IBM Coming In Behind H-P On Server Market Share Disturbing And Could Be Bad News For Investors.

Anura Guruge, June 8, 2013.

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Anura Guruge


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About 5 or 6 years ago when I first heard that HP had overtaken IBM in terms of annual revenue I was perturbed and shocked. Just seems incongruous. In terms of the depth of product range, software offerings and customer presence IBM always appears to be head-and-shoulders above HP.

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Click to access ‘Investor Business Daily’ coverage …

Then yesterday I happened to see on MarketWatch, that I pull up a few times a day to check headlines, that HP has now overtaken IBM in server sales! That was shocking. It is also very disturbing. I have not owned IBM stock in decades. IF I was an IBM investor I would now be very worried — to the point of dumping all my shares at once.

I am here talking as one who spent 20 years as an ‘IBM Watcher’ with a pretty impressive record of getting it right when it comes to IBM. Here, check out some of these, especially my old newspaper columns, here.

IBM, once again, appears to be going walkabouts — off the beaten track.

IBM is back to claiming that it is going to focus on software, services and ‘the cloud’ rather than on hardware.

Some of us have heard this all before. How many of YOU remember ‘SAA‘? Systems Application Architecture.

I can also mention ‘grid computing‘ and ‘autonomic computing‘.

IBM’s latest push with Cloud reminds me, alas, of the BILLIONS it spent — no squandered — on ATM, and here we are talking about ‘Asynchronous Transfer Mode‘.

Nways. Nbloodyways. What a joke? What a scandal? What downright incompetence?

Nbloodyways Switches (developed in Lagaude, France), which didn’t ‘compute’, was what precipitated IBM’s decline and then exit from networking. At one time had 70% of the corporate networking market and then within a decade was forced to abdicate to the likes of Cisco, HP, Juniper etc.

I still have one of the black IBM 2220 Nways Broadband Switch penknives. I am sure it is a collectible by now. I think we were supposed to slit our wrists with it.

My fear, I see Nbloodyways writ large all over IBM’s cloud talks.

IBM is best with tangible, clearly definable things with Nbloodyways Switches, alas, but an exception.

As soon as it start dabbling in mushy stuff like the cloud it goes off the beaten path.

Yes, I am concerned. I am not an investor but I have a vested interest in IBM. Even when I would rant and rave about IBM screwing up, and I did that often, quite rightly, when they were going off the rails and out=of-the-business in networking, I would still claim that when cut I bled blue. The folks at Cisco used to laugh about that IBM. That deep down whatever IBM’s faults I will always be an IBMer.