Not to be snarky or anything, but a legitimate question: what does IBM actually do? I used to work for a partnering engineering team at <big_corp> and met with dozens of enterprise clients (think Fortune 100) and I never heard anybody ever mention any IBM products. I am really intrigued to understand what keeps this company afloat. My main hypothesis is selling to government and acting more as a holding of acquired companies than anything else.
Consulting: $4.8 billion (even after selling off Kyndral)
Software: $7.3 billion
Software includes all of Red Hat, a pretty big security business, and "transaction processing" which isn't explained but I guess is running payroll and the like for other companies.
So lots of un-sexy stuff that never makes HN but keeps the world running.
It's an interesting thing they have going on. I worked at a large retailer who depended on an IBM mainframe running DB2. That thing was crazy expensive and their migration to their cloud mainframe offering was even more expensive for the raw compute, but made sense when maintenance and everything was added.
Something like 90%+ of the top 100 banks depend on mainframes and same with the top 100 retailers. Few customers that pay a lot is a solid model.
One of the more surprising metrics I've heard from Andy Jassy is that despite trillion dollar companies generating huge amounts of cash from cloud, 95% of enterprise workloads are still not on cloud.
Realistically, the cloud is just too expensive compared to most other solutions. AWS, Azure, and G Compute are all easily 10x the cost of hiring a good team of sysadmins. When you require a lot of computing power, it just doesn’t scale financially
>>migration to their cloud mainframe offering was even more expensive for the raw compute
Mainframes were always cheaper. The only reason things like Hadoop and MR even picked up for heavy batch jobs, was because in the last decade lots of cheaper consumer hardware was available, due to companies having over invested in building data centers. The excess capacity was sent to hadoop work. If you have continuous ongoing investments in Mainframe tech or wish to start something new, you are better off using Mainframes.
> Their cash registers can run the 4690 OS or Windows/Linux/whatever, but, most choose to run the 4690 Operating System due to its security features.
> I worked at IBM in their retail marketing side in the early 2000's, so, it's possible that everything I've typed here is 20+ years out of date.
4690 is pretty close to dead. Maybe not entirely dead, but closer to that status than it has ever been before. From what I understand, even before IBM sold it to Toshiba, the plan already was to discontinue 4690 and replace it with Linux. At the time of the sale, IBM was in the progress of replacing it with "IRES" (IBM Retail Environment for SUSE); Toshiba has instead chosen as the replacement its own Linux distribution, "TCx Sky", which is a customised version of Wind River Linux.
The terminal release of the 4690 OS was V6R5, released 7 years ago. The latest security update was CSD 2010, released in January 2020. There are probably still some people using it even today, but it is very much a legacy system, with zero plans for any further enhancements; it isn't even clear if there will be any further security updates in the future, or if the January 2020 update was the last one. (I guess it may depend on how many people are still using it, what further security bugs might be discovered, how much those people are willing to pay to fix them, etc).
I find them really interesting because they are a whole other world, the "road not taken". They are very different from Unix/POSIX/Linux/*BSD/macOS/etc, even moreso than Windows is. Windows is not a Unix, but it has borrowed a lot of ideas from Unix–and is arguably growing more Unix-like as time goes by, borrowing more and more ideas from Unix-land–Windows is a lot closer to Unix than most mainframe operating systems are–even MS-DOS is a lot closer to Unix than most mainframe operating systems (indeed, if you read the source code and design docs for MS-DOS 2, they repeatedly mention the influence upon it of Microsoft's Unix, Xenix.)
Consider some ideas which exist in z/OS but not in Unix or Windows:
- record-oriented file system: the filesystem is aware of the record-boundaries of files, whether they contain fixed length or variable length records, etc – and enforces them
- indexed files: key-value type files are built in to the filesystem, not some add-on library
- the catalog: a database mapping file paths (dataset names) to the volumes they are stored on: so you can move a file to another disk volume (or even to tape) without changing its filesystem path. You can kind of approximate this using mount points, symbolic links, etc – but it is a lot messier
- partitioned data sets (PDS/PDSE): like ZIP/TAR files, but again, built-in to the filesystem
- block-oriented terminals: you send/receive data to terminals as a screenful at a time, not a character at a time
- DDnames: your program inherits (the moral equivalent of) file descriptors, but instead of just having numbers, they have names (instead of fd 0, you have a DD called "SYSIN")
You can argue about whether the above features are sensible – the designers of Unix were well-aware of them, but decided they were examples of unnecessary complexity – but sensible or not, they are interesting.
> I find them really interesting because they are a whole other world, the "road not taken".
This is so interesting, having witnessed the commoditization of PCs, the Cloud, and now virtual desktops on the cloud. We're basically reinventing the multiuser mainframe after discovering it actually had good proposals.
The problem is, it's being reinvented with a monstrous degree of complexity and fragility. It's retaking the road not taken, but carrying the other road with as well.
> And language environments, which keep oldie programms running on modern hardware without recompilation.
I think we've had this discussion before. The Language Environment (LE) on z/OS doesn't do that. The Integrated Language Environment (ILE) on OS/400 [0] does do that. But while one part of ILE (the CEE runtime and its API) is common code between z/OS and OS/400 (and also VM, VSE, TPF and OS/2) – that bit doesn't do any of the "keep oldie programs running by recompilation" stuff. Whereas, the parts of ILE which does do that (the OMI to NMI translator, and the NMI to POWER translator), is 100% OS/400 specific, and has no equivalent on any other IBM platform (z/OS included). You seem to be getting led astray by the fact that "Language Environment" means a lot more in OS/400 than it does in MVS – it is a mistake to assume that just because the later uses the same phrase, that it uses it to mean anywhere near the same thing. LE on MVS is just one (relatively small) part of the capabilities provided by ILE on OS/400.
(Also, this "platform independence" doesn't really have anything to do with anything "Language Environment", since it pre-exists ILE entirely – EPM and OPM before it had the same ability. You are associating "Language Environment" with something which was never actually the selling point of ILE, since it was something OPM and EPM already could do, at least in principle. The real selling point of ILE is that it could support recursive/stack-based HLLs such as C and Pascal more efficiently than EPM, and support mixing code from multiple languages much more easily than OPM and EPM allowed. Plus, a lot of its implementation was shared with z/OS and AIX, which was a bonus for IBM – not just the CEE runtime, but also the compiler backend–the later is not considered part of LE on z/OS, rather part of the compiler products)
[0] Yes, IBM i, I know – but I hate that name, it is confusing. IBM should have just stuck with OS/400, it was far more memorable and distinctive.
Tried to edit my original comment because two people asked the same, but it didn't update, so I'll resume it here:
- No devops, you have real sysadmins whose priority is security and system administration, not development.
- Not relearning to invent the wheel every six months. The technology changes incrementally. If you get out of the field for a few years, read the "what's new" sections of the new manuals to catch up.
- Documentation. IBM docs are great, remind me of NASA docs. They have everything you need, you can go days without googling a problem.
- Backwards compatibility. Decades old sources can be compiled, decades old binaries can be run. Architecture changes are handled transparently.
- Simplicity. The interfaces might seem primitive compared to PC OSs, but there's also less complexity, and less attack surface.
- Uptime. Almost everything, including CPUs, is hot-swappable. This doesn't add to the joy, but it's remarkable.
You're spot on about simplicity, and it's the reason AWS may not remain the top cloud provider for much longer. There is no effort to implement any sort of consistency across their famed two-pizza teams -- that wouldn't be "Day one". So each service has its own IAM quirks, making basic security at scale a nightmare, and in some cases impossible.
Azure policies are comparatively a breeze, making it the smart and increasingly obvious choice for any regulated (read: large) corporation.
You don’t need to wrestle AWS, Docker, Kubernetes, Terraform, Spark, Aurora, etc… to run a batch job. The kinds of tasks that take integrating multiple different providers and software packages to do in cloud architecture are OS-level features on mainframe. It’s less flexible and more expensive, but an order less accidental complexity.
IBM is a dinosaur company that exists because of embedded connections in government, banking, and defense. They charge 100x the going rate for ancient tech that’s insecure and an absolute nightmare to develop for.
The sooner everyone drops anything associated with IBM or Oracle, the better for everyone. Absolute cancers.
Or IMS (the other, older mainframe transaction and database system), but yes I immediately had the same thought about the "software" category. A bet a substantial amount of that is software that integrates with the mainframe in some way.
Poor people, must be soul crushing to have a well-paid, 9-5 job with technologies that don't have an eternal carrot on a stick that prevents them from achieving mastery at their trade.
Where is the excitement of working during the weekend to make sure the dozens of random libraries npm downloaded as dependencies of the one you need to display a neon outline in the list of products are compliant?
One of the best places I ever worked. Really good engineers, and a really calm workplace where you are given the time and space to do good work. No dysfunctional 2 week sprints or hours of "agile ceremony" madness, etc. Of course this was 20 years go, and maybe it depended on the team you were on. I don't know if it is the same now. The only time I had a problem there is when my manager came in and said I had to take down my anti-microsoft sign. Idk why - maybe they were trying to do some deal with them.
Worked there in the 90s. Probably the most professional engineering environment I've ever seen. And compared to what you might expect of the time and place, quite egalitarian. My boss and half the team were women, and there were several people from unusual backgrounds that would be considered economically disadvantaged these days. Everyone had an office. No politics. Just GSD.
Nah it's the same now. IBM was my first tech job straight from construction/concreting. Work environment was a dream, an absolute pleasure. Got opportunities to pump out training and work on many parts of the stack way further up than I expected. I was a remote area hardware tech. This was bout half a decade ago. Best job I've ever had.
There is some serious engineering in what they do -- CPU and memory architecture, OS design and implementation, high speed networking, homomorphic encryption are all areas I've collabed with IBM. I assure you, the average engineer quality at IBM I've worked with has been incredibly high and the people themselves very _very_ creative.
They are a major systems integrator in the financial and govt world, they have a massive professional services team ensuring everything from AIX to RHEL7.2 is running and not breaking for customers, they have very smart HPC and Quantum Chemistry people working on building Quatumn Computing algorithms, they are building features in IBM Cloud for our EU banking counterparts (too big to fail French banks seem to have converged on IBM cloud as their platform of choice), managing a major Docker Hub competitor (Quay), building out and managing the primary on-prem Kubernetes orchestrator (OpenShift), and are managing the primary incident response platform used by enterprises.
There are a lot of issues and gripes to have about IBM, but they are a very critical player in the industry. Tech Bros on HN just don't have the visibility and remain in their weird HN echo chamber.
And IBM 100% does still have a middle management problem - no way I'd ever work there unless I was at least a VP.
>Tech Bros on HN just don't have the visibility and remain in their weird HN echo chamber
As someone who has worked in consulting on the Enterprise side for 25 years, the HN attitudes towards IBM, SAP, Oracle, and even SaaS companies like SF/SNOW/Adobe is baffling. Corporate America would literally cease to function if these companies disappeared one night, but would hardly bat an eye over the disappearance of Facebook, Apple, or even Google.
Hacker news has always been an outgrowth of the startup world, and has never had much respect for "serious business". I guess because of the slow pace and paper pushing, which is a valid complaint about working at these kinds of organizations. It's something you eventually come to understand, but as a young person fresh from a CS program I understand how it can feel.
This is likely to become less extreme over time as our experiment with low to negative interest rate policy comes to a close.
Even the startup conversations on here are completely detached from reality to be honest. There's a lack of understanding among commentators about how VC works, Category Creation, Pricing Strategy, GTM, Sales, etc. Most YC startup founders have their own private board at this point that they discuss stuff on now.
HN has devolved into burned out Gen X or elder Millenial FAANG engineers bitching about their gilded cage existence.
This comment made me realize how much of an echo chamber HN is (myself included). We seem to call ourselves "tech enthusiasts", but it's only for some tech, and we wonder how other tech survives because we do not comprehend their usefulness.
None announced as yet. Definitely changes and "belt tightening", and other optimizations (most people had assumed that bonuses were automatic and 100%, but they will be more tightly focused on individual performance now).
That is so wrong. Kyndryl is (was) just infrastructure maintenance and consulting. Business services (IBM Consulting) is that ~5B/quarter thing while Kyndryl keeps sinking.
I'd say legacy mainframe use is a big ticket item. My Fortune 500 company still has IBM mainframes for some internal corporate functions, and I know military/gov still use said mainframes to manage legacy systems. Those contracts can be quite lucrative.
But yeah, they do seem to be running on inertia. I've never heard of anyone buying anything IBM for new work.
Most of revenue for IBM comes from consulting, which needs heavy headcount. Up to 2011 IBM was like a leader in consulting making 100+ billion in revenues a year including all divisions , downfall started after that. It’s not even making half of it now. Accenture/Deloitte and others like Cognizant are eating its lunch.
They buy other companies and then drain their life force into IBM like corporate vampires. Once their acquisition is on life support they graft the remains onto their body and look for new victims to consume.
> Chief Executive Arvind Krishna has been trying to pivot Big Blue from its traditional business of infrastructure and information technology services to the fast-growing cloud-computing market.
Skating to where the puck has been. While other companies are taking a look at how much they are spending on cloud. It's already a commodified market yet IBM sees itself as the one to grow into it.
But to selectively quote from slightly further down TFA:
> Krishna’s strategy has been focused on bolstering the company’s offerings in hybrid cloud — providing services to customers that run their own data centers in some combination with public cloud
i.e. making it easier to move between data centers and cloud, and back again, so if "companies are taking a look at how much they are spending on cloud." then sounds like IBM are skating towards where the puck is going.
You don't need to be #1 in every category. Having even a 4th place presence can become a 1st place presence if bundled correctly (eg. with IBM Security's managed security portfolio and IBM's professional services team - this gives a much more hand held experience than AWS or GCP, and better for those orgs that are Linux/Unix heavy because Azure won't fit their needs as well from a PS standpoint)
Given their existing relationships they can leverage and the romanticism finally bleeding out of FAANG's reputations, if they can put together a stable, fundamentally capable platform they could definitely grab a chunk.
Toyota has made a multi-decade business model around "skating to where the puck has been". Why can't IBM?
> Given their existing relationships they can leverage and the romanticism finally bleeding out of FAANG's reputations, if they can put together a stable, fundamentally capable platform they could definitely grab a chunk.
IBM has failed to build a reasonable cloud platform, and not for lack of trying -- for over a decade at this point -- through both internal work and acquisition. Create a cloud.ibm.com account and poke around.
> Toyota has made a multi-decade business model around "skating to where the puck has been". Why can't IBM?
They can, but I'm not sure what you mean by Toyota... they were early on hybrids in general and are definitely the leader in the plug-in hybrid space... what competes with the RAV4 or Prius plugins if you need ICE car range on the weekends and electric for your short commute?
Having never used IBM cloud I have no idea. Just saying it's a possibility. Also just because it sucks doesn't mean businesses won't buy it and force their developers to use it, sadly.
As for Toyota, hybrids were basically their last big innovation. And their plug-in hybrids are iterations on their regular hybrids, not new ground-up designs. Since the late 90s they've been continually behind the curve by intent. Their engines/transmissions/infotainment/interior design is all at least 5 years behind the competition, as are their EVs. They've taken a stance that refinement is more important than bleeding edge innovation, and a good chunk of the market seems to agree (my family included, we drive two Toyotas). The hydrogen stuff is just noise.
Regulatory stuff doesn't really impact Big Tech's Cloud presence. I've been working closely on JWCC related RFPs and the big boys at the DoD are 100% going to push back significantly if AWS or GCP are even slightly inconvenienced. There's an internal recognition with the DoD and DHS that antitrust in the Cloud Platform Security space could lead to national security issues due to turf battles and mismanaged divestments.
And people on the Hill trying to make their mark are concentrating more on the Ad Business and Marketplace portions - those are easier wins for consumers and (more critically) small mom and pop businesses that love to participate in local politics.
In the early 1980s, DoD pushed back vigorously against the breakup of the Bell System, but the breakup happened anyway. Once the anti-trust suit is in progress, they have little influence over the legal outcome.
> IBM’s current headcount is 260,000, Kavanaugh said. That is about 22,000 lower than the figure disclosed for December 2021.
4000 seems like a tiny number in context of total headcount, and when you take into account that they've somehow lost more than 5 times as many in the past year.
> The cuts will focus on workers remaining after spinoffs of the Kyndryl and Watson Health units
So the already dead parts of the company? It's almost like they're doing layoffs for the sake of appearances; they aren't really changing anything.
> It's almost like they're doing layoffs for the sake of appearances
It's almost like you're noticing this because the media is playing up layoff reports in tech.
To quote... you - "4000 seems like a tiny number in context of total headcount, and when you take into account that they've somehow lost more than 5 times as many in the past year."
They've reduced staff by 5 times this amount over the last 24 months, but this is the reduction that you think is for the sake of appearances... I wonder if that's because this is the one getting media attention...?
Another way to think about this is that IBM may be the ones playing up this comparatively-tiny reduction in headcount, because they expect to be rewarded for it (share price up). They would have seen the opposite effect from publicizing the cuts of '22, so they did the cuts but didnt talk about it.
This is a weird take. Are you arguing that we aren't seeing an abnormally high number of layoffs in tech? That this is just "media sensationalism"?
Nearly all the layoff reports I've come across I hear about before they're in the mainstream media. Additionally I predicted months ago that we'd be seeing massive layoffs in tech, before the media was talking about it at all.
These layoffs are real, are atypical for what we've seen the past decade, and are impacting a large number of real devs.
Honestly I haven't even seen the media talking about it until the last few weeks. When I talked about impending tech layoffs back in Oct-Nov nobody outside of the tech community had any idea that there were any issues facing tech.
I hardly see how layoffs are being "played up" rather than just being reported.
If you look at most of the headcounts from companies doing layoffs - you'll see that they're still sitting around the 2021 numbers after accounting for the cuts.
So basically - we had a large glut of hiring during covid in tech as demand was high for those products and services (being in lockdown certainly helped) and now we're seeing a relatively minor adjustment back down.
Given the increased interest rates and the slump in demand - I think we're actually still well on the light side of the possible wave of layoffs.
I think the reporting is still in line with the gloom and doom headlines that attract attention. Basically - they're reporting much more on the tech layoffs because it garners views.
The increase in tech hiring was just as hard - and while it did get media attention, it was not nearly as intense and recurrent.
Ooo, this sounds like a nice recipe for company collapse. You hate to see giants who advanced computing get taken over by MBAs who play that "cost center" and "revenue center" bullshit. I'm sure all their enterprise customers will be understanding of the unfixed bugs when the service agent explains how they made Watson 0.03% more effective at capturing pet names this fiscal year
I'm a developer at IBM for one of their enterprise OSs. The lack of funding in retaining and finding talent is slowly killing an already anemic product. The amount of institutional knowledge that has disappeared over the past decade gives me little hope in it ever recovering. More and more bugs are being marked as 'permanent restriction' as there isn't enough time nor experienced developers to fix them anymore. My department is basically surviving on legacy contracts and customers too scared or lazy to migrate to a modern Linux or Windows infrastructure.
In terms of developer credibility with the entrepreneurial community? Sure.
In terms of being a going concern for large customers and investors? The make billions of dollars of profit per year, have a P/E valuation better than Apple's, and pay out 4-5% dividends annually.
I'm not sure what it really means to "be dead" for 40 years. In a sense, the average human is "dead" for 70-something years. But periods of time at that scale are called "life", lol.
IBM will be here long after everyone reading this is gone. They aren't relevant to the environments in which most of us work (they're basically a professional services consulting firm), but we aren't everything.
Their net income has declined precipitously from $15B per year to $5B per year, and profit margins from 15% to below 10%, in a timeframe when its (former) competitors grew by leaps and bounds.
>The make billions of dollars of profit per year, have a P/E valuation better than Apple's, and pay out 4-5% dividends annually.
For a shareholder, this is little solace when their return compared to the market (a basically risk free rate of return) is negative. 0.64% for the last 10 years, 5.93% for the last 20. SP500 is at 12.4% and 9.8% for the same timeframe, per dqdyj.com total return calculator.
"Be dead" usually means having a low P/E and little REAL stock price appreciation (that comes with low P/E and high dividends).
IBMs stock price was $100 in the 2000s. It's only $133 now. If it adjusted for inflation - that would be $173 today. You lost about 25% in real depreciation to get about ~3% per year yield in dividends (taxed as income $$$).
You can do better with Treasuries.
So why take the risk on Big Blue?
Not uncommon for someone to describe a company like this as "dead" - even if it is, presumably, providing some economic value.
Dead as personal computing company, AI products - bad, blockchain - garbage. It exist as a consulting firm that engages in what I would call shady practises. Everytime I see an article about government contract and IBM it is always portraits IBM in very negative light. So yes, billions of profits which is basically siphoning public tax money to shareholders (well Accenture and Deloitte are not better).
This only shows that financial engineering works. Paying dividends and buying back shares while taking on billions of debt to finance it isn't a good long-term strategy.
IBM of today is way past a company that advanced computing. It is a body shop and an American company in name only. Most of their revenue comes from GBS which is basically an offshoring division.
uhhh... IBM is a bank masquerading as a technology company and has been since the 1960s when they started getting real fancy with financing. MBAs have been running things at IBM for at least that long if not longer.
I think the notable thing here is; this is really a Redhat layoff since IBM "subsumed" or reverse merged or whatever it was with Redhat. My take is that IBM has been a barely warm carcass for > 20 years already and the Redhat deal did nothing to change that. Here I'm certain that the layoff will be onshore, and the continued hiring will be offshore. That's what they've been doing forever, and their lack of growth and innovation continue to reflect it.
I'm no longer there, but I was at Red Hat for three years and change after the acquisition by IBM was first announced. At least through my time there, this couldn't be further from the truth. Red Hat was operated at a completely independent company. I wasn't even allowed to promote IBM products and services because we didn't want to show favoritism over other partners.
IBM has been mismanaged for the past 20 years yet live off legacy products and licensing to keep $$ rolling in. I spent 6 years working for them on the consulting side and it was by far the worst job I'd ever had because management is just terrible. Crippled at every level from incompetence to poor deals being accepted, it's a losing battle career wise. They will target everybody with high pay and any performance issue ever in their past to get rid of people when it's that time. I'd have all kind of conversations with distinguished engineers who gave you some hope that some smart people existed in the company, but it's nothing more than survivor island. They love to buy companies or take over a large companies organization, document it all and outsource all of it. The sales people are really good at finding ways to get new business by overpromising the world to keep them relevant while in the end losing $$.
> (IBM) delivered an upbeat annual sales forecast while announcing it would eliminate about 1.5% of its global workforce
> The cuts will focus on workers remaining after spinoffs of the Kyndryl and Watson Health units and will cost the company about $300 million, he said. IBM still expects to hire in the “higher-growth areas,” Kavanaugh said.
> Chief Executive Arvind Krishna has been trying to pivot Big Blue from its traditional business of infrastructure and information technology services to the fast-growing cloud-computing market.
Can't help but see all the layoffs as part of a "great refocusing", even with positive news for the company, you can use the fact that everyone is doing layoffs to reorient things. If everyone wasn't doing layoffs, people would worry about the company, and the news wouldn't be buried. Layoffs are just the tool companies suddenly have available to do this with (seemingly) no consequences to them
IBM would do these layoffs regardless. The whole "everyone else is doing it" is just convenient timing. IBM has lots of dead areas / legacy software & typically those areas are the ones hit hardest.
Do people know if IBM Quantum is one of those `higher growth` areas? Asking for a friend who is worried about getting laid off from the Microsoft Azure Quantum team.
costco still uses IBM products.. DB2 ... spufi anyone? I believe some companies like Gap are still using them as point-of-sale as well. It seems IBM has too many employees for the things they do.. I expect more cuts.
Don't they just shuffle workers around? I understand if the positions are highly incompatible (marketing staff probably can't transition to OS development), but it the jobs are somewhat similar...
They have 260k employees, for what?