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Clement · (This post was last modified: 19-10-2013, 03:33 PM by Clement.)

(19-10-2013, 03:08 PM)freedom Wrote: A few things impact the top line for IBM. New technology trends are emerging such as Mobile, Cloud, Social and Big Data. These new trends will impact spending on IT because the enterprises can't make up their minds yet about what to do with these emerging trends. But thinking longer term, Enterprises have to spend their money on technology to improve productivity and profit. The spending is delayed, not eliminated. Secondly, large enterprises spend quite some money during the crisis. They don't spend like consumers, buying a new smartphone every year or two years.

However, the good thing about enterprises is that they are sticky and they don't change overnight unlike consumer technology. Large enterprises don't anyhow change vendors. It's very costly. And IBM has a great brand. There is a saying that "No one got fired for choosing IBM". Plus, who really can compete with IBM in IT services? HP? SAP? Oracle? Microsoft? Yes, they all compete with IBM, but none has the depth or breath of IBM. So all only point to a better future for IBM.

Cost and headcount cutting is unavoidable in IBM's case. The company has changed its business strategies one or two decades ago. IBM is just trying its best to smooth the cut. The future of IBM will be a lean and very profitable enterprise.

Hardware and software are commodities. Service is where the money is. Is there a huge difference between some IBM server or HP servers or Dell Servers? Not so much. They all base on Intel server chips. The architecture is similar and the part vendors are just the few. They are mostly assembled in China or Asia. Software? IBM's software is normally not the best. Oracle has better database and PeopleSoft. Microsoft has a lot of good enterprise software which IBM does not have similar ones. SAP has SAP. IBM is a large customer of all the above mentioned software companies. Plus, software is just software only. Most of the time, they are useless without good user cases. That's where IBM comes in and take the profit, by bridging the software and the enterprise requirements.

1) I agree with you on the trends in technology, I am just not sure that IBM will be the main beneficiary of these trends. 2) I agree that cost cutting is inevitable, just want to highlight some other risks faced by "right sizing" 3) Agree with you on hardware but not software. I think having market leading database software creates a lot of opportunities for cross selling. Software is also the primary area with high switching costs.

freedom · 19-10-2013, 03:45 PM

If not IBM, who do you think is the main beneficiary of the emerging new trends? I can't think a better company than IBM for enterprise business.

You have to recognize a new trend. Software as a service. Why should I, as a customer, care which database the IT system is deployed on? I, as a customer, only care about a right database system is implemented and properly supported and maintained. I don't care whether it is Oracle, DB 2 or MSSQL.

Clement · 19-10-2013, 03:51 PM

Personally, I prefer oracle, database leadership and the company is still growing although slowly.

freedom · (This post was last modified: 19-10-2013, 04:07 PM by freedom.)

(19-10-2013, 03:51 PM)Clement Wrote: Personally, I prefer oracle, database leadership and the company is still growing although slowly.

for me, it is simple. I will leave the IT decision to my IT vendor, in this case, probably IBM. I will focus what I do best, my own business.

I believe this is a trend that Oracle will probably lose its competitive advantages together with Cloud.

Oracle, in my opinion, will be the one lost the most in the new technology era. Database needs reduce and Cloud software are eating PeopleSoft's lunch.

Clement · 19-10-2013, 04:54 PM

Well, that is not what we're seeing so far if we use top line growth as a proxy for demand of it's products and services. I think oracle is more nimble, with a dictatorial CEO compared to the leadership over at ibm.

sgd · 19-10-2013, 07:26 PM

(19-10-2013, 03:51 PM)Clement Wrote: Personally, I prefer oracle, database leadership and the company is still growing although slowly.

I also second that. Today all medium to big businesses that uses IT need to use some kind of database and Oracle is the Premier in this market their claim is 50% of global market share which they are the leader not even Microsoft can make such claims.

One of my biggest regrets was not buying this cheap during sept 11 market crash.

Drizzt · (This post was last modified: 19-10-2013, 07:29 PM by Drizzt.)

Much to soak in and the key to why Buffett buy is that perhaps they are starting to see that this is a service /solutioning company rather than a tech company. I agree with freedom that you might want to do the high revenue low margin commodity hardware.

The mindshare disconnect is that IBM does not have a popular software unlike MSFT, GOOG, Salesforce, Oracle that is defining and familiar to people.

If i am right in my thinking, their main customers are the institutions writing their own enterprise applications, forming their own private cloud, the things that MSFT, GOOG, Salesforce needs at the backend to power their front cloud.

To that their acquisitions targets tend not to be things that we understand outright.

The problem here is that GOOG and FB are leading the trend of developing their own backend tools to support their needs. Question to ask is that is this a trend or is this only possible due to the muscle of these mega IT companies.

buying back shares is a sensible thing to do, more so if your earnigns are stagnating and not keeping up. Its capital deployment. we can look at it as financial engineering but thats probably better than to return as dividends.

Oracle and HP looks to play in this space as IBM, its getting more crowded. do we see a clear edge for IBM?

(19-10-2013, 07:26 PM)sgd Wrote:
(19-10-2013, 03:51 PM)Clement Wrote: Personally, I prefer oracle, database leadership and the company is still growing although slowly.

I also second that. Today all medium to big businesses that uses IT need to use some kind of database and Oracle is the Premier in this market their claim is 50% of global market share which they are the leader not even Microsoft can make such claims.

One of my biggest regrets was not buying this cheap during sept 11 market crash.

the last i read is that the change in how their license work to a subscription basis may adversely impact how much they could charge if they moved to this model. but i read this some time ago. not sure if they have moved past this problem

freedom · (This post was last modified: 19-10-2013, 07:36 PM by freedom.)

The main competency of IBM is its vast human capital accumulated over the few decades. If I am not wrong, IBM is a huge customer of Oracle. A lot of companies hire IBM to integrate with PeopleSoft or Oracle database, not Oracle itself. The same can be said for SAP. IBM probably has more market share in deployment of SAP than SAP itself.

Yes, Oracle had a great database. The market is shrinking, not growing. Plus, DB2 and MSSQL is catching up. There is not a significant difference among all these databases, just the cost of switching is high.

Ask around about enterprise service.

sgd · (This post was last modified: 19-10-2013, 08:07 PM by sgd.)

(19-10-2013, 07:26 PM)Drizzt Wrote: Oracle and HP looks to play in this space as IBM, its getting more crowded. do we see a clear edge for IBM?

You have mssql you can only run on windows. You have DB2 only can run on ibm built operating system. Oracle databases runs on 97% of all known operating systems and can integrate with almost all known business application today.

tell me where is the fight and where is the disadvantage.

(not vested in oracle regretfully)

freedom · 19-10-2013, 08:32 PM

DB2 can only run on IBM built operating system, is that a joke?

DB2 can run on Windows/AIX/Unix/Linux, etc...

Which planet do you live in?

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