IBM Says its Future is in Services, Not Goods

TFGeditor writes "An article at Technology Review quotes IBM exec Paul Horn saying that the company's business model is shifting from goods and products to software and services. From the article: 'Horn's challenge, then, has been to take a $6 billion research organization dedicated to work that advances technology products and get it to do work that benefits service businesses. IBM is thus in the process of answering an important question for all technology companies: can corporations perform useful research in the services arena?'"

Comments

Nothing to see

[glassjaw rocks]

Appartently,

Slashdot just told me there's nothing to see here. Way to go on the services, slashdot!

Re:Nothing to see

[toddbu]

I got a "Service Unavailable" message. Doesn't bode well for their future.

Re:Nothing to see

[BKDotCom]

Don't they know this is an "on demand" world?
They need to add another "blade"!

Insipid commercials!

Re:Nothing to see

[glassjaw rocks]

How is this redundant when it was the first post? Idiot moderators.

Service Unavailable??

[mr_don't]

When I clicked on the link it said:

Service Unavailable

Re:Service Unavailable??

[Skyshadow]

Don't worry! IBM has a crack team of their consultants working on the web server issue right now.

If these guys are half as efficiant and technically adept as the ones they sent to my place of employment, I can assure you that the web server will be back online within six months for well under $15 million (costs may increase).

Seriously, in my experience the only thing your average IBM consultant is good at is eating lunch. And some of them even manage to deliver that late and over-budget.

Re:Service Unavailable??

[smittyoneeach]

saw your nick

Re:Service Unavailable??

[baldass_newbie]

And let's talk software and their records with OS/2, Lotus Notes, AmiPro, Lotus 1-2-3...gee, am I forgetting anything else?

IBM should take a look at what they're good. Selling software? No.
Killing software? Definitely.

Re:Service Unavailable??

[Profane MuthaFucka]

Well, obviously they didn't send the good ones to you. I'm an IBM consultant and I would have eaten YOUR lunch and charged you for it too.

Eating their own lunch? I am shocked, because there's no money in that.

Re:Service Unavailable??

[Jeremiah Cornelius]

They are changing the name to International Business Leeches

Re:Service Unavailable??

[ergo98]

Awesome post. Thanks for a laugh. I thought it was going one way, and then zing - a surprize ending.

Re:Service Unavailable??

[Profane MuthaFucka]

And, I really AM an IBM consultant too...

Re:Service Unavailable??

[Usquebaugh]

We still use Notes in a worldwide corporation that has over 25,000 seats.

We use ZOS, OS/400 & AIX and have done so for the last 10+ years, with no downtime caused by OS failure. In fact I can only remember one outgage caused by these servers, somebody ignored some disk pack erorrs when they should have called the engineer for a replacement. Needless to say said person was lucky to keep their job and was on probabtion for 6 months.

We use DB/2 and have never ever lost a record or had any downtime caused by DBMS failure.

We use MQSeries and have never ever lost a transaction or had down time caused by messaging software fail.

So prehaps you might wish to think a little larger when looking at IBM software. In fact it's hard to think of another company which provides such high quality enterprise software. The downside is cost measured in many many $$$$.

Re:Service Unavailable??

[clickster]

Dude,

What part of "future" don't you get?

Re:Service Unavailable??

[baldass_newbie]

I also work for a firm that uses Notes.
Having said that, they have killed their office suite, Notes is not gaining adopters. In fact, it's losing market share.
Notes migration path to newer technologies is horrendous.
DB2? Please.
You want to be an IBM fanboy, that's fine.
But they are not gaining/building market share. So while they charge plenty of $$$$, it's to cover for the seats they're losing.

Re:Service Unavailable??

[parryr]

You've got to be kidding. AIX has just managed to catch up to where Solaris was years ago. Notes has arguably the worst human interface of any piece of software in the known world.

Having said that, my experience/opinion of IBM here in New Zealand is: great hardware, shame about the support. The real failing is that they don't even come close to Sun in the arena of product support. Heck, even Microsoft give us better support.

And IBM is a strategic partner of ours.

Maybe that's why? Perhaps they think they've got us "in the bag?" Whatever, it's going to need more than some king dick cheese saying they're going to be a services company; they best pick up some human interfaces coders and some customer service trainers.

Re:Service Unavailable??

[LaCosaNostradamus]

Actually, Ignorant Business Morons (or Ignorant Business MBAs, which is the same thing) ... which is all you can say about anyone who thinks they can just dump hardware from their enterprise-support business model.

Obviously, IBM is still succumbing to the MBA/accountant/lawyer mode of thinking, where "the most profitable department of your business must become your ONLY department". The people doing this are like religious fanatics ... they have a single, holy goal in mind (e.g. maximum profits) and are not open to even massive evidence to the contrary (e.g. businesses who concentrate on one product line tend to either fail, or suffer the business cycle that governs that one product line).

If IBM continues down this path, it will lose much of its market share for enterprise "solutions". This is particularly true when IBM has a lot of competition in such an area of so-called expertise.

In short, everyone cannot just give up on hardware, and then sell software and bodies. The software and bodies must follow a hardware base. That hardware base may certainly be less profitable than the sw/body side of your business, but a hand needs an arm no matter how useless the arm seems in most tasks. We cannot all be hands.

Re:Service Unavailable??

[Jeremiah Cornelius]

I will miss the T-Series, or its successor, after Lenovo turns Thinkpads into Latitudes.

Did Carly get a new job with IBM?

[Anonymous Coward]

Looks like the marketing people are running the show

Necessity

[MyLongNickName]

As products mature, it becomes more and more difficult to diferentiate yourself from your competitors. That translates to lower profit margins. IBM is simply recognizing that. The question becomes, will their services fall into the same trap? Or can they continue to specialize and keep profit margins up.

Re:Necessity

[stcanard]

Also interesting, because it's a return to their roots.

Where did IBM make their big money from in their heydey? Service contracts.

Selling the big iron was never the profit, it was always about the service contracts afterward.

My experience in the defense industry was the same. It was no problem if you built the multi-million dollar systems at a loss, because the maintenance contract was where you made the money. I know of one UK product that finally turned a profit for our companies 10 years after delivery, then became quite a good money maker.

They're only half right

[CSMastermind]

They do have a valuable point but the reason services will be so big in the future is because right now they haven't truly been explored. Most natural service markets can't exist without a goods market to back them up so in this regard they're worng. There will still be a strong goods market, it just won't be as fast growing as the services market.

Re:They're only half right

[Master_T]

What I understand of it he may be right. As labor continues to move overseas due to cheap cost of operation there, we will need to fill gaps of employment. Economist have been theorizing for awhile now that America will become an almost completely service based economy. There are some who believe that we will be able to support ourselves on an economy of services. I do not know all the details of how that works, but the article seems to be pointing in that sort of direction. at least for IBM.

Sure I mean I think we will always farm and always need some production to trade against but otherwise, couldn't we even traffic in some services?

Re:They're only half right

[WaterBreath]

So then I guess the next question is what is a service? I hope it doesn't include things like call centers, because those are already being shipped overseas as well.

Farming, of course, we will always do. We have ridiculous amounts of land in America to use for it. The question there is whether we can make it profitable. Right now, it's about the most subsidized thing around, isn't it?

Re:They're only half right

[TykeClone]

Farming, of course, we will always do. We have ridiculous amounts of land in America to use for it. The question there is whether we can make it profitable. Right now, it's about the most subsidized thing around, isn't it?

If we have ridiculous amounts of land, Brazil has insane amounts of land available for farming. Where we get one crop/year, they get 2 or 3. As long as prime farm land goes for $3k/acre here, we will have a hard time competing against 3rd world countries where land sells for pennies an acre and regulations are either nonexistent or easily ignored.

What we need to do in farming is "de-commoditize" our products. This is what the oil industry has successfully done with gasoline - it used to be that gas was gas. Now, they need to produce something on the order of 30 or 40 different blends of gasoline for different areas of the country for different times of the year. They've successfully gone from a commodity product (gasoline) to specialty products (California-Summertime-NOETHANOL-superfuel) and the markets have taken care of rasing prices in response to smaller supplies.

As far as susidies go, farming is not any worse than any other industry - except that they get cash as opposed to help in other ways.

Re:They're only half right

[AaronGTurner]

With a sufficient level of physical infrastructure (goods) there are still a number of different value adds (services) that can be offered.

An example might be that your internet experience is dependent on goods (modem, computer) but is enhanced by the existence of services such as google (which is currently free).

In complex organisations the opportunity for services is greater.

In addition some of those things that have previously been considered to be goods will become services. Going back to the PC example above, I could either buy a PC and upgrade components over time, or buy a PC service which might specify that the PC I have in my house is able to provide some specified level of service (which may vary as hardware demands vary). I might specifiy "Play the latest games" at one price point, with the PC being upgraded or replaced every 6 months, or "Light internet browsing and word processing and you handle the software".

Looking at things from a GNU/Linux perspective this actually creates some interesting possibilities that can also tie nicely into technologies such as Grid and also recycling and regulations on disposal of electronic equipment (the light internet browsers might be happy with the machines the power users no longer want, which gives the hardware a longer shelf life and reduces hardware costs to the service provider).

Re:They're only half right

[dalutong]

i think the point is that the profit margin for good will be tiny. and if it is tiny, you have no money for R&D so you can differentiate yourself. services doesn't yet have that issue.

Re:They're only half right

[CSMastermind]

Farming in America is a perfectly competitive market, meaning that sale prices between firms naturally balance themselves out. To ensure added stability the US has many controls and regulations in place to mantain price levels. For the most part it's not worth it to ship food in from outside the US that can be grown at home and it's also not worth it for us to ship farm products elsewhere because anybody with the money to buy it doesn't need it. That's why millions of pounds of food is destroyed each year by the US when there are people starving across the world. It's not because we don't have to food to feed them, it's because it would cost too much to feed them.

Re:They're only half right

[CSMastermind]

From my econ textbook: "Service- An activity that results in a benifit to the buyer but does not result in a material good being exchanged."

Yes a call center would provide a service. So would education, entertainment, construction/repair, and certain IT/Programming jobs.

Re:They're only half right

[Anonymous Coward]

What about the millions starving here?

Re:They're only half right

[CSMastermind]

Same thing, not profitable to feed them so forget about them. Not to sound cold hearted (I do disagree with some policies we have about homeless/downtodden people) but if we gave away too much food, it could also result in lack of people buying food because they would know they could recive it for free.

Re:They're only half right

[CSMastermind]

Sure services do. I'm not sure what industry you work in so I'll use a generic computer example. And ISP provides a service. I'm sure you can remember when there were tons of 56k ISPs all in the same market. The profit margin in that industry did get very tiny and many of them went out of business because they didn't have the money to develop technology that would differentiate themselves. Diamonds on the other hand, are controled by a single company, and their profit margin is huge. The difference between good and service is only that one is a tanglable thing that is exchanged.

Re:They're only half right

[stormlead]

What I've heard from management and IT consultants is that, for the most part, IBM's services division (especially their IT consulting) is basically seen as a way for them to sell their enterprise-grade hardware- this is why all the PriceWaterhouseCooper consulting folks were so unhappy when they got bought out by Big Blue. IBM still has its feet on the ground (in goods)- they've been talking about services for a while, and only really put their money where their mouth was with the Lenovo deal.

Re:They're only half right

[TykeClone]

Farming in America is a perfectly competitive market, meaning that sale prices between firms naturally balance themselves out.

Which is why I said that if the farmers were able to decommoditize their produce, they would segment the market (and make it less perfectly competitive) and be able to command more pricing power.

We also send lots of food overseas to those areas where people are starving. Part of the problem isn't getting the food (or other aid) to the areas - it's actually getting the food (or other aid) past the corrupt locals and into the hands of those who need it.

Re:They're only half right

[Mad Alchemist]

The obstacle here is that the farmers don't control the consumer end of the market like the oil companies do (through their branded gas stations). They have to settle for whatever price the grain elevators and the huge food manufacturers are offering.

The market is somewhat fragmented on the farmer's end -- the price is docked for lower protein in the wheat, high moisture levels, and such. Think any of that makes a difference once they make it into Chocolate Frosted Sugar Bombs? Not a bit. (Well, maybe the moisture does, but certainly not the protein.) Food manufacturers have an interest in not fragmenting the market on the consumers' end, for exactly the reasons you mentioned. And there's not much the farmers can do about it.

At least, that's my understanding. But I'm not an economist.

Re:They're only half right

[TykeClone]

I suspect that GMO crops will turn out to be the answer. You'll see corn specifically engineered to produce more sugars for ethanol production. I've seen articles about modifying corn or other crops to inexpensively produce precursors for drugs.

I don't think it will take too much of that kind of segmentation to reduce the size of the garden variety commodity enough to move the price of that commodity.

Re:They're only half right

[LaCosaNostradamus]

The only "completely service based economy" is a bankrupt one. You can't run a society off of web pages, junk bonds and strip malls. You have to have the real basis of sustainable wealth: the manufacture of capital equipment.

This "service based economy" thing is a myth. It only betrays a deep ignorance of economics.

differences?

[grumpyman]

I feel that in IT, in most cases, services are the goods.

Re:differences?

[JeanBaptiste]

"I feel that in IT, in most cases, services are the goods."

well certainly with software development, which is what i do, it ends up being both a service and a good at the same time.

Customer has a problem, I write software to fix it == service.

Other customers have similar problem, the software is already written == goods.

I update the software, modify it for other uses == service.

Updated software solves other people's problems == goods.

So its really kind of blurry if what I'm doing is service or manufacturing, more often than not it ends up being a little of both at the same time...

Re:differences?

[Anonymous Coward]

Uh, updating software is a service, never a good. It's not a commodity than anyone ever really touches, even if they're buying a box.

Re:differences?

[Anonymous Coward]

Goods are bads and it's bads to be goods.

Re:differences?

[dfn5]

I feel that in IT, in most cases, services are the goods.

Without goods, the services have no where to run.

Re:differences?

[grumpyman]

I understand what you guys are saying, but what I mean is, for most IT related businesses, profit always comes from goods developed with a lot of intellectual properties. For example, the 'goods' part of a distributed filesystem, is quite different from a burger or a pop. Something that we can't cook it, wrap it and sell it.

What about this question?

[slapout]

Who's going to do R&D and develop new products? Seems like everyone is getting out of the development business and going into the patent holding/suing one.

Re:What about this question?

[C. Mattix]

From IBM's standpoint they are getting R&D for free from the open source community. That is where much of the new products are getting produced.

Re:What about this question?

[MrAnnoyanceToYou]

Companies building OS solutions for consortiums. Linus is smart, and has a good business model that will work for a while.

Re:What about this question?

[stubear]

IBM is getting development from the open source community but I really don't see much research happening. I'm guessing IBM would have to provide that half of the equation.

Re:What about this question?

[Anonymous Coward]

http://slashdot.org/comments.pl?sid=145571&cid=121 99660

Thought that was pertinent, and so very true.

Re:What about this question?

[ergo98]

Umm...thanks. It was a ranting leaf comment that evaded the karma retribution crew. Now you've gone and highlighted it.

Re:What about this question?

[beowulf2003]

Yes and all the folks IBM is paying work on the Linux Kernel (or gcc or eclipse) are all being paid by whom ?

Re:What about this question?

[Anonymous Coward]

>> Who's going to do R&D and develop new products?
See the March 21, 2005 Business Week cover story

Re:What about this question?

[Anonymous Coward]

RTFA. They are developing new products. It's service based products. They aren't cutting back on research. They are redirecting their research dollars into other endeavors.

Re:What about this question?

[C. Mattix]

I'm not saying that they are not supporting some projects, but those are mature, existing, and mission critical ones. For new and cutting edge stuff, I see them "absorbing" may more OSS projects.

Not too surprising

[HMA2000]

Unless IBM wants to focus on competing with the ever growing chinense and other low cost manufactures they have no choice but to get out of hardware. Hardware is becoming increasingly commoditized and that means it will become a very difficult business to carve out a living in.

Not to mention IBM has some incredible hardware and software people on staff that would be far better employed helping those with problems in a consulting role.

Re:Not too surprising

[LWATCDR]

" Unless IBM wants to focus on competing with the ever growing chinense and other low cost manufactures they have no choice but to get out of hardware."
That is only the Intel/AMD market. How much value added can you do with the Intel/AMD platform? They all have sound. They all have IDE and now SATA. They all have USB. You may be snazzy and add Firewire. Now in the PowerPC market IBM can add value. Look at the Cell, G5, and Power series. IBM simply does not want to be a me too company selling cheap PCs anymore.

Re:Not too surprising

[LordNimon]

So what kind of consultation would you expect from a chip designer? I really can't imagine any of the hardware people providing any meaningful consulting services, except to other hardware people.

Re:Not too surprising

[HMA2000]

Just your basic big brain, deep specific knowledge type that the front line consultants rely upon.

Re:Not too surprising

[TFGeditor]

..."IBM has some incredible hardware and software people on staff..."

One of them is mentioned in the article--Rob Barrett. He's my son-in-law.

Re:Not too surprising

[fbg111]

Not to mention IBM has some incredible hardware and software people on staff that would be far better employed helping those with problems in a consulting role.

Keep wishing. Researchers of that calibur rarely want to work as business/IT consultants, and if IBM tries to assign them to such a role, they'll go elsewhere.

Re:Not too surprising

[Anonymous Coward]

Unless IBM wants to focus on competing with the ever growing chinense and other low cost manufactures they have no choice but to get out of hardware.

They already did

New news?

[op12]

Is this really new information? Those IBM ads for their consulting services have been on for a long time now, and the more recent commercials even tout these services as the new (side of) IBM.

Re:New news?

[op12]

I was off by a bit. They're calling it the other IBM, not new.

Re:New news?

[Michalson]

Mod parent up. IBM has always been a service company. The hardware and software they sell is/was nothing but a vehicle for expensive long term service contracts. While they made a profit on that server they sold you, the real bread and butter was that extended warrenty they convinced you to add on. It's the main reason IBM never liked the home PC market, you just couldn't take customers out to play a round of golf while getting them to sign up for a bunch of service plans. Instead customers bought the hardware and went home, and those that actually used IBM's support expected to get it for free (the utter irony being that because their PC project was literally put down in the basement it resulted in an off the shelf design anyone could copy, leading the "IBM PC" to become the industry leader).

Re:New news?

[davids-world.com]

AFAIK the days when IBM supplied hardware (or software) doing B2C are long gone. They have focused on business-to-business for many years now. And secondly, if someone says that "the future is in service" (future = IBM's future), then that's anti-news. I remember reading Lou Gerstner's book about IBM's turn-around (I think the title was "Who says Elephants can't dance?") and hey, service is what this is all about. But that's a transition that IBM made, heck, more than a decade ago if I remember correctly, even though I admit the transition of their research labs comes surprisingly late.

Nowadays, IBM is doing excellent research and I would doubt they can turn researchers into business consultants or business "researchers" (whatever that is).

The rest of the company are already business / IT consultants, and I assume they implement solutions (as opposed to specific software or hardware). I understand they have a revived chip business (Power4 ... ) and also sell servers, but again it's no news that this is not their core business.

Is that why they outsourced R and D to China?

[WillAffleckUW]

Guess they're serious.

Re:Is that why they outsourced R and D to China?

[Foolomon]

Link please.

The Research Labs in Yorktown Heights, NY; Zurich; Haifa; and San Jose are still thriving albeit under a different operating model than they were in 1990 when I was an employee at the lab in NY.

Opening a new lab in China != outsourcing R&D

Re:Is that why they outsourced R and D to China?

[Cletus the yokel]

Wow news to me here in T.O! We're bursting at the seams here...

They're just announcing this?

[Jeff Hornby]

Hasn't IBM been earning more than half its revenues from services for over a decade? And they're just getting around to announcing it now?

More news: Microsoft has announced they're going to be a software company. GM is showing some interest in making cars. Walmart is going to start selling stuff.

Re:They're just announcing this?

[norwoodites]

I was just thinking the same as IBM does not make its money from selling computers or even selling compilers but the support contracts that come with them.

Re:They're just announcing this?

[Skyshadow]

Actually, they sent out the annoucement a couple of years ago. It just happened to make its way out of the Lotus Notes server today...

Re:They're just announcing this?

[CoderBob]

Man, we use a Lotus Domino server for internal stuff. If only you knew how slow that beast was...

Re:They're just announcing this?

[Anonymous Coward]

Hasn't IBM been earning more than half its revenues from services for over a decade? And they're just getting around to announcing it now?

It's not IBM's fault that slashdot posts decades old dupes.

Re:They're just announcing this?

[Urban Garlic]

> GM is showing some interest in making cars.

It's true that they make lots of cars, but that's not where their money is. GM's automotive division actually loses money, and did so even before the current troubles. GM's profitable division is the GMAC financing arm. Operationally speaking, GM is actually a bank.

Re:They're just announcing this?

[Anonymous Coward]

truer words have never been spoken. I worked for IBM about 4yrs ago, this was their plan then. The services they sell are based on their own products and now include open source as well.

Re:They're just announcing this?

[TykeClone]

GM's profitable division is the GMAC financing arm. Operationally speaking, GM is actually a bank.

A few years ago, I heard it was the other way around (and that if GMAC was a bank and regulated like a bank, it would be in a world of hurt).

To see this, just think back about a year or two ago about the 0% financing available. The GMAC arm lost money on every sale, but presumably made it up on volume.

Services will be big

[tech-hawger]

IBM is just trying to be ahead of the curve. While I'm confident they will be able to maintain relevance, it'll be interesting to see how they proceed from here.

Yeah, right

[Capt'n Hector]

With billions invested in chip fabrication, they're not going to be abandoning that business anytime soon. With their name recognition in other hardware sectors, they're not going to abandon those markets anytime soon. Maybe I'm out of the loop, but when someone says "software," is IBM one of the first things you think of? I could imagine EXPANDING into software and services alongside hardware, but then we're back in the 90s selling "solutions".

Re:Yeah, right

[SydShamino]

>> when someone says "software," is IBM one of the first things you think of?

When someone says "IBM software", I pause, look at my email client on the other monitor (Lotus Notes), and begin to cry...

Re:Yeah, right

[Soko]

You could be right.

They could also "spin off" the hardware business into it's own entity, or sell it outright to an appropriate firm. That way there's two companies fighting different battles, with no chance of one dragging down the other.

Remember a companies executive branch has one mission: Increase shareholder value , not re-live the glory days.

Soko

Re:Yeah, right

[Anonymous Coward]

Chip Fab research actually fits this business model quite well.

IBM can and does have a lucrative business consulting with the likes of AMD and TSMC who manufacture more chips than IBM does.

The R&D is valuable - but rather than become a large-scale manufacturer themselves, they can make more money consulting to others who want that role.

Re:Yeah, right

[Anonymous Coward]

Remember a companies executive branch has one mission: Increase shareholder value , not re-live the glory days.

Not true. The mission is to represent the interests of the shareholders. In many cases, the shareholders have other interests than just value - i.e. supporting humane working conditions, supporting fair trade, etc.

Re:Yeah, right

[cpeterso]

They could also "spin off" the hardware business into it's own entity, or sell it outright to an appropriate firm.

You mean like the sale of IBM's PC division to Lenovo of China?

Re:Yeah, right

[AaronGTurner]

The software of interest isn't going to be comparatively low value items such as that, but more in things like business process engineering, grid, data mining, etc. Thus stuff that keeps governments and large businesses working.

Re:Yeah, right

[powerlinekid]

IBM is actually the largest software developer in the world. Difference is that its mostly internal stuff (damn near everything here is IBM made).

Re:Yeah, right

[Anonymous Coward]

I think you mispelt Microsoft.

Re:Yeah, right

[Bishop]

Microsoft reported a revenue of $37 billion ($37e9) for 2004. IBM reported a revenue of $96 billion. Of that $15b is directly from the software division, and $46b is from the global services division. MS may think they own the market, but IBM knows where the real money is.

Technology "review" is right...

[Skyshadow]

IBM has been pursuing this for a couple of years now. I mean sure, their consultants pushed their own technology, but they were always willing to push it to the side in a heartbeat if they thought it would get them a single penny more. The fact that this is news in 2005 is a little bizarre.

Of course, if IBM has decided to full-on push their consultants, it might help them to find a few who aren't complete morons. Based on my experience, IBM is well on their way to becoming the new Anderson.

Re:Technology "review" is right...

[traabil]

Based on my experience, IBM is well on their way to becoming the new Anderson.

What are you saying here? Are you implying that the 70.000-something employees of the Andersen (sp!) worldwide practise not involved with Enron, WorldComm, and Waste Management were morons with no moral standard?

Oh, please. All baskets can have a few bad eggs, Andersen's problem was that many of the bad eggs were gathered at a few clients.

Don't RTFA... Spyware...

[profet]

Gotta love the spyware contained in the article.

Avenue, A Inc. Whatever that is.

Re:Don't RTFA... Spyware...

[Anonymous Coward]

Actually I tried the article in both Firefox and IE just to see what your talking about and I didn't get athing from either one. As long as your IE is up to date and you have the MSN toolbar it should get blocked. Of course Fire Fox as always is unaffected. So if your system was up to date the spyware gets filtered out or blocked.

Re:Don't RTFA... Spyware...

[slackmaster2000]

It's a cookie.

Re:Don't RTFA... Spyware...

[kawika]

If you don't know what Avenue A is, how do you know it's spyware? Perhaps you are mistaking a cookie for spyware?

Re:Don't RTFA... Spyware...

[punkass]

nooooooooooooooooooooooooooooooo.... Oh yeah, I don't care about that shit...

Bill Gates...

[Jinsaku]

..only beat IBM to this decision by about 25 years.

Re:Bill Gates...

[Foolomon]

LOL...Link please. This is incorrect.

Just because IBM's presence in the services market took center stage with it's acquisition of PwC doesn't mean that IGS wasn't quite a force to be reckoned with in the 90's.

Re:Bill Gates...

[Diag]

Microsoft only know of the word "service" if it precedes the word "pack".

Google!

[xiphoris]

Google has been conducting its research extensively in the services area. Google labs contains a plethora of useful services Google's researching, with new ones coming almost every month. A few ones that interested me: Google sets allows users to enter a few items (apple, banana, orange) and Google will find more from that set (pear, kiwi). Google ride finder allows you to find taxis and limousines by tracking their positions in realtime. All of these services are available to the public so Google can get feedback on their "research".

International Business MACHINES

[DesScorp]

IBM is fast becoming a company that doesn't actually make anything, and this pretty much confirms that. And that's pretty sad, being that this company pretty much invented computing for the the business sector, and brought personal computing to the general public.

They're making lots of cash right now, but one day, perhaps sooner than they think, this approach is going to come back and bite them in the ass. And then there might not be an IBM.

Re:International Business MACHINES

[noisymime]

out of interest how exactly is this going to bite them in the ass?
When a company sets their IT infrastructure they buy x amount of servers. And then the income for IBM stops.
If a company requires 24x7 service then they sign a contract and keep paying IBM continually for years...

Re:International Business MACHINES

[affinity]

They are placing application stacks that no other company can put together on the Enterprise side (server/mainframes, OS, applications, install, multi-year support, TCO over time). They are also providing services to companies such as Sony/toshiba "cell processor", Microsoft "XB2 CPU" it's a service to develop and a product to sell. They are farming out via services their other products as well as their most valuable assest "researchers".
Most basic computing hardware is now a commodity, that Gerstner had realized, and started IBM on a path of Services which Palmisano is continuing.

Re:International Business MACHINES

[Anonymous Coward]

Their FABs and semiconductor knowhow got them the console contracts, and both require huge amounts of R&D and investments to maintain. As well as a healthy line of their own high performance hardware.

Re:International Business MACHINES

[nacturation]

And, in other news, the 3M (Minnesota Mining and Manufacturing) Corporation announces that it doesn't really do much mining these days either.

Re:International Business MACHINES

[dj_whitebread]

Except for the Power processors and those mainframes that make so much of the companies money. Not to mention the cell processors...

I think "doesn't actually make anything" is a bit strong.

Re:International Business MACHINES

[Anonymous Coward]

When I left IBM in 2003, this was EXACTLY what I saw in the Software Group. The last department I was in killed all of their "real" product work, then turned their focus to patent applications. I looked them up on the USPTO site the other day, and saw something like 80 patent applications in 2004/5, from the 10 people in my department.

At first I thought the shift to patent applications instead of real products was simply an artifact of job security (ie your product will almost surely fail, making you vulnerable for the next round of cuts... but if you can put in enough patent applications you can claim value to the company and just maybe survive another year.) Now, I just think nobody has anything better to do. The beaurocracy that formerly produced mounds of paperwork for dead products simply produces mounds of paperwork for patent applications instead.

(Posting as AC because, while I fear very little in life, I do fear the IBM legal team :-))

Slashdot-"New Business Model"

[Anonymous Coward]

"can corporations perform useful research in the services arena?'""

How to more efficiently do services over a remote connection.

The services sweet spot...

[ScentCone]

seems to be all about helping out your customers with every little thing they might need, while perhaps stopping just short of giving their passwords to the wrong people. There seem to be plenty of areas that merit more services research, if big companies can't seem to get past stuff like that. Or maybe IBM could just get into offering online courses in Remedial Critical Thinking for help desk staff.

Patents

[zoward]

IBM makes a boatload of cash off the patents that research generates. Selling/renting out their patents is a service - isn't it?

Word Of Advice for IBM Directors

[jac1962]

THINK

Hmm.

[Poromenos1]

Is the market really shifting, or are companies trying to shift it themselves because the software market is more saturated than it used to? Half-life 2 comes to mind, which is a good marketed as a service... Btw, this is not a troll.

A reaction to Jack Welch leaving GE?

[The-Perl-CD-Bookshel]

I think that this is a good move by IBM because after Jack Welch left GE there are some doubts about GE as a consulting firm. IBM could jump in and push technology (to help processes and quality) over restructuring and quality focus seminars as the panacea for a company's problems.

Also, if anyone watched the Masters golf tournament they saw at least 10 commercials for IBMs consulting services. After seeing them buy up all of that expensive advertising time the conclusion is simple: IBM believes that services are the future and they are getting a jump on the competiton with advertising dollars, marketing generalizations and dare I say "slashvertising."

Re:A reaction to Jack Welch leaving GE?

[Anonymous Coward]

I was impressed by all the ads they bought on the Masters but I felt the quality and the message were just absolutely terrible.

Re:A reaction to Jack Welch leaving GE?

[The-Perl-CD-Bookshel]

The one with the guy(consultant) that tossed the bag of money on the table was decent. "Are you suggesting that we throw money at it?" *nods*

IBM Global Services

[Anonymous Coward]

I recall been told some years back (around 2000 give or take) that for a long time IBM Global Services was the only division that was profitable on a consistent basis. Even back then the writing was on the wall for the PC group (which had not shown *ANY* profit for years before, and up till its sale was still unprofitable.)

Re:IBM Global Services

[SirDrinksAlot]

This is true. I work in IGS and its only getting more and more profitable.

The sad thing is IGS management is getting greedy tightening the belt so much they are squeezing the life out of what used to be an exellent envirornment to work in. Now its all about making everyone doing twice the work in half the time. They dont realize that yes they are saving X ammount of money but theres penalties that if even one group was hit with could turn that gain into total loss.

Its complete greed and they dont give a shit about their employees anymore. Once when I started with them (I call the golden age) we were making money hand over fist, everybody was happy and we were making our goals with room to spare. Now we're barely making our goals and everybody is hates IBM. *EVERYBODY*

Re:IBM Global Services

[Anonymous Coward]

That is a damn shame;
I hired in to IBM global services and did not care for it, partly for personal reasons, and partly because I had experience elsewhere and found that I would not fit in with the thirty other people and their existing culture. I have been really hard on myself that I let it go, as it was good money in a nice place, just not for me. I hope you find someplace that suits you better.

But, to hear that it has also become such a place eases the pain in that my instincts may have been right; the choke chain would be pulled at some point in time, I just didn't know when and how much, but I assured myself it would come because the way the management treated their people. The only other place I sensed that was at Sun by a newbie boss.

Re:IBM Global Services

[sig226]

Not quite, the software division has always been quite profitable.

They should follow GM ;)

[TheNarrator]

GM learned long ago that making physical stuff is a pain in the rear because of unions and pension obligations and became a mortgage lenders (GMAC) that makes cars as a hobby.

http://www.financialsense.com/editorials/reality/2 004/november.html

GM's total revenues were $185.5 billion with a corresponding net income of $3.8 billion. However, only $1 billion of this net income came from automotive sales. The $2.8 billion balance came from financing and insurance operations (including mortgage lending). In other words, only 26.3% of General Motors' net income came from automotive sales. Clearly, GM has become a financial services company (that happens to also manufacture automobiles) and its future success is directly linked to its ability to compete in the financial services industry. After all, America now has a finance/debt-based economy.

Re:They should follow GM ;)

[hitchhikerjim]

Sure -- but I bet most of that GMAC income came from auto loans, auto insurance, and related loans that tacked onto existing auto loan customers (sell them a car loan, then hit them up for a refi on thier house). So the car was a very important loss-leader. Without the car, they'd have to compete to get your loan with everyone else, and probably wouldn't win.

Same goes for IBM. Sure their services division is making lots of money. But it's mostly making money by sending consultants out to custmers who are buying their hardware. If they eliminated the hardware and software part, they'd have a much tougher time selling people on their services.

Re:They should follow GM ;)

[Anonymous Coward]

If GM didn't build the cars, then why would anybody finance with GMAC? The cars are the reasons that the loans get made. Very clever people there. And they don't post on Slashdot. Interesting, no?

Re:They should follow GM ;)

[Some Pig!]

Just in case doesn't get the joke behind that ";)" in the thread title, GM bonds are about to be downgraded to junk.

http://www.forbes.com/forbes/2005/0425/112.html

IBM?

[MrVictor]

It seems that they should consider changing their name to IBSS - International Business Software Services

Re:IBM?

[C_Kode]

It seems that they should consider changing their name to IBSS - International Business Software Services

I've already trademarked, copyrighted, and registered the domain so shutup!

Re:IBM?

[WhiZa]

I BS would be a good name for a service company

Linux's entry into the mid-market

[G4from128k]

As much as U.S. IT folks hate outsourcing (actually it's offshoring that they dislike), it is a way for Linux to penetrate those mid-sized business that don't have the IT to handle OSS themselves. If a mid-sized company outsources customer care, finance & accounting, HR, etc. , then they don't care about the "source" of the underlying software at the provider as long as the service provider does a good job at a decent price. I would suspect that some outsourcing service providers -- IBM certainly -- leverage Linux for its low-cost per seat and economies once you have the scale to support it. The rapidly growing outsourcing providers also offer a greenfield opportunity for Linux -- if you are starting an outsourcing company from scratch then you have the opportunity to pick whichever OS works best without as much an issue of retraining and entrenched workforce.

Once Linux builds up a competent portfolio of business software (some outsourcing service providers also sell their software), that software will attract non-outsourcing businesses to Linux

Services over Goods?

[IWantMoreSpamPlease]

Services: Prostitutes
Goods: Money.

So Services not Goods, equals.....what? Free prostitutes?

(note, this is humor, I happen to disagree with IBM's assessment)

Re:Services over Goods?

[marcushnk]

no "goods" would be a Thia sex slave chained to the end of your bed.

This is Very old news

[PacketScan]

They decide they would gear their business to services years ago.. Why is this such a shock now? Maybe it's even more relevent after the sales of computer devision

International Business Knowledge.

[Anonymous Coward]

"IBM is fast becoming a company that doesn't actually make anything, and this pretty much confirms that."

Welcome to Alan Toffler's "Idea Economy". Forseen over twenty years ago. The only problem is that the nature of the "commodity" means that people respect "Knowledge"* and the products of knowledge (IP)*1 even less than they do physical goods.

*See previous "/." stories on universities, and the glorification of not knowing the subject matter.

*1 See stories on copyright and patents, let alone trade secrets (Apple).

Lets hope they learned something

[Anonymous Coward]

20 odd years ago they claimed that the money wasent in the software, it was in the machines...

70 odd years ago their CEO belived that the world market is about 5 machines...

hm...

Re:Lets hope they learned something

[Anonymous Coward]

Wow, so you failed history on top of everyting else, eh? That explains why you're at Slashdot. Can't read, write, calculate, reason, or remember. Perfect candidate for a regular poster. Get back to study hall before you get a demerit, tadpole fucktard.

Re:Lets hope they learned something

[Anonymous Coward]

If you're capable of showing exactly how and in what way this person is wrong, feel free to do so. If all you're capable of doing is venting your spleen and calling names, then STFU and sit down.

Spyware? Where?

[Anonymous Coward]

Gotta love the spyware contained in the article. Avenue, A Inc. Whatever that is.

Nothing for me, using Firefox 1.0.2. Then again, I'm also using AdBlock and FlashBlock, so maybe they're filtering out the bad stuff.

Go Firefox, go.

Predictions begin to come true

[Spy der Mann]

With software becoming open source, it can't be delivered as a product anymore because anyone can get it. However, customized software, and/or software maintenance is starting to become a necessity in the software world.

Companies stop selling software, and begin selling their services (even if this involves DEVELOPING software).

But it's not much different... if companies don't charge by selling their software product, they'll charge for the time spent writing it. (Of course, nobody says you cann't charge for a service you already did for another company :P)

Anyway I like this corporate change of IBM. First they ask for a reform on the patent system, and now they switch to services :)

Who's going to make the goods

[Masq666]

I rememer earlier this week reading that Dell was going to focus more on services in the future and now IBM does the same. Then who's left to make the goods?

Re:Who's going to make the goods

[Anonymous Coward]

brown people.

Re:Who's going to make the goods

[Creepy Crawler]

The far East, of course. And add that to other third world nations with no guaranteed anything.

Re:Who's going to make the goods

[Masq666]

That was what i feared, china and taiwan making all the goods, and if they make all the goods then they also controll the market.

IBM also points out:

[Anonymous Coward]

Bears generally shit in the woods
The pope is widely believed to be Catholic

I.B.S.?

[btarval]

So does that mean they are going to change their name to International Business Services? Somehow, I don't think the name of "I.B.S." is going to sell too well.

I can just see the slogan now:

"I.B.S. You B.S.. We all B.S. for I.B.S."

Hmmm.

Re:I.B.S.?

[datadriven]

Isn't that "Irritable Bowel Syndrome"?

Re:I.B.S.?

[Anonymous Coward]

Isn't that "Irritable Bowel Syndrome"?

What's the difference?

Everything Real and Tangible will be in Asia

[mslinux]

One day, America will be a big 'service economy' where we:

a) Produce Nothing.

b) Consume Everything.

c) Print lots and lots of worthless dollar bills.

Re:Everything Real and Tangible will be in Asia

[carpe_noctem]

So it will be a society made up entirely of bloggers? That IS frightening!

Re:Everything Real and Tangible will be in Asia

[Anonymous Coward]

One day?

Re:Everything Real and Tangible will be in Asia

[TomorrowPlusX]

You forgot one:

d) Cheap, uneducated 3rd world labor force.

Re:Everything Real and Tangible will be in Asia

[razmaspaz]

a) Produce Nothing.

If we could only get rid of farm subsidies we would be doing this already.

b) Consume Everything.

Except the services we sell to all the other countries who have no clue how to efficiently produce their goods., build their power plants, feed their ever growing populations, and cure their sick. We currently have the best university system available (with the exception of possibly England - but theirs is not as widely avaliable) and that translates into the best educated country in the world. Which translates into valuable services. And I would much rather live in a country full of doctors and biologists and engineers than a country of assembly line workers and farmers. The aforementioned jobs all translate to a higher quality of life.

c) Print lots and lots of worthless dollar bills.

Is a dollar bill worth anything right now anyway? It is just good faith and the accepted exchangable value.

Re:Everything Real and Tangible will be in Asia

[Anonymous Coward]

Hey now, reason and facts have no place here, please relocate to a different message board so we can continue discussing the impending doom of America from our rich parent's basements! How will we ever survive when all we know how to do is run financial markets and make medicine?!? Where will the money come from???

Re:Everything Real and Tangible will be in Asia

[alexborges]

And I would much rather live in a country full of doctors and biologists and engineers than a country of assembly line workers and farmers. The aforementioned jobs all translate to a higher quality of life.

Mhm.... doctors, biologists and engineers...oh, you mean intelligent people?

America cant be that...Im sorry, the US population proved their incredible naivite and plain low IQ level when they chose GWB as their president... TWICE...

For christ's sake... TWICE!

I mean... i think it says it all really...

Re:Everything Real and Tangible will be in Asia

[Wudbaer]

Regarding b): I think you are overly optimistic regarding the uniqueness of the US and its abilities. Just recently I read an article about the huge problems European companies are having in China: They want to do business there because it's obviously a huge market, but their Chinese "partners" almost immediately copy all the sophisticated machines they sell there to the last screw and start churning them out themselves - at adequate quality and with service and all, but much much cheaper the dump European could ever dream of building them. And this are really complex high-tech manufacturing machines, not cheap TV sets or sewing machines.

Another example of how fast a country can lose its edge is the rise of Japan: At first the US and Europe laughed at them: "Haha, look at those dumb Japanese imitating our shitty cheap TV sets. Ha ! Now they try to do photo cameras ! Cars ! What a laug- Um. HEY ! Where is our automobile industry ? Where are the high-end manufacturers of optical gear ? What about VCRs ?"

Never underestimate an adversary. And having a country full of doctors and biologists is fine. Look at Russia to get an idea what happens if you have a society where excellent academians are a dime a dozens because there is a lot of knowledge but no adequate work.

Re:Everything Real and Tangible will be in Asia

[Melkman]

Sorry, but the USA is not number one in education but numer 14, see http://www.nationmaster.com/graph-T/edu_sch_lif_ex p_tot

Re:Everything Real and Tangible will be in Asia

[Anonymous Coward]

"We currently have the best university system available (with the exception of possibly England - but theirs is not as widely avaliable)"

A point of information on this. The UK university system is much cheaper at the point of delivery than in the USA, but has fewer places available per capita and still tends to be taken up by the middle class more than the working class.

Neither the UK nor the USA university systems are in the top two AFAIK.

Re:Everything Real and Tangible will be in Asia

[Keeper]

Well, the doctors, biologists, and engineers all need people to flip burgers, mow their laws, and pick up the trash ...

(barely more than 50% of the people in this country voted for GWB; hell, less than 50% voted for him the first go around ...)

Re:Everything Real and Tangible will be in Asia

[John Newman]

Cool web site. I'll see your statistic and raise you a more relevant one: rate of enrollment in tertiary education.

I think there's a general consensus that American higher education (undergraduate, postgraduate, and professional) is still the class of the world. Both its quality and its accessibility to outsiders play a role. When American, European, Asian, and African students all start flooding into the burgeoning universities of India, China, France, or wherever else, that consensus will change. But the global brain drain is still real, and unidirectional.

Re:Everything Real and Tangible will be in Asia

[fbg111]

Except the services we sell to all the other countries who have no clue how to efficiently produce their goods., build their power plants, feed their ever growing populations, and cure their sick.

And once they learn how to do all that stuff, what will they need us for? Or do you think they'll never catch up?

We currently have the best university system available

That depends on government funding for research, funding which is being cut across the board left and right these days. DARPA, NSF, etc, are all cutting funding, especially for pure university-based research which is the most crucial in maintaining America's long-term technological leadership, academic quality, and even tax base that is required for additional funding. Without pure research, technological advancement and the steady stream of neato gadgets we take for granted will dry up.

and that translates into the best educated country in the world.

Sure, that's why American students are always at the top of every published academic ranking and consistently win international contests. I won't bother to link to the recent /. stories on this.

Which translates into valuable services.

An economy can't survive on services alone. There is only one way of creating wealth, and that is by taking raw materials and applying work and ingenuity to turn them into something worth more than the sum of their parts. We used to do take wood and iron and turn it into ships and trains; now we take sand, aluminum, and copper and turn it into microchips. Voila, wealth is created. At best services allow you to ween a little more value out of the products you've created, especially if you see custom software (eg IT consulting) as an enabler of hardware, or something that helps you get more value out of your hardware. At worst, services are simply a wealth transfer, with no additional wealth created at all.

Don't buy into the malarky that America can prosper as we have without actually making anything. As funding is diverted from pure research to military expeditions and whatnot we undermine our base of future product innovation and development, while China learns our manufacturing techniques through outsourcing and educates hundreds of thousands of engineers and scientists in our universities, who are capable of bringing their education, research, and innovativeness home and away from the US.

As American CEO's sometimes cannibalize their companies' future for immediate stock price gains and golden parachutes, so our recent presidents, CEO's, and financiers seem to be doing to our entire country.

Re:Everything Real and Tangible will be in Asia

[Anonymous Coward]

I think there's a general consensus that American higher education (undergraduate, postgraduate, and professional) is still the class of the world.

Without wanting to sound like a troll, I think it's fair to say that undergrad is at most on-par with others (mostly since the US students have to play catch-up due to to inferior basic educational system prior to this phase), whereas post-grad is truly world-class. In latter case, part of the reason is due to importing about half of students (which you mentioned)... it makes economic sense, too, at least on short and medium term. But it's also bit risky on longer term.

I do think it's nothing short of miracle, really, that pre - pre-grad (ie. elementary school and high school) education is as sucky as it is, but that the students catch up in college. And it's obviously good for US that this is the case... it's like trailing everyone for first 30 km of a marathon, and then catching up and winning the race. ;-)

Re:Everything Real and Tangible will be in Asia

[MacDork]

• a) Produce Nothing.

  If we could only get rid of farm subsidies we would be doing this already.

Because doing so would be such a great idea: Outsource our food supply to a potentially hostile nation.

• b) Consume Everything.

  Except the services we sell to all the other countries who have no clue how to efficiently produce their goods.,

Whoa... wait a second. Isn't efficient production of goods *the whole point* of outsourcing? I know you don't mean to say Taiwan doesn't know how to produce electronics efficiently or Japan doesn't know how to produce cars efficiently do you?

• build their power plants,

If I'm not mistaken, China is the R&D of the world when it comes to pebble bed reactors these days...

• feed their ever growing populations,

Well, you have me there. We are the bread basket of the world here in America... though that might have something to do with those farm subsidies.

• and cure their sick.

Strange. I've been reading reports of people flying to India for surgery because it's just as good, but cheaper there. And aren't the Chinese on the forefront of stem cell therapies these days? I suppose you're screwed in the event of malpractice, but hey, malpractice insurance is one of the reasons it's more expensive in America.

• We currently have the best university system available (with the exception of possibly England - but theirs is not as widely avaliable) and that translates into the best educated country in the world.

How are you defining "best?" I'd love to see the numbers on that. According to the data in the CIA World Factbook, we usually make the top 20, but I don't see the USA ranking first in much of anything.

• Which translates into valuable services.

How so? Education spending doesn't directly translate into a better educated population. If it did, the USA would be much higher up those CIA lists. For the same reason, even if you were to convince me of all points above, I'm not following your logic here.

• And I would much rather live in a country full of doctors and biologists and engineers than a country of assembly line workers and farmers. The aforementioned jobs all translate to a higher quality of life.

Well, there is that little matter of our 500 billion dollar trade deficit. We obviously can't afford that higher quality of life you mention because either a) we aren't charging enough our services, b) we are paying too much for those foreign made manufactured goods, or c) our services are not valuable enough to compensate for the loss of our less brainy jobs. Besides, farming and factory work is as much an honest days work as setting a bone or designing a wing that is 0.3% more efficient that the one we had last year. Is a profession less noble when it doesn't require a university degree? I don't think so. Furthermore, I think it's condescending and snobbish to suggest otherwise.

• c) Print lots and lots of worthless dollar bills.

  Is a dollar bill worth anything right now anyway? It is just good faith and the accepted exchangable value.

Actually, it is worth something because it is the only currency OPEC accepts. Well, at least until Saddam started accepting Euros. We pre-empted a little 'terrorism' and set that straight though.

Re:Everything Real and Tangible will be in Asia

[razmaspaz]

Whoa... wait a second. Isn't efficient production of goods *the whole point* of outsourcing? I know you don't mean to say Taiwan doesn't know how to produce electronics efficiently or Japan doesn't know how to produce cars efficiently do you?

What I mean to say is that Taiwan is efficient at producing electronics because American companies created the processes to efficiently create those electronics.

Well, you have me there. We are the bread basket of the world here in America... though that might have something to do with those farm subsidies.

I mean that we are the leading developer of geneticly engineered seeds and plants that would make growing plants in Africa possible. if you eliminated the subsidies from the US, then Africa, India and China would all be able to compete with the US in Food Production. (See below for why this is important)

Besides, farming and factory work is as much an honest days work as setting a bone or designing a wing that is 0.3% more efficient that the one we had last year. Is a profession less noble when it doesn't require a university degree? I don't think so. Furthermore, I think it's condescending and snobbish to suggest otherwise.

Hey now. Lets not go putting words into my mouth. My inlaws grew up on farms and I am humbled every time I meet someone who works 16 hours a day to feed their family. That said, working in a service profession almost always translates to more free time and a higher salary (the major components in any quality of life measurement)

Now for the importance of a global food market. This is going out on a limb, but I really believe it is true. If we eliminated US farming subsidies and allowed farmers to get a fair price for their crops at the market, we would eliminate a large part of the world's poverty. I think you would find that most economists would agree with this statement. Because many terrorism experts would tell you that poverty is one of the major friends of terrorism recruitment, I think eliminating farm subsidies would solve a large part of the worlds terrorism problems by drying up the channels of young, poor men.

Now I know...I just said farmers who want subsidies are terrorists. And that is ABSOLUTELY not true, but that's my argument and I'm sticking to it.

Re:Everything Real and Tangible will be in Asia

[Anonymous Coward]

An economy can't survive on services alone. There is only one way of creating wealth, and that is by taking raw materials and applying work and ingenuity to turn them into something worth more than the sum of their parts.

Well, this is the point of the information services economy, isn't it? The raw materials are existing data and lots of energy and foodstuffs, and the result is data with less entropy. You forget that the only reason your "real goods" have value is because people want them. A ship abandoned on a mud flat while everyone goes parasailing has zero value. A chunk (or stream!) of data that people use while parasailing has value. There is no "safe" industry with intrinsic value separate from the constant struggle of supply, demand, and production efficiency.

Re:Everything Real and Tangible will be in Asia

[Some Pig!]

Well said, and needs to be said more. The faith, common among software people and often buttressed with simplistic economic theory, that services can be detached from their underlying physical production, must be dispelled.

I recommend the book Unsustainable: How Economic Dogma is Destroying American Prosperity, by Eamonn Fingleton. He addresses exactly this subject.

It's easy for a technical person to catch Fingleton on details (he misspells Codd's name and makes a mistake while referring to to RISC) but he is an economic writer covering the whole range of industrial production. He makes it very clear where our priorities need to be.

Inevitable

[glockenspieler]

At each step of technological advancement, the less complex "stuff" gets commodified and the real money to be made (e.g., profit margin, not gross) moves up to the more complex, and difficult problem to solve.

"Services" research is basically attempts to solve problems in complex dynamical systems and draws on alot of cutting edge research in systems research, cognitive and social psychology, econometrics, etc. Its not that there aren't novel problems in physics to be solved but a great deal of the practical applications from research in physics is going to be incremental advances in CPU power, memory, etc.

On the other hand, the advances in areas related to services is going to be (catchphrase alert) "disruptive" (sorry but it seems appropriate). That is, areas of research, novel in their own right, will need to be combined to make advances and these advances could radically change organizational structure and practices in entirely unpredictable ways. It seems like the only analogy is with biotechnology. Perhaps to survive, IBM was destined to move either into biotechnology or services.

IBM still doen't grok it.

[Anonymous Coward]

IBM,once the biggest company in the world.
The maker of the mainframe. The maker of the PC.
Now it's a faded shadow, a sullied brand: the
guys that gave Bill Gates half a trillion dollars.

IBM has chosen to not compete. IBM now offers
nothing that a small company couldn't provide.
IBM will continue to go the way of DEC and
Unisys.

Where's the money?

[The Bubble]

Check the painful (for IBM) irony:

Microsoft: We think we have what you need. It's called "DOS."

IBM: Oh, really?

Microsoft: Really; but we're not going to sell it to you: we're going to sell you a license to use it.

IBM: Sound's ok. The money's in the hardware, not the software.

short term

[goombah99]

IBM always was a goods+services company. You were not buying a bar code reader as part of how you would monitor inventory you were buying a big-blue inventory control system and if the best method for you was a bar ocde reader that's what IBM would implement for you. IBM sold instances of objects not function calls.

For IBM slightly higher Short term profits are indeed in services. since much hardware these days is commoditized.

The only reason IBM could get away with just repackaging commondity software and hardware is because they have no competition for innovation. They can just innovate in services and not worry.

But what is IBM going to do when some other company say toshiba decides to sell goods_services and some toshiba engineer invents a holographic terrabyte on a chip memory and they wont sell it to IBM. IBM is giving up its 100 year formula for why people by IBM. IBM means you have an assured path to the best service and hardware. Long term profits are in goods+services.

as the parent poster implied. This sounds like what happened to ATT and HP.

Capability & Maturity Model research could ben

[MarkEst1973]

My company is currently going through CMM Level 2. I can't tell you how much evangelizing I've done regarding standard processes.

The cost of building custom applications needs to drop dramatically. Standardizing how they are built is one step towards this goal. Further research into this can also reduce the cost.

Very competitive bids can be made by a service organization when their cost to produce the service is low, whether that service is network maintenance, custom application design, or what have you.

At least that works on the small scale of our consulting company with a few million in revenue. I should imagine such a thing would scale to a larger company and make them even more competitive.

Re:Necessity -- IBM is in last place

[G4from128k]

I wish them luck, but they have a ways to go. This Information Week survey ranked IBM last among the top 12 big outsourcing service providers. The article suggests that IBM's customers are not that happy with the service yet.

With IBMs large resources and historical expertise in service, they may be able to turn it around. We shall see.

Absolutely

[Anonymous Coward]

We've got all of these great hardware and software systems out there, and still the vast majority of them do not work well together. I'm amazed at how much time I spend syncing data between software applications and various other devices both at the office and at home. The best service oriented tech companies in the future will be those companies who can figure out how to cost effectively get all of these disparate hardware and software systems to work together to reduce and eventually eliminate the task of manually moving data between systems.

Ummm..

[Anonymous Coward]

RedHat called...

They wanted their corporate ideology back.

Old news

[xv4n]

I've been hearing this since 1998.

Big Blue Blunder

[lheal]

I think they're making a mistake.

Their mistake is not in thinking that their profits will increasingly come from services. It's in saying that their profits should come from services, deemphasizing hardware.

It's a matter of the heart of the company. Selling big iron is what separates IBM from everybody else. They're saying their bread-and-butter is no longer a cash cow, to mix metaphors, so out with the bathwater goes the baby. That kind of thinking is short-sighted and small-minded, IMO (rural imagery aside).

What they really need is a few years of anti-bureaucracy zealotry and reorganization.

They might be closer to all right

[qortra]

Why do you claim service markets can't exist without a goods market? More and more, people have all the technology they need to have pretty much every type of content (interactive or not) delivered to their home without the need for physical goods. This means that education, news, entertainment, communication, and most business can be done over the internet.

But honestly, I'm asking, why does there need to be a substantial goods market to back up these services (given that many people already have the technology to do all these things)?

Re:They might be closer to all right

[CSMastermind]

Most services are good based, meaning that they require a good to do their job, from cutting hair to programming this is true. Most other services that don't require goods still use them such as teaching. Technology is constantly improving, thus if service providers need to keep up they'll have to purchase goods. If an economy, or economic subsection, is almost entirely service based (an extreme version of specialization of resources) than they are open to be easily controlled by a cartel from where they recive the goods they need. To avoid this happening (or worse in reaction when it does happen) the economy must react by disverisfing it's efforts to regain a favorable balance.

Re:They might be closer to all right

[bluGill]

Because searvices are about things that people can't do for themselves, things they can do but it doesn't make economic sense, or things they don't want to do but can.

As people learn to do things for themselves the first part goes away, and that is a large part of services for computer companies. (Once people know how to make their VPN client work they won't be calling for help making it work) The second also will go down because once you know how to do something the time waiting for tech support to get back to you is more valuable than the time to do it yourself. That leaves the third.

If you have a steady supply of goods coming down the pipe, you can turn those goods into services because people won't know how to use them.

I cannot do open heart surgery on myself. However only the law and my own reluctance is preventing me from giving myself the vaccinations I should have. (Farmers often vaccinate their own livestock, and they don't get much training so I know it isn't inability preventing me) IBM isn't in any field where the law protects their ability to do services, and unlike medicine there are not major consequences to everyone is if I do my own services.

It's called Outsourcing...

[Peredur]

The company I work for www.proquest.com just signed an agreement with IBM. And you guessed it. My job got outsourced to an India callcenter. They may be providing a service, I doubt it will be as good a service as having local people here will provide. Yay IBM. Way to keep the US dollar in the US.

Re:It's called Outsourcing...

[Anonymous Coward]

Even if IBM kept it in the united states they would only hire contractors.

American won the cold war with IBM computers.

[Anonymous Coward]

China will win World War III with their own computers.

"Services" are incapable of stopping an incoming Chinese surface skimming smart missle.

Perhaps we can complain the WTO when that happens.

This is disingenuous- beware them

[Anonymous Coward]

Sorry to post anonymously but we deal with these guys every day. Where did IBM's (relatively) new CEO come from? That's right, IBM/Global Services. Palmisano has been singing the services song for ten years now, since he was Gerstner's butt boy, and for a long time it made sense. GS has been extremely profitable compared to other leading services organizations (roughly 40% gross margins in a biz where you're not displeased to get 25%).
The problem now is that the service business is flattening out for them, as it is for everyone. And their product divisions (now that Gerstner is gone) have started reverting back to the bad-old-days of IBM FUD and strong-arm intimidation of customers that got them into antitrust trouble in the first place. These days, if you buy anything from IBM, they find ways to force you into buying other stuff from them, often under the guise of restrictive support covenants that do not cover integration with products from other companies. That's not what a service-oriented business does!
In regard to Open Source: IBM IS NOT OUR FRIEND! (Dons asbestos underwear.) They compete vigorously and viciously against any open source product where they have a competitive offering. They only support open source initiatives where they can hurt Microsoft and other competitors. Be wary of this dangerous gorilla that so many F/OSSers have befriended.
IBM's company line is "services are the future" but the are far from being clear on how, or whether, to achieve it.

OpenSource forces even M$ to Services?

[rewinn]

Open-Source may help drive even the biggest software company toward a service model, by putting downward pressure on the market-determined price of software licenses.

A Seattle Times review of Microsoft's Linux lab boss ends with a comment by IDC's Al Gillen: "...open-source software is going to help drive the acquisition cost of software down toward zero," he [Gillen] said, a shift that will require software companies to move "over to a maintenance and support model."

"Pluged in to Microsoft's biggest rival" - Seattle Times (May require no-cost signup to view.)

repeat

[wardk]

Lou Gerstner I recall was a catalyst for the current emphasis on services, but that was what, well over a decade ago.

I suppose they are simply repeating the mantra. This is definately not a new thing for IBM.

Re:Funny you should mention Lotus...

[Anonymous Coward]

Apparently, IBM has really jacked up the fees for support/maintenance on their Lotus products. We have good sized (15,000+ users) Notes/Domino environment. I'm hearing pretty reliable information that we'll be dumping Lotus and moving on to something else...

From what I'm hearing from our Notes/IT guys, it sounds like IBM has shot themselves in the foot (again)...

so...

[PerlDudeXL]

expensive services for expensive IBM products? ;)

they can service my IBM keyboard. it's dirty...

Communicating = Reading Slashdot

[PineHall]

Meanwhile, Maglio began to investigate what systems administrators actually do. He found that they spent between 60 and 90 percent of their time communicating with other systems administrators about systems issues.

Whew! I am glad that they equate reading Slashdot with communicating.

Here's what services means:

[tyates]

1. Find subcontractor who will work for $110/hr.
2. Sub has employees who are making $65/hr.
3. Sell a client $300k worth of software.
4. Charge client $250/hr to install it using the subcontractor.
5. Profit!
So hell yeah, the money's in services, assuming you can find customers dumb enough to pay $250/hr for a websphere guy and $300/hr for his project manager.

misleading.

[Anonymous Coward]

This is accounting gimmickry.
They're throwing the manufacturing profit
over to the financing arm: consumer buys
at a low price and gets screwed by the
finanacing.


GM IS AN AUTOMOBILE COMPANY.


It's not a bank. It does do financial stuff, sure,
with GMAC and there is some dabbling in
mortgage finance.

To characterize GM as not a primarily a car manufaturer is highly misleading.

Erm, best process comes from users.

[benow]

Users, ie people that guid processed to perform operations, are quite inventive... while top-down research is good (definately better than little or no research, ie energy sector), it can often miss the subtleties or even the entire gist of processes and systems to be optimized. A close tie with those that actually do the work, with analysis of why and how it worked out that way, can do much to guide systems... especially at the early stages... then those analysed processes and problems can be optimized and solved in a top down way. The solutions then may be rolled out to others and solutions to intersecting problem domains may also be studied, but, without the bottom, there is no reason for the top. AFA services go, breaking down the barriers to getting stuff out there is always a good idea, especially if using the stuff is going to lead to more and better stuff. Definately involving the remote hands-on research team (ie the client) and increasing the general knowledge of the whole will result in better stuff vectors, yay!

IBM's credit rating has been falling, too.

[Anonymous Coward]

They'll be junk in 10 years; if they are not in complete default.

R&D becomes a loss leader

[Anonymous Coward]

They get some from the OSS community, and they do a lot themselves. The idea is, they stop treating it as a revenue generating activity, and treat it as a loss leader.

By making the products they support very good and free (for some reasonable definition of the word), they entice people to use them. Then they compete for the support of those products. And, if they largely developed the products themselves, they have a big leg up.

erm, /s/buid processed/guide processes/

[benow]

where be that edit link?

Not quite true

[doombob]

It seems to me that customers are really wanting the balance between a great product associated with the service they receive. Where I work, we've been promoting basic computer classes when people purchase a new computer. It's not enough that people want a cheap deal from Best Buy or Dell - they want to know how to use the systems too. It costs more initially for the customers, but they save in the long run.

We're done?

[Anonymous Coward]

So you're telling me that we're done now? No more groundbreaking R&D that needs done, no new classes of products? Just incremental revisions and series of the same boring server/network/workstation technology we have now? Who's going to be bring all the new and exciting technology out of our educational and research institutions to market? This is the same crap that happend to the once great Bell Labs, HP, and now IBM. How is it that great companies like this can loose thier way so quickly? I have no doubt they can turn a profit selling only services, but is that what they're all about?...whatever it takes to turn a profit? Guess so. Maybe its for the best, I don't know. Just seems like a waste. Kinda like if NASA stopped doing what they do and went into the airline carrier industry.

New Standards

[bstadil]

IBM is perfectly positioned to be the champion of new notably middleware standards.

They can expand their R&D and with no real axe to grind they can secure that new and needed standards gets approvel quicker. Their interest is the quality of the standard that they can then offer their clients as a new service.

Take a look here and you will get a good feel for the Future IBM

Moving to software? AIX?

[pjbass]

I hope this is a shift for the good. Speaking as a frustrated AIX admin, I'd love to see IBM shift their focus to quality and hardening of their software base. Our shop abuses any OS you give us, so we knock all the corner cases out, and I'll tell you, AIX has more than I'd like to admit.

A rant about editors and a comment from an oldie.

[Anonymous Coward]

TFGeditor and Zonk could both usefully have noted in the summary that the quoted Paul Horn heads IBM Research, so his comments apply to that part of the company, not IBM as a whole, as the misleading title implies.

It's not as if every /. reader - let alone commenter - takes the trouble to RTFA.

Which is worth reading. IBM Research does a lot of work that isn't directed at immediate short-term business goals (reflected in the size of IBM's patent portfolio), but it's not in business to advance what SF-author Larry Niven usefully characterised as 'abstract knowledge' - knowledge with no immediate obvious use - or, in Einstein's words, "If we knew what it was we were doing, it would not be called research, would it?"

<oldfart>

I've been in the IT business since the early 1970's, and started propagandising colleagues that we were in a service industry a few years later (mostly I was preaching to the choir, the bosses were long intent on selling product). Looks as though IBM Research is now expected to be a little more focussed on middle-term business needs than may have been the case in the last decade or so.

There are long lead times on the effects of policy changes like this, of course. I doubt I'll be interested in looking at the results after another couple of decades....

</oldfart>

I'm not suprised they said that....

[Eskimore_]

They couldn't beat Dell in the PC products market so they think "products suck, services are the way!"

Well just because YOU (IBM) can't make your products business profitable doesn't mean the products business is not profitable.

WTF? This is NEWS?

[Anonymous Coward]

IBM has stated their goal of transitioning from a hardware-led company to a services-led company since Gerstner tool over as CEO in '93. Pretty much all their major moves since have been in that direction--the organization of (and massive investment in) IBM Global Services, the purchase of PwC Consulting, the spinning off of the hard-drive and personal computing business.

This has been IBM's clearly stated and well demonstrated direction for over a decade. Where's the "News" here?

Re:Funny you should mention Lotus...

[51mon]

Would you want to support Lotus Notes, with their own way of doing everything dating from before most major OSes had things like PPP, and now expected to support everything integrated with the client.

Sell it to CA they know how to let a product die gracefully.

haha

[Anonymous Coward]

which would explain OS/2.. We miss you, OS/2!!!

A Nation of Salesmen

[pjkundert]

As long as IBM continues to Create, rather than simply Vend, they will be OK. Unfortunately, (as HP discovered), it is very difficult to not lose one's technical edge, when ones corporation is run by a bunch of stuffed shirts...

An excerpt from A Nation of Salesmen, by Earl Shorris:

I saw that selling, in all its forms, has achieved dominion over the world in our time, not only determining the economic spirit of the nation but deeply affecting its social, political, cultural, and moral life. I saw that America has become the land of the salesman, Homo vendens, who is both dangerous and afflicted.

Under the dominion of Homo vendens, we are no longer free to know the world. The salesman now informs us. In the mix of mind and matter that is perception, the information comes not from our senses encountering reality but from the salesman. Thus we have lost the world.

Right

[balbeir]

After dealing with IBM on several occasions it appears to me that IBM's business model is as follows:

1. Make your products as difficult to install and maintain as possible

2. Sell services to help your customers do things that they should have been able to do themselves in the first place if your products weren't that crappy.

3. Profit !

Services, the only way to battle warez

[jago25_98]

This is the only way to battle warez; sell access to a website rather than code itself.

As someone who is aware of what the world would be like without warez I've never shared my observation.

It seems another person has relised the evolution.

However, it opens up the possibility of a more sane world regarding IP.

I doubt that world will be relised.

Well Duh!

[EmbeddedJanitor]

IBM has been a service company - rather than a product company - for at least 20 years now. Sure they've always sold lumps of iron, but the bulk of their revenues have been services in one form or another.

IBM Says its Future is in Services, Not Goods

[TechnoGrl]

TRANSLATION: We've fired so many of our development team in order to increase compensation for our highest level execs that we can no longer be innovative so we're going to "market" bullsh*t ideas as "value added services".

Pax Requiem IBM

Re: IBM Says its Future is in Services, Not Goods

[mikefe]

Are you kidding? In your cubicle everyone hears you breathe, speak, yell, cough and fart!

History repeats itself

[vanyel]

Does anyone remember Control Data Corporation? Used to be, a long time ago, there were two main players in computers: IBM handled business and CDC handled scientific computing, with some gnats flying around, though DEC was more of a dragonfly ;-). The world changed, however, and CDC waned in the 80's. Their spin: "We're going to go into services, not hardware". I think they're a vague memory in the absorption history of another company now (Hmmm. I guess not quite so vague, but I've not heard them mentioned anywhere in ages: CDC Wikipedia entry)

Amusingly, COBOL programming on a CDC Cyber put me through college. When I was about to graduate (81) and doing the interview thing, I'd been put in touch with a head hunter that specialized in finding positions for Cyber programmers. I went to an interview in Dallas, TX, and although it went well, when I came back, I said "no, I want to work with microcomputers, not mainframes." I got the classic "there's no future there" response. I've always wondered what became of her...

1997 called.

[Associate]

They want their business model back.
They were probably working on it before 1997, but that sounds like a good year.

GM's customers...

[Anonymous Coward]

GM learned long ago that making physical stuff is a pain in the rear because of unions and pension obligations and became a mortgage lenders (GMAC) that makes cars as a hobby.

But if GM didn't make cars and employ all those workers in the auto industry, then who would be taking out all those Di-Tech mortgages?

It's a vicious cycle that's gonna ultimately collapse in upon itself someday.

Re:Necessity -- IBM is in last place

[_Swank]

Note that outsourcing is only a piece of the services offering of IBM. The outsourcing of which they speak is when a company outsources their entire IT department to IBM. This is a relatively small portion of IBMs services compared to their more typical consulting services where they provide more typical project based stuff.

Spot on

[Colin Smith]

Cue announcements from IBM of the largest losses in recorded history.

Then who does make a decent non Asian machine?

[edgedmurasame]

Since they've gone from the path of selling high quality machines to bowing out to Hong Kong knockoff quality companies such as Dell, is there a place one can spend the extra money for a US design and for the most part, US or Non-Asian parts? Apple doesnt count here, they just ship their designs from China ala IBM Thinkpads. Also, until one can build a laptop from the ground up with our own choice in parts, the excuse of "build your own" doesnt really hold up.

MOD PARENT UP

[Anonymous Coward]

Intelligent and truthful response.

Write decent software first ...

[Anonymous Coward]

Here's a thought IBM, how's about spending some of that 6bil on writing decent middleware and server software so that we can deliver some of those services.

IBM software is some of the worst ever written. Blue is a joke, and if it wasn't for their great sales force, they'd be a big blue dead duck.

Great Link! Mod parent up!

[CaptainPinko]

I thoroughly enjoyed that article and read every page. If you haven't read the article everyone please do. Send it to a friend. Reads like a novel, enlightens like a documentary.

In related news..

[OneSmartFellow]

Mr. Smart Investor will announce he will be selling all of his IBM holdings, and is now seeking a company that remembers how to make products.

The world's oldest profession

[kesler]

The world's oldest profession is based on services, not goods.

Services are more profitable than goods...

[spammerbox]

I have a business in which I sell goods and services.... from my experience I can certainly tell you that services are more profitable than goods, and goods are only the tools you use to give services...

Service-Based Economy

[pipingguy]

Want fries with that?
==

PS The new must login requirement for foo.slashdot.org is surely an added inconenience to encourage existing subscribers to pay up.

No capitol for investment

[heroine]

The common belief everywhere else in the world besides u.s. is the reason you try to make money on services instead of products is because you don't have enough capitol to invest in products.

Unlike a service, says the rest of the world, a product requires vast amounts of capitol to design and test. It takes capitol to build a factory to make a product. It takes capitol to build initial batches of the product for the initial sales.

Being a debtor economy, u.s. doesn't have the capitol needed to make products so it's invented a new type of economics where you don't need products as long as you can provide a service for a product that someone else invents far far away.

Most of u.s. thinks services are the way to go. bls.gov says differently. The trade deficit says more money is being spent on buying the products than is being made servicing them. The consumer price index has outstripped wage growth for 2 years, showing people value products from elsewhere more than they value their own services.

In the 4 years since u.s. started evangelizing the value of services over products, the data has never backed it up.

What Millions?

[bluGill]

What millions starving here? The population of the US does not contain millions of starving. I'm sure there are some who refuse to get help. (and a few lazy who have used all the help they can get, and despite ability still don't get a job) However millions is beyond believeable. There are only 300 million people in the US. Even if we assume your millions is 2, that is 1 in 150 starving? My local city has a population of 2 million, so there should be 10,000 people starving - a number I do not see.

Now if you count people below the poverty line, yes there are a lot of them. I was well below the poverty line for a few years of my life though, so I know for a fact that you don't have to starve just because you are below the poverty line.

I worked with families who were not starving on the same income as me, despite making the choice to only have one income! The life was not easy, we didn't have any fancy toys. No Cable TV, (nobody had internet then, but now we would get it at the library) our cars just barely ran. We also didn't gamble every penny we earned, and rarely could afford a drink or a smoke. (those who did that)

I have no sympathy for someone who can work, but doesn't. (There are many disabled who cannot work, or can work but not a good job, I sympathize with them) I have no sympathy for those who starve because they gamble/drink their money away. As my barber says, "In the 30s there were many starving families, but the men in those families still had enough money for pinballs downtown. Their co-workers who didn't spend their money on pinballs were not starving, though times were just as hard for everyone". He is old enough to remember.

Thats not how GMAC works

[bluGill]

You need to read and thing about the fine print on those 0% offers before you make that claim. GM was offering a rebate on all those cars, but when you went for 0% financing GMAC took the rebate. If you do the calculations, you pay less for the car if you get a normal loan from a bank, and take the rebate and put it in a saving account for the life of the loan. (This might require a money market account, I'm not sure).

Or to put it in simple terms: GMAC was collecting all the interest on the loan up front, and charging high interest rates than their competition!

Re:Thats not how GMAC works

[TykeClone]

I never got that far - never been in the market for a new car (which was also a requirement for the 0% interest if I recall correctly).

From what I understand, GMAC is not run like a bank and doesn't have to defend its loans from examiners like a bank would - and now they are starting to pay the price as their debt is spiraling towards junk status.

As far as the interest goes - that's all well and good as long as they're receiving payments. It doesn't take too much bad debt to cut into that slim margin that you were talking about!

IBM R&D will continue - IBM just won't build i

[csoto]

IBM's R&D strategy for the last decade or so has been to take hard science and develop it into product technologies. Now, IBM doesn't necessarily need to produce those products. They simply need to license the technologies for others to build the products that they can then use for their services operation. This includes storage technologies, chip fabrication, even open source code.

IBM's mantra has been, for some time, "sell anybody's boxes, as long as IBM gets paid." It's a smart move.

Re:IBM R&D will continue - IBM just won't buil

[Archimboldo]

Good point.

I wonder what they are going to do with the cell? It's hard to service something that isn't used much. They should develop some killer tools for it.

I agree

[djinn2020]

I can see where they're coming from with this services, not goods thing.

Think about cars in their early days (along with computers, but i'm sticking with cars). Many, many more people knew how to fix their cars because they had to, there was no Ford service center down the street. As time went on, less and less people knew how to work on their own cars until the present, when a tiny percentage of car owners know what "that belt looking thing" is under the hood.

The same thing applies to computers. Many many people in the computer's early days knew how to program and build their own computers. Fast forward 10 years when people buy computers because it was the cool thing to do (you know, the cool factor and the computer games). Now Windows XP includes the 2-page "Quickstart Guide" instead of that 3 volume encyclopædia set they used to include. All these uninformed users don't know where to begin when something goes wrong, so IBM saves the day!

*Note: I'm aware the Microsoft knowledge base has moved online, however the omission of the materials from standard distribution indicates a small demand in the user base for it*

Xerox is a copier company!

[Luthair]

imo it sounds like they're shooting themselves in the foot in the long run.

So much short sightedness for short term stock increases :(

Re:Funny you should mention Lotus...

[Diag]

Ah, insightful and funny.

The thing with Notes is that, I believe, it still competes reasonably well with Exchange, when you look at the number of end users, because a lot of *very* large customers use it.

One of the biggest users is IBM themselves.

Morronic

[Ham_belony]

If IBM drops their physical productline, they will go bust sooner then they could spell IBM. Companies like IBM, HP, SUN and Apple can't go business without selling some equipment. That has been their businessmodel ever since they started. They have to sell the whole package even with low(?)profit margins on their hardware. At the moment it will be hard to compete with subsidised economies like the chinese, but everybody should keep their headsup, look forward and know for sure that those economies will go bust as they are letting us go bust.

Mod parent funny!

[Anonymous Coward]

Good one, mod parent funny!

Laptops

[phorm]

Yes, and such hardware is often cheap to manufacture, and cheap in quality. When we buy laptops at work it's a toss-up between quality/reliability (generally IBM) and lower quality/cost.

Quite often we hit the lower cost items, and as one the technicians who has to service said hardware I'd have to say it sucks. Most people don't realize that even if your cheaper laptop has a 3yr warrantee, that doesn't get you back the 2yr worth of data that goes down the toilet when the el-cheapo hard-drive overheats and dies.

Siebel CEO ousted..

[Ammalgam]

Just an FYI...have any of you guys heard the news about Siebel? Siebel Ousts CEO, Taps Former Webvan Head © Reuters 2005. All Rights Reserved. APRIL 13, 2005 SAN FRANCISCO (Reuters) - Siebel Systems Inc. (SEBL.O: Quote, Profile, Research) ousted Chief Executive Michael Lawrie on Wednesday, days after the business software maker warned quarterly sales would be the lowest in five years and as a group of disgruntled shareholders was to meet to mull the company's future. Siebel named George Shaheen, a Siebel board member for the past 10 years, as the new CEO. Shaheen left Anderson Consulting, where he was president, during the dotcom years to become CEO of now defunct online grocer Webvan Group Inc. "The board determined that a change was necessary," said Tom Siebel, chairman of the board and company founder, in a conference call. "Results over the last four quarters, in general, did not meet investor expectations and they did not meet our internal expectations. The board did a very thorough review," he added. Shaheen said in the call that Siebel's costs would come under scrutiny and that calls by some shareholders for Siebel to better-use its $2.25 billion in cash were being examined...... Story at http://www.peoplesoft-planet.com/index.html