Comment by ethbro
7 years ago
IBM the company is like an iceberg.
The R&D and open source contributions are the tip. And the other 90% is services revenue.
And most people's experience with IBM services isn't positive.
7 years ago
IBM the company is like an iceberg.
The R&D and open source contributions are the tip. And the other 90% is services revenue.
And most people's experience with IBM services isn't positive.
IBM is, as far a I can tell, the best example of a "mixed bag" in tech. I have heard both great and terrible things about IBM from customers, employees, developers on Open Source projects, etc. They are a huge organization, and one that seems more divided than many.
It may be more useful to view IBM as a collection of fiefdoms rather than a single, focused, entity. Yes, the money all goes into one pot at the end of the day, but there's large variance across organizations within IBM.
That said, from what I can tell OSS that goes into the IBM machine doesn't usually come out the other side improved. I worry for the health of CentOS/RHEL/Fedora under IBM's leadership. My desktop and server OS of choice, with a few brief forays into other territories along the way, has been from Red Hat for 23 years. I'd hate to lose Fedora or CentOS, or see them stagnate. Red Hat has been among the most steadfast in their support of Open Source software, as well...so, there's a real risk of the kernel, Gnome, and other OSS core infrastructure suffering, because Red Hat is a major contributor to those projects.
I don't think it'll be sudden. It usually takes years for projects to become clearly worse for having come under IBM's purview. Red Hat is large itself, and will probably take years to be fully assimilated and homogenized into IBM's lukewarm culture of mere competence with regard to their Open Source contributions.
On acquisitions, I can offer the anecdote of a friend working at a startup IBM purchased.
Things started with "IBM loves you, and pledges to stay hands off and help you do what you're already doing", continued to "We're going to replace a few management positions with folks from IBM" and "We're changing some benefits, titles, and procedures to better align with The IBM Way", and finally ended up with "You aren't meeting your sales targets, so we're going to overhaul your leadership."
Admittedly, this was a much smaller company than Red Hat. But they were profitable before being bought and had a respected product and growth.
That sounds about right. And, I suspect it'll happen to Red Hat, too, despite the fact that Red Hat is a money printing machine. They've been literally unbelievably effective at turning open source into profit (as someone who's tried to make money on building Open Source software for roughly 20 years, I find it difficult to comprehend how much money Red Hat makes). I've even occasionally considered applying at Red Hat a few times over the years (and have on a couple of occasions been encouraged to do so by people within Red Hat), just to get a direct view of how they do it.
But, IBM is a different beast. They make a lot of money on Open Source, too, but they're not a software company. It's ancillary to their core competency, and so when software goes in, it seems to eventually become a meandering bloated and bulbous creature without a clear purpose or direction, and most of the really smart people seem to leave within a year or two.
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Isn't it how pretty much any acquisition goes? That's my experience from the inside anyway. All hell breaks loose once the golden handcuffs have expired (3 years mark usually?) and people including management can quit with a full payout.
That lines up very closely with the experience of some friends who sold their (growing rapidly, highly profitable) startup to IBM.
It took a few months for them to realise their startup was going to languish completely within IBM, and their destiny for the 2 years after acquisition was to sit by quietly and wait for their payout, while looking for the next thing to do.
Any time & effort they put into trying to grow their startup product's future within IBM was going to be a waste of everyone's time. This was a hard lesson for them to learn post-acquisition, but I think the money in their bank accounts 2 years down the track will help them get over it
I really don't understand the point of this anecdote.
This is standard practice for almost every acquisition. If the startup didn't want to be part of the IBM way of doing things they shouldn't have agreed to be acquired by IBM.
In fact the rare situation was the Facebook "acquire but treat more like an independent subsidiary" model. And even that didn't last all that long.
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We used to be a huge SoftLayer customer. Then they got bought by IBM and service/pricing/network/everything got worse. Then we left.
IBM sucks.
Yeah, we moved out of SoftLayer soon after that acquisition, as well. They just weren't as interested in the kind of (small) money we spend and it showed.
We were a Softlayer customer for dedicated servers before the acquisition. Afterwards, we needed to add additional servers, and IBM wanted 50% more for the same config, already quite high (twice as much as we pay elsewhere). When we needed to increase the RAM from 16GB to 32GB, they wanted $50/month for a stick of RAM that costs about $100.
It's like they are using cloud pricing as a reference for dedicated servers. We run dozens of dedicated servers, and using the cloud would be 10x the cost. Amazon at least has a culture of passing on cost savings to customers.
There was a problem with a server, and I needed to connect to the console. That involved using a VPN, then downloading a Java applet with a very specific (obsolete) version of Java. The applet didn't support copy and paste, and frequently repeated keys. Try typing in a 16 digit randomly generated root password by hand with your keyboard duplicating keypresses. Linode can offer a console over SSH, why not IBM?
Screw IBM.
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IBMs revenue comes from consulting but a lot of their profit comes from software https://news.ycombinator.com/item?id=18322772 with a bit more context on how I view this deal.
Is "Cognitive Solutions" mainly their AI efforts? [1] If that's the case, and given the terrible feedback they've received from many of their Watson customers (and anecdotes from people working on it)... I am tempted to say that the future is bleak for IBM, and that people will ultimately discover that they were paying a fortune for something that does not match what's advertised (they've put millions into advertising Watson with nonsensical ads)...
...but then again, many enterprise solutions that are incredibly over-engineered, slow and costly are still alive and kicking, so who knows.
[1] https://www.ibm.com/watson/advantage-reports/getting-started...
Cognitive Solutions is nominally their AI solutions but actually includes a lot of legacy enterprise stuff put in that basket to make the numbers look better. Wall Street analysts don't dig enough to publicize any of this fiddling.
Software income is because those fine consultants pushed the IBM Solution on unsuspecting customers.
I worked for IBM in the early '90s and again in the early 2000s, on a number of high visibility projects.
None of them shipped.
IBM sucks, and this is the worst news I've heard in a very long time.
Their iSeries service isn’t bad as soon as you get by the screening person whose grasp of English leaves a lot to be desired. Talking to one of their actual techs has solved everything I’ve asked. It does probably help that machine phones home when it needs parts replaced.
I don't have any contacts with IBM business-wise, so my question might sound naive: Why 90% services revenue would be a problem? They have to fund these R&D and open source contributions somehow.
Because literally every conversation turns into a services upsell.
I've migrated a site from WAS to JBoss. The support experience is night and day. WAS on IBM OS on IBM hardware not working? Pay a four-figure-per-day consult to be told that's just how WAS works on that platform, buy more hardware.
Same application on JBoss, problems with performance, RH dropped experts in as part of the support contract.
This is not a one-off in my experience. RH, Microsoft, other vendors I deal with treat a lot of these things as covered by your enterprise support contracts. IBM treat it as a chance to upsell a services engagement, and maybe pitch that the work should be outsourced, too.
As RedHat's software is open source, isn't it possible to buy the same services from other companies?
I was under the impression that OP objected to their revenue being 90% from services regardless, that's why I commented.
Presumably due to what GP says in the next sentence:
> And most people's experience with IBM services isn't positive.
It's been quite clear that their IT service shift was sad. The rest is still pretty pretty.
> most people's experience with IBM isn't positive.
That does not reflect my or my friends experience. Once one gets beyond the local representatives, service for me always was exceptional.
Maybe for hardware. There are pretty good about hardware support. At two companies I worked at we got people sent to us for on-site repair.
Their software support is something else. I haven't had to use IBM tooling in a while, but back when I did, everything they sold was absolutely fucking terrible (DB2, RAD, WebSphere, Clear Case, Tivoli) compared to many open source equivalents.
The only reason people buy this rubbish is because they're in an old company (bank, insurance, etc.) that has relied on it for ages and don't care about the inefficiency or cost.
> Their software support is something else. I haven't had to use IBM tooling in a while, but back when I did, everything they sold was absolutely fucking terrible (DB2, RAD, WebSphere, Clear Case, Tivoli) compared to many open source equivalents.
Over 20 years in contracting that's been my experience too, utterly lazy, awful software - awful UI, continuous license issues, buggy, juggernauts of bloat. WSAD (Eclipse + Websphere plugins) was easily my worst experience with an IDE, ClearCase easily my worst experience with a SCCS etc. I pity people that have to work with any of it 9-5.
The banks and insurance companies I've worked at had support contracts, but they were useless - you more often than not just had to suck it up.
yup- Onsite repair technicians are no problem when you company is paying $500K a year to support it.
He's talking about IBM global services. If you had an exceptional experience with an IT department outsourced to IGS you'd be the first.
To be fair, there are AAA teams even in global services. I believe I worked with some guys from the Hong Kong team that were !@#$ing amazing? But they were supporting a major bank.
IBM in general seems fairly aware of who their best teams are, and you're probably not going to get one of those teams. (Unless you're a huge account and/or the project is in dire straits)