
D. Henschen
50%
50%
D. Henschen,
User Rank: Author
7/18/2014 | 9:54:59 AM
Other business shed and efforts to turn things around
The "Customer Care BPO" cited in the chart above as "excluded" is another low-margin business that IBM sold off. In IBM's troubled Power business, the company recently launched the Power8 line, which incorporates big data functionality, and it has open sourced the chip design and platform to a consortium of partners. The hope is to spread the cost and the popularity of this high-performance line which sits in between IBM System Z mainframes and commodity X86 systems.


IT's Reputation: What the Data Says
IT's Reputation: What the Data Says
InformationWeek's IT Perception Survey seeks to quantify how IT thinks it's doing versus how the business really views IT's performance in delivering services - and, more important, powering innovation. Our results suggest IT leaders should worry less about whether they're getting enough resources and more about the relationships they have with business unit peers.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest September 24, 2014
Start improving branch office support by tapping public and private cloud resources to boost performance, increase worker productivity, and cut costs.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.