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Henry Shine

Henry Shine
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  • IBM's Problems May Be Fatal [View article]
    @ User 447867: It might signal a problem if we only want SA to publish articles that re-affirm our investment decisions.

    While the article draws some conclusions, it comes to those conclusions largely on the basis of facts, like YOY sales revenue decline.
    Aug 21 04:22 PM | Likes Like |Link to Comment
  • Revenue Growth: What Has Happened To IBM's Sales Culture? [View article]
    I agree that IBM's proud history lies with the research and delivery talent, and products and salesmen of old.

    Today, IBM's cancer starts at the top. The required culture change means purging the top and valuing the average worker. Unfortunately, self serving human nature means this is unlikely.
    May 14 06:32 PM | 3 Likes Like |Link to Comment
  • Revenue Growth: What Has Happened To IBM's Sales Culture? [View article]
    Game Set and Match. You have nailed IBM's problems to a tee. The cat is now out of the bag.
    May 12 08:10 PM | 5 Likes Like |Link to Comment
  • 3 Reasons To Avoid IBM [View article]
    Dr J is entitled to wishful thinking. We all have biases based on how we are invested.

    While I take some note of the financials, charts and articles, I also take them with a grain of salt. These are often 'presented' using creative techniques and don't reflect the reality on the ground. I have seen this over many years from the inside, so I am not intimidated just because a distinguished educator can't see it.

    As indicated previously, the number one reason for me to avoid IBM is the massive brain drain that has occurred because of relentless cost-cutting values. People use to be IBM's greatest asset, but it is disposing of them like they are now its greatest liability.

    Customers use to pay a premium for IBM quality and service. That no longer exists. IBM must now compete on price, a battle it will lose because of its 2nd rate business structure. Case in point, If Lenovo can make a profit from PCs and servers, but IBM cannot, then that should scream operational and execution problems.
    Feb 3 11:44 PM | 3 Likes Like |Link to Comment
  • 3 Reasons To Avoid IBM [View article]
    Dr Jacques, Do you work at IBM? I too have followed the IBM's announcements including the development of Watson. While the announcement was greeted with fanfare, where is the substance of revenue growth that Watson will produce?

    Ginni will not be around in a decade to deliver on her $10B promise. Based on those in the know, she will be lucky to see out the year. At the end of the day, Ginni is just a figure head. The mass exodus (RA and voluntary) of talented staff is leaving IBM with employees who are not good enough to get jobs elsewhere. No matter how good IBM's strategy is in theory, IBM won't have the quality people to execute it. Unless of course, IBM plans to replace its sales staff with Watson too.
    Feb 3 04:39 PM | 5 Likes Like |Link to Comment
  • 3 Reasons To Avoid IBM [View article]
    To anyone who is positive about IBM's future, I challenge you to find someone who currently works at IBM who feels the same way. Those closest to IBM know that any future growth is a mirage. Soon the pretence will be gone and IBM's stock will fall below $150.
    Feb 3 03:20 PM | 6 Likes Like |Link to Comment
  • IBM reportedly considering sale of software-defined networking unit [View news story]
    Desparation. It seems IBM will consider selling anything so it can stay afloat until it reaches its 2015 destination.
    Jan 28 07:10 PM | Likes Like |Link to Comment
  • IBM - Revenues Continue To Slide As Stabilization Is Not In Sight Yet [View article]
    Last year, the rumored price Lenovo were discussing with IBM for the x86 business was between $2.5 and $4.5B. By waiting they picked it up for $2.3B. It seems the value of IBM's offerings is falling. Deflating prices does not bode well for increasing sales demand.
    Jan 23 06:40 PM | Likes Like |Link to Comment
  • IBM to sell low-end server unit to Lenovo for $2.3B [View news story]
    Selling the farm does not make you rich, it just means you starve in the long run.

    IBM's decline is accelerating.
    Jan 23 03:18 PM | Likes Like |Link to Comment
  • Dear Warren, About IBM... [View article]
    Meanwhile, over on hypothetical response to this letter, the IBM supporter commentators are in denial. They still think Warren made a great investment.

    The IBM numbers do not lie. Today IBM's stock is down 10% YTD - at $172 and still dropping. Smart investors do not buy to make a 10% loss each year.
    Dec 12 09:21 PM | Likes Like |Link to Comment
  • Warren Buffett's (Hypothetical) Answer To Arne Alsin's Letter On IBM [View article]
    @ David, Yes, time will tell if $177 is the bottom of IBM's current down cycle. In theory, IBM can make a strong case as to why WB and others should buy their stock. My short assessment is based on IBM's operational and workforce challenges. If you can't execute, then patents and technology are useless.
    Dec 3 10:50 PM | Likes Like |Link to Comment
  • Warren Buffett's (Hypothetical) Answer To Arne Alsin's Letter On IBM [View article]
    WB is not God. He does make mistakes. With IBM down over 7% YTD, I suspect this is one of them.
    Dec 2 09:50 PM | Likes Like |Link to Comment
  • Dear Warren, About IBM... [View article]
    It is interesting to read the confident comments from outside experts. As someone who spent 14 years on the inside and now has IBM as a client, let me assure you that all is not well inside Big Blue. IBM's unhealthy state goes beyond quarterly or annual stats, to a structural and values problem. IBM's matrix management eliminates the required nimbleness to operate efficiently. Its over-focus on cost control disempowers its 'greatest asset' ... its people.

    MATRIX MANAGEMENT
    Most IBMers do not even understand how IBM is structured. If IBM cannot easily articulate its operational structure, then there is no way it can bring itself together to sell. The gutting of power from IBM countries and the addition of the Growth Market and Mature Market layers have only made things worse. IMO, the IBM structure cannot be unscrambled and the solution may well be to break IBM up into several smaller companies. Ironic, given that this was the proposal just before Lou Gerstner came onboard.

    COST CONTROL
    As an employer of 400K+ employees, IBM's largest expense is its payroll. While it does need to address its workforce mix (which is heavily skewed towards the higher bands), it has gone the wrong way about it. Secret management practices are causing death by 1000 cuts to its workforce culture. IMO, IBM would be better off making a single workforce announcement (20% general workforce reduction and 40% management reduction) and then be done with it. At least then the survivors could get back to work with some level of certainty, rather than living in fear.
    Dec 1 01:08 AM | Likes Like |Link to Comment
  • IBM: A Disaster In The Making, Part 2 [View article]
    The underlying problem at IBM is its employee culture. We can analyze the numbers till the cows come home (and there is a place for that), but ultimately, it is people that make a company successful. It is people that sell, it is people that delivery quality, it is people that innovate and grow. IBM's last 6 quarters of declining revenue are the product of 10 years of IBM treating its people like 'machines' and 'resources' to be milked and discarded.

    If IBM is going to ever be a leading IT force again, it must once again start valuing its employees as its best asset.
    Oct 20 11:16 AM | 3 Likes Like |Link to Comment
  • IBM: The End Is Near [View article]
    Thank you for your insights Arne.

    What you describe is the 'point of elasticity'. In this modern and globalized world, companies can only grow their margins to a certain point until they become a vulnerable target. Call it 'So Big, they must Fail'. I believe IBM is at that 'snap point'.

    Even for enterprise consumers, purchasing IT is always a value proposition. Customers have a general idea of the size of their technology partner's profit margin. So when a large traditional IT vendor puts forward a bid with a 50% profit margin and a new player (let's call them Costco IT Services) puts forward a similar bid with 2% margin, the writing is on the wall. No wonder IBM's sales are flat-lining at best.

    For many people, this macro situation is scary because it represents 'change'. However, once we can abandon our loyalties to a single company, supplier or operating model, then we are free to see the situation objectively. At this point, change becomes a lot less scary. If IBM can adapt radically and quickly (and I mean within the next 12 months), then it may re-invent itself so it can survive into the next round. If not, then IBM will still have a stellar place in history.
    Jul 10 09:06 PM | 1 Like Like |Link to Comment
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