Ex-Employee Divulges Shortfalls In IBM's Cloud Business

CowboyRobot writes "IBM's cloud computing revenues are smaller and less 'cloud-intensive' than customers and Wall Street analysts might think. That's the claim of a former IBM employee who backed up more than a few of his/her critical assessments of the vendor's cloud prowess with a number of confidential internal documents shared with InformationWeek. The documents put IBM's 2012 cloud-related revenue at $2.26 billion, a figure the company has declined to disclose publicly. In 2011, IBM did issue a roadmap that set forth the goal of reaching $7 billion in annual cloud revenue by 2015, so the much lower figure raises doubts about whether the company is on track. Noteworthy is data that shows that roughly half of current IBM cloud revenues are tied to hardware, in many cases systems used to run customers' private clouds or partner clouds."

Comments

Cloud Often = Same Old Datacenter

[xxxJonBoyxxx]

>> roughly half of current IBM cloud revenues are tied to hardware, in many cases systems used to run customers' private clouds or partner clouds.

Does this really surprise anyone here? Isn't that the whole point behind "private cloud" to get top management derps to check the "cloud" box without actually changing how the existing datacenter and applications are run?

Re:Cloud Often = Same Old Datacenter

[Nyder]

>> roughly half of current IBM cloud revenues are tied to hardware, in many cases systems used to run customers' private clouds or partner clouds.

Does this really surprise anyone here? Isn't that the whole point behind "private cloud" to get top management derps to check the "cloud" box without actually changing how the existing datacenter and applications are run?

I miss the day when clouds were called servers...

Re:Cloud Often = Same Old Datacenter

[Frobnicator]

No, it shouldn't surprise the geeks.

For geeks, "the cloud" simply means remote computers. The "cloud" referencing the icon for the Internet that has been in use since the early 1970s in network diagrams.

For non-geeks, "the cloud" is a mystical source of infinite storage and infinite computing power, harnessed by the magic of the Interwebs.

Re:Cloud Often = Same Old Datacenter

[Zak3056]

For geeks, "the cloud" simply means remote computers. The "cloud" referencing the icon for the Internet that has been in use since the early 1970s in network diagrams.

For non-geeks, "the cloud" is a mystical source of infinite storage and infinite computing power, harnessed by the magic of the Interwebs.

You've just described the relationship between a residential electrical customer and the electrical utility (the end user doesn't see the turbines, he just knows that the magic wall outlet makes his TV work). Which, all things being equal, is a pretty good comparison, given that "the cloud" is really just a reversion to the old time sharing model of computing. We geeks supply the GeeBees and the WiFis, and the rest of the world plays Angry Birds, secure in the knowledge that they are technologically savvy because they "understand" "the cloud."

Re:Cloud Often = Same Old Datacenter

[hutsell]

I miss the day when clouds were called servers...

I also miss the day when the client-server architecture was considered better than the dumb terminal-mainframe model, a variation of that model now being being marketed as the cloud.

Fallout...

[Anonymous Coward]

Didn't take long for the second quarter rash of layoffs to produce some fallout. I suspect there will be more former IBMers coming out with internal docs.

Re:Somehow I smell Microsoft is behind this..

[djupedal]

Nah....those wonks are still trying to get Wi-Fi to work. After all, they were last to the internet, so be patient.

Re:Oh no!

[swan5566]

Except for those who are are already making much more than that.

Re:Oh no!

[Anonymous Coward]

Ha, that was my thought when it was revealed that Microsoft had sold $900 Million!!! worth of surface tablets. Which was a measly 1% of the market.

Oh, no they sold almost a billion dollars worth of product and that was a _FAILURE_. Gaining 1% market share the quarter in an established market with multiple players is actually pretty good. The problem of course is that they thought they were going to march in an take 30% with just a few hundred million in advertising. You have to wonder what the MBA's were thinking... Oh wait, that is probably the problem a bunch of MBA's that haven't actually started/grown a business.

How many of those Chinese android manufactures sold a billion dollars worth of product? I'm betting most of them are happy if they hit 10 million.

Angry mob of IBM lawyers with pitchforks imminent

[mrbester]

"He / she's a whistleblower! Can we burn him / her?"

Re:Oh no!

[wjcofkc]

What planet are you from? MS wrote off $900 million in surface tablets. They didn't sell them. There are about 6 million units collecting dust in a warehouse right now.

maybe...

[Charliemopps]

In 2011, IBM did issue a roadmap that set forth the goal of reaching $7 billion in annual cloud revenue by 2015

Is it possible that since 2011 when the cloud hype was at its peak, IBM like the rest of the world has realized that "the cloud" has some serious drawbacks and companies all over the world are pulling their assets out as fast as they can? Ironically today our entire Sales org was down for 2hrs because of some network hiccup 300 miles away from us cut off access to our "Cloud" based sales app. Per the vendor this was not an outage of course. The service was still up we just couldn't connect to it.

There is no IBM

[rsilvergun]

there's a bunch of sales reps and H1-B contractors gathered round an old name nobody remembers....

Re:There is no IBM

[Zeromous]

You make it sound as if everyone has been laid off from IBM and replaced with contractors. I'm sorry to tell you but it's just the positions that no longer provide value.

Re:Angry mob of IBM lawyers with pitchforks immine

[Anonymous Coward]

Please explain how this is "whistleblowing". Was IBM doing something illegal? Were they cooking their books? However, this guys walks out with confidential material and gives them to the paper. That sounds more like the action of a disgruntled worker. If I was his coworker I would be worried about sharing with him, because I don't think I could trust him.

Snowden's got nothing on this guy...

[HockeyPuck]

This guy may be ex-IBM, but IBM's lawyers are gonna sue this guy into oblivion...

That's no moon... that's Armonk...

Re:Oh no!

[NatasRevol]

Microsoft had sold $900 Million!!! worth of surface tablets. Which was a measly 1% of the market.

Or 100% of Microsoft's market share.

The coud

[Mister Liberty]

is hot air.

if you cannot build, buy

[lophophore]

IBM bought SoftLayer, one of the larger Cloud Computing providers in the US. That will contribute to their revenue quite a bit.

The employee who disclosed confidential documents better lawyer up, IBM is known for hiring the sharpest-toothed lawyers money can buy.

What the hell are you talking about?

[rsilvergun]

IBM was pretty public about laying off all the non-Sales positions and moving anything to do with technology and engineering overseas or giving it to Visa applicants. It was a cornerstone of the strategy. They're a 'consulting' firm now. They sell commodity services using cheap foreign labor paid at subsistence wages.

I suppose if you mean that the sales people are the only ones that add value you're right, in your own fashion. But if you feel that way what the heck are you doing on /.? Astroturfing?

Re:What the hell are you talking about?

[H0p313ss]

laying off all the non-Sales positions

That's not even close to the truth, there are still thousands of Americans doing development and support in the United States, the Littleton, Austin, Beaverton and Raleigh labs are still going strong. There are more around the world, but the population of the united states is less than 5% of the world.

You insensitive cloud!

[Tablizer]

smaller and less 'cloud-intensive'

I am cloud-intensive, you insensitive clod!

Re:Oh no!

[Tablizer]

Don't give 'em ideas