This is so fascinating to me. I mean how IBM keeps taking over other companies, but they consistently deliver low quality/bottom-tier services and products. Why do they keep doing the same thing again and again? How are they generating actual revenue this way?
Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic are doing, with in-house tools? They have a mature PowerPC (Power9+? now?)setup, lots of talent to make ML/LLMs work and lots of existing investment in datacenters and getting GPU-intense workloads going.
I don't disagree that this acquisition is good strategy, I'm just fascinated (Schadenfreude?) to witness the demise of confluent now. I think economists should study this, it might help avert larger problems.
Watson was a marketing exercise designed to sell a bunch of disconnected text and image processing libraries pulled together by consulting services. It did not function as advertised.
At one point we worked with a large energy company that was basically sold something LLM-like (large-scale indexing and searching/querying of documents) in 2016 or so. IBM had a team of 90 people doing full-time data ingestion for something like 26,000 documents. We got asked to do a counter-product in two weeks, which was literally just a TF-IDF search and some smarts around ingesting different types of documents. Both solutions performed approximately equally, except one cost something in the order of $185m and one cost $40k. Watson continued running for about a year until an external data science contractor realised they could query Watson for highly confidential board meeting notes, and it would provide full previews into the documents. The project was shuttered shortly after.
Yep, and I think they've already used the Watson brand for a good bunch of different technologies, and most if them have been retired for lack of success. In fact, seems like a couple weeks ago they've sold a good chunk of Watson Healthcare to private equity [0]. Edit: When I talk about the lack of success, I talk not only about market success, but the usefulness of the product.
Until 3/4 years go I was in healthcare for 15 years, a good bunch of them being partners with IBM in radiology imaging solutions. I've been in their IBM La Gaude (former) research/presentations lab a couple times and I've seen a lot of their Watson product come and go, without much success. I have to say that I've seen a couple that were very interesting, but were mostly statistical, with no AI/LLM/... involvement.
And don't talk me about Softlayer/Bluemix. Or their private cloud racks that I cannot even remember their name...
> Watson was a marketing exercise designed to sell a bunch of disconnected text and image processing libraries pulled together by consulting services. It did not function as advertised.
Okay, but why can't IBM enter the LLM business reviving the Watson brand?
Why in the world would economists need to study this? It's been known that large bureaucracies have been dysfunctional for over a couple of decades now if not centuries. The large reason is because 1) the incentives to do great work are not there (most of the credit for a huge company's success goes to the CEO who gets 100X the salary of a regular worker while delivering usually pretty much nothing) 2) politics usually plays a huge role which gives a huge advantage to your competition (i.e. your competition needs to spend less time on politics and more time on the actual product) and 3) human beings don't functionally work well in groups larger than 100-250 due to the overwhelming complexity of the communication needed in order to make this type of structure work. Incentives though I think are the primary driver - most people at companies like IBM don't have any incentives to actually care about the product they produce and that's the secret behind the ruin of almost every large company.
Edit: you also seem to be giving too much credence to Watson. Watson was actually mostly a marketing tool designed to win in Jeopardy and nothing else. It was constructed specifically to compete in that use-case and was nowhere near to the architecture of a general transformer which is capable of figuring out meta-patterns within language and structurally understanding language. You can read about Watson's design and architecture here if you're curious: https://www.cs.cornell.edu/courses/cs4740/2011sp/papers/AIMa...
More like we need psychologists to ask "why are companies still working with IBM's efficiencies 30 years after its peak?" The workers don't have to care but the businesses dealing with IBM should.
> most of the credit for a huge company's success goes to the CEO who gets 100X the salary of a regular worker while delivering usually pretty much nothing
Well, in Confluent's case I'm not so sure that's true given that their CEO is also the company founder as well as one of the original authors of Apache Kafka.
Everything will make sense when you realize that IBM is a consulting company. They don't care about building great products. In fact building self-serve products will directly take away from their consulting revenue. They instead need to be good at marketing and selling their services. Watson was exactly that - a marketing demo that got them in the news cycle and helped them sell a giant wave of contracts under a single brand to unsuspecting CIOs of legacy non-tech companies. Every acquisition helps with this goal. Red Hat - locking companies into licenses and support contracts for the OS. HashiCorp & Confluent - locking companies into support contracts for their cloud infra.
>> Ok, so does anyone remember 'Watson'? [...] Why didn't they compete with OpenAI like Google and Anthropic are doing, with in-house tools?
> Everything will make sense when you realize that IBM is a consulting company.
This and.
The 'and' being that consulting companies, in their DNA, build solutions for their customers.
Which is a very different business than building products for all users.
Not least because the former is guided by understanding a customer's requirements, while the later is having a strong intuition (backed up by market fit) about what all users want.
I'm pretty sure there might not be a full end user capable (in the sense of design-build-iterate) product team in IBM at this point.
Mostly because I don't think they've any middle/upper management that can think that way. They've got the engineers!
The service part you are likely referring to is now Kyldryl, a separate company. IBM now focus on software and cloud. There are still services but are much less prominent.
> they consistently deliver low quality/bottom-tier services and products
I worked with IBMers. The main priority for a lot of them is to ensure continuous employment for themselves and their buddies. They'd add unnecessary complexity to a product to stretch out the development for another couple of years. And they work at leisure pace for tech. Actual 9 to 5, many coffee breaks. They can't compete.
I worked with IBM several decades ago for a customer project, and the solution suggested by an IBM'er for backing up a NoSQL database (Lotus Notes) on a daily basis was to translate and migrate the data to a relational one (DB2), then use a DB2 tape backup system to back it up.
When I pointed out that this was a stupid way to do it, they openly told me that they just wanted to sell DB2.
I do advisory for pre-Series A startups as a last ditch effort to save them.
I do not get the unified industry delusion about "why X company has a bad product". It is usually either one of two things: comfort or ego. Everyone knows that but do not want to say it out loud.
I have seen these happen time and time again. Companies that are cash cow, do not care to do a better job. There is no incentive to do a better job. Moreover, the recurring thing is that if I did something different, I wouldn't have been this much successful in the first place.
The rest of the smart consultants walk on eggshells. They hint at stuff but never want to bite the hand that feeds them because the clients would rather fire you than be challenged.
It is not an IBM thing; it's generic business thing to some degree. I really have to call this a delusion. Good consultants submit generic reports that just tell them what they want to hear. It is not you; it is the economy. Stupid consultants that are well-meaning tell them they should be the best on competitor intel. Do you not think some stupid person did not approach IBM to do what Oracle or AWS is doing? Of course, they did, and they were fired immediately.
The best consultants are less of a consultant and more of a therapist.
After doing only four-month projects for the entire year, this year's realization was that nobody in the industry wants to do better. Everyone is in their place because of ego or a perceived sense of success. Or because of a grand conspiracy theory. IBM has a significant number of government contracts, so they are set for life because the vast majority government IT systems are pigeonholed into IBM systems. The acquisition is to tell the shareholders that we are so successful that we can literally buy companies. We do not even care to do things. Whatever the new thing is, we will buy it at some point.
I'll say this about IBM: because it's so old, it was the most diverse company I ever worked for- including age, nationality, race, sex, and any other category you can think of. Basically you had all types of people in all stages of life, not just young white workaholic tech-bros. The founders are long gone, so everyone there (including CEO) is a professional- meaning nobody has any kind of personal attachment to the company. We were all in the same boat, as it were. When your older coworker suddenly disappears due to a stroke, it puts things in perspective.
The fast-paced startup is really the hack, combining the energy of youth with the ego-mania of their founders. Ask yourself, is it healthy?
Anyway, IBM's customers tend to be other fortune 100s and governments- basically other similar organizations, and my experience was that we took care of them pretty well. The products were not pretty (no Steve Jobs-like person to enforce beauty), and rather complex due to all the enterprise requirements. But they were quite high quality, particularly the hardware.
> Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house
I do. I remember going to a chat once where they wanted to get people on-board in using it.
It was 90 minutes of hot air.
They "showed" how Watson worked and how to implement things, and I think every single person in the room knew they were full of it. Imagine we were all engineers and there were no questions at the end.
Comparing Watson to LLMs is like comparing a rock to an AIM-9 Sidewinder.
Watson was nothing like ChatGPT. The first iteration was a system specifically built to play Jeopardy. It did some neat stuff with NLP and information retrieval, but it was all still last generation AI/ML technology. It then evolved into a brand that IBM used to sell its consulting services. The product itself was a massive failure because it had no real applications and was too weak as a general purpose chat bot.
>Why do they keep doing the same thing again and again? How are they generating actual revenue this way?
IBM has a ton of Enterprise software, backed by a bunch of consultants hiding in boring businesses/governments.
They also do a ton of outsourcing work where they will be big enterprise IT support desk and various other functions. In fact, that side has gotten so big, IBM now has more employees in India in then any other country.
Your fascination seems hinged on the fact that IBM has "lots of talent to make ML/LLMs work" which judging by what they've put out so far and talk publicly about, is very far from the truth. Anyone who has a clue seems to (rightly) have left IBM decades ago, and left are business people who think "Managed to increase margin by 0.1%" is something to celebrate.
It’s a shame because people forget how good IBM research was back in the day. I do wonder if they still have great people in those r&d labs, or if they all left.
To be a bit more candid, they have lots of employees outside of the US (particularly in India). and both in the US and elsewhere, people need to eat. They may not have the talent to innovate new tech like OpenAI and others, or do cutting-edge R&D, but they certainly have the talent to take LLM breakthroughs and adapt. They could have competed with many of the B-Tier LLM services out there with the right leadership.
> Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic are doing, with in-house tools?
Leadership in IBM also thought that Watson was like what what OAI/Anthropic/Google are doing now. It wasn't. Watson was essentially a ML pipeline over-optimized on Jeopardy, which is why it failed in literally every other domain.
Sure, but they were doing that stuff. They had ML people, infrastructure, marketing, branding,etc... already. Their product sucked, but they could have copy-catted OpenAI in 2022+ like everyone else.
They gave up on watson about 18 months before llm's popped up, and they have simply just not got enough cash on hand to compete. While the big boys grew fantastically bigger over the past 15 years as cloud happened ibm fumbled time after time and shrank ever smaller, and is now desperately hoping it can stay relevant. but in the end they just haven't got the resources to compete on that stage anymore.
The recent interview with Arvind had the “grapes are too green, anyway” energy. They missed the train because they were licking their Watson wounds. Then sorta regretted it but it’s too late.
Same thing happened with their cloud offering. They laughed at AWS, then tried to catch up, then missed and pivoted to “hybrid” (cloud and local).
I’m pretty convinced there is a bell curve of “understanding what IBM does” where idiots and geniuses both have absolutely no idea.
It really is probably that strangest company in tech which you think could be mysterious and intriguing. But no one cares. It’s like no one wants to look behind the boring suit and see wtf. From my low point on that bell curve I can’t see how they are even solvent.
There are entire niches of us that make a living (not at IBM) making certain IBM products actually do what they're supposed to. From my vantage point I see essentially zero maintenance going on with their products. I sincerely don't understand the market (why do people keep paying hundreds of thousands to millions of dollars for non-existent support?) - but whatever.
To add to that i think their R&D labs along with HPE were one of the few to innovate on the memristor and actually build some fascinating concept machines.If i rememeber HPE's was 'The Machine'.
Athough i think they just di/dont know how to adapt these to market that isnt a enterprise behemoth , rather than develop/price it so more devs can take a hold and experiment.
HPE's advanced technology constructed "The Machine" from Plexiglas, not known for its high switching performance. It was a total scam of moron management by their revenant R&D lab management. I saw this close up.
They have some real money printers that most probably haven't heard of. IBM Maximo for example dominates some industries the way SAP and Salesforce does.
Just the set the record straight on how and why these acquisitions go at IBM. This is a first hand account working at and with IBM and competitors and being in the room as tech-guy accessory to murder.
IBM lives off huge multi-year contract deals with their customers, each are multi-multi-million dollars worth. IBM has many of these contracts, maybe ~2000 of them around the planet, including your own government wherever it is that you live. This is ALL that matters to IBM. ALL. That. Matters.
These huge contracts get renegotiated at every X years. IBM renewal salespeople are tough and rough, in particular the ones on the renewal teams, and they spend every minute of every hour in between renewals grooming the decision makers, sponsors, champions and stakeholders (and their families) within these big corporations. Every time you see an IBM logo at a sports event (and there are many IBM-sponsored events), that's not IBM marketing to you the ad-viewer. They are there for grooming their stakeholders, who fight hard to be in the best IBM sponsored-seats at those venues, and in the glamorous pre and after party, celebs included. IBM also sponsors other stuff, even special programs at universities. Who go to these universities? Oh, you bet, the stakeholder's kids, who get the IBM-treatment and IBM-scholarship at those places.
But the grooming is not enough. The renewal is not usually at risk - who has the balls to uninstall IBM out of a large corp? What is at risk is IBM's growth, which is fueled by price increases at every renewal point not the sale of new software or new clients - there are no new clients for IBM anywhere anymore! These price increases need to happen, not just because of inflation but because of the stock price and bonuses that keep the renewal army and management going strong, since this is a who-knows-who business. To justify the price increase internally at those huge client corps (not to the stakeholder but to their bosses, boards, users, etc) IBM needs to throw a bone into these negotiations. The bone is whatever acquisition you see they make: Red Hat, Hashicorp... Or developments like Watson. Or whatever. They are only interested in acquiring products or entering markets that can be thrown at those renewal negotiations, with very few exceptions. Why Confluent? Well, because they probably did their research and decided that existing Confluent licenses can be applied to one (yeah, one) or many renewal contracts as growth fuel for at least 1-to-N iterations of renewals.
Renewal contracts correspond anywhere from 60% to 95% of IBM's revenue, depending on how you account for the the consulting arm and "new" (software/hw sales/subscriptions). I particularly have not seen lots of companies hiring IBM consultants "just because we love IBM consultants and their rates", so consulting at a site is always tied to the renewal somehow, even if billed separately or not billed at all. Same for new sw sales, if a company wants something IBM has on their catalog from their own whim and will, then that will just probably be packed into the next renewal because that's stakeholder leverage for justifying the renewal's increase base rate. Remember, a lot of IBM's mainframes are not even sold, they are just rentals.
Most IBM investment into research programs, new tech (quantum computing!) etc are there just to help the renewals and secure a new Govt deal here and there. How? Well, maybe the increase in the renewal for the, ie, State of Illinois contract gets a bone thrown in for a new "Quantum Research Center (by IBM)" at some U of I campus or tech park that the now visionary Governor will happily cut the ribbon, photo op and do the speech. Oh wait! I swear I made this up as an example, but this one is actually true, lol:
having worked in a government agency that ditched IBM, let me offer a view of what that looks like from the customer side:
IBM bought a company whose product we'd been using for a while, and had a perpetual license for. A few years after the purchase, IBM tried to slip a clause into a support renewal that said we were "voluntarily" agreeing to revoke the perpetual license and move to a yearly per-seat license. Note: this was in a contract with the government, for support, not for the product itself. They then tried to come after us for seat licenses costs. Our lawyers ripped them apart, as you can't add clauses about licensing for software to a services contract, and we immediately tore out the product and never paid IBM another dime.
I tell this story not to be all "cool story, bro", but to point out that IBM does focus on renewal growth, but they're not geniuses...they're just greedy assholes who sometimes push for growth in really stupid ways.
Confluent was trading at less than 50% of its IPO price when IBM made the offer. The stock and the company has been going sideways for several years now, keeps growing revenues but loses even more as most of it is in Sales and Marketing. In which world is this seen as some sort of extraordinary company that will get sabotaged by IBM. Seems Confluent management knows the writing on the wall, IBM will clean up (fire a bunch of sales and management guys) and make this a workable business. It will seem brutal for some Confluent guys but that's because their business is broken; and only someone from outside can come in and fix it as the current senior management cannot.
IBM has been around for over a hundred years, maybe they know a thing or two about running a software business :-)
I joined IBM over 40 years ago, like my pappy before me.
My main takeaway from IBM's longevity is just how astonishingly long big companys' death rattles can be, not how great IBM are at running software businesses.
IBM is a consulting business, not a software business. Their software sucks, and every actual software engineer knows it. IBM has a business selling to big, old, backwards enterprise businesses who wouldn't know good software from literal pieces of faeces.
To me it makes sense when it comes to the stock. It's not like someone goes to Robinhood or whatever and goes... Hey you know what's underrated? Kafka! Calls on Confluent!
Investopedia says[0] they make 60% of their profit from "Software" but how much of that is "providing cloud solutions" and similar software-adjacent consulting exercises?
Genuine question: how did the IBM acquisitions of Red Hat and HashiCorp turn out?
For Red Hat, there's no longer an official "public" distribution of RHEL, but apart from that they seemingly have been left alone and able to continue to develop their own products. But that's only my POV as a user of OSS Red Hat products at home and of RHEL and OpenShift at work.
We moved off HashiCorp's Terraform Cloud when they tried to hike the price 100x on us, although that was technically pre-acquisition I think (it was their move to resource-based pricing). In talking with our account manager, they basically said they only really cared about enterprise accounts, and that migrating away would probably make sense for us.
HashiCorp also changed their licenses to non-open-source licenses, but again I think this was technically pre-acquisition (I think as they were gearing up to be a more attractive target for an exit).
In addition to this, I’ve noticed that OpenTofu is gaining much more interesting features and are actually acting upon long-requested functionality that HashiCorp has refused to implement (example: provider for_each in 1.9.0)
Former-Hashi employee here: there's a clear prioritization of enterprise products. So much so that I would not be surprised if they stopped supporting the Open Source projects entirely. That would be a big boost for the forks.
Red Hat has far more autonomy. We are not structured the same.
On the HR side — many good people are leaving; new hires have to be on-site for 3 days and located in 4 "strategic" locations in the US.
The argument has been made that the real value of RH lies in the people working there. And if IBM were to interfere too heavy-handedly, those people would just leave, and RH would become basically worthless.
Maybe that's how it should work, but it's not how it actually works.
The culture makes the company. Everyone on the lower rungs of the org chart knows this, because it's what they live and breathe every day. A positive, supportive workplace culture with clear goals and relative autonomy is a thing of beauty. You routinely find people doing more work than they really have to because they believe in the mission, or their peers, or the work is just fun. People join the company (and stay) because they WANT to not because they have to.
Past a certain company size, upper management NEVER sees this. They are always looking outward: strategy, customers, marketing, competition. Never in. They've been trained to give great motivational speeches that instill a sense of company pride and motivation for about 30 seconds. After that, employee morale is HR's job.
I have worked in a company that got acquired while it was profitable. The culture change was slow but dramatic. We went from a fun, dynamic culture with lots of teamwork and supportive management, to one step or two above Office Space. As far as the acquiring company was concerned, everything we were doing didn't matter, even if it worked. We had to conform to their systems and processes, or find new jobs. Most of us eventually did the latter.
Somehow Red Hat seems to be a notable exception. Although IBM owns Red Hat, they seem to have mostly left it alone instead of absorbing it. The name "IBM" doesn't even appear on redhat.com. Because I'm an outsider, I can't say whether IBM meddled in Red Hat's HR or management, but I would guess not.
It seems like most users got tired of the unknowns with CentOS and went to Alma/Rocky. Doesn't help that most third party software vendors also didn't bother to support it.
CentOS Stream employs a rolling-release model, which is much less stable than RHEL.
The previous main selling point of CentOS was bug-for-bug compatibility with RHEL. Red Hat is just killing the distro by moving their focus to a non-existent market. Enthusiasts will choose RHEL, while enterprises would choose the more stable RHEL, which Red Hat could earn money from, or alternatives like Alma or Rocky.
The Gnome desktop that shipped with Solaris over two decades ago is just as useful, possibly more useful, as the tablet-oriented hamburger menu UI of today.
GTK is still alive. It seems like Cosmic desktop with GTK apps will be a reasonable path forward. Of course there's KDE and QT, but I mean as an alternative to those.
One thing that's happened is that OpenShift has an IBM stamp of approval, which means it is now available in more organisations, that would otherwise have clung to more obscure mainframes and worse clown platforms.
From my perspective, as someone who is deeply suspicious of IBM in general, that's a plus.
CentOS Stream employs a rolling-release model, which is much less stable than RHEL.
The previous main selling point of CentOS was bug-for-bug compatibility with RHEL. Red Hat is just killing the distro by moving their focus to a non-existent market. Enthusiasts will choose RHEL, while enterprises would choose the more stable RHEL, which Red Hat could earn money from, or alternatives like Alma or Rocky.
It's depressing how IBM always uses the same language with every single acquisition. They don't care about the actual tech, only the patents and the ability to resell it.
I led the engineering team of a large adtech company (TripleLift - order of hundreds of billions of events/day) and we evolved from self hosting Kafka, to paying a vendor (Instacluster), to migrating to RedPanda.
RedPanda was a huge win for us. Confluent never made sense to us since we were always so cost conscious but the complexity/risk of managing a critical part of our infra was always something I worried about. RedPanda was able to handle both for us - cheaper than Kafka hosting vendors with significantly better performance. We were pretty early customers but was a huge win for us.
Same, small martech company. RedPanda works and the pricing allows actually using the service, plus the “source available” isn’t that limiting if you prefer to run your own stuff. Definitely glad to be off kafka prior to this news!
Last i talked to RedPanda sales while working at a big name client they would not offer us anything below $100k per year for enterprise support etc (us running on our kubernetes). Looks like they added some "serverless" pricing thing now, but at the time Azure Eventhub (kakfa client compatible) was cheapest enterprisy option if I remember correctly.
We switched to Redpanda's BYOC product because we couldn't use Confluent Cloud (contractual reasons) and BYOC was a third the price of Confluent for Kubernetes while also being a managed service.
I've been pretty happy with RP performance/cost/functionality wise. It isn't Kafka though, it's a proprietary C++ rewrite that aims for 100% compatibility. This hasn't been an issue in the 2+ years since we migrated prod, but YMMV.
IBM have an absolutely stellar record of blowing acquisitions. The highly motivated newly acquired team will be in honeymoon phase for 3 months, and then it slowly dawns on them that they’ve joined an unbelievably rigid organization where things like customer satisfaction and great products don’t matter at all. Then they’ll be in shock and disbelief at the mind boggling Byzantine rules and internal systems they have to use, whose sole purpose is to make sure nobody does anything. Finally, the core IBM sales force will start to make demands on them and will short to ground any vestiges of energy, time, opportunity and motivation they might have left. The good team members will leave and join a former business partner, or decide to spend more time with the family. They’ll meet often at the beginning to relive the glory days of pre-acquisition and recount times where they went went above and beyond for that important early customer. But then these meetings will become fewer and fewer. Finally they’ll find a way of massaging their resumes to cast the last years as being “at the heart of AI infrastructure”.
Yeah, they acquired the company I worked at and left us alone for a year or two. Each year would get worse though, and each year we swapped nearly all bureaucratic things around. Always a different way to do performance reviews goals, etc.
A lot of the successful projects at the original company are now dead.
It's also weird being in IBM, because if your "contract" ends they put you on the bench. Then you basically have to job hunt within IBM, and if you can't find anything within a month or so you are out. It's super weird.
"It's also weird being in IBM, because if your "contract" ends they put you on the bench. Then you basically have to job hunt within IBM, and if you can't find anything within a month or so you are out. It's super weird."
This is standard operating procedure at most consulting/professional services firms.
I don’t know how many contracts IBM deals with, but the concept of a bench is very common in government contracting. It helps retain talent in an environment that’s more volatile than a typical office. Good for the company to avoid brain drain and hiring overhead, good for the employee because it’s a built-in safety net. Much better than your contract ending and immediately being out of a job, especially in today’s market
Surely by now everyone, including non-developers and non-software people, know exactly what IBM is, and you don't sell to IBM/join IBM without knowing exactly what's about to happen. No one joins IBM today and thinks there will be a huge focus on customer satisfaction or focus on great product design, it's all about squeezing maximum profit out of products until you need to discontinue them because you chased away all of the customers.
Not wrong but the image that people are painting in the comments is getting close to a caricature now.
The stuff IBM is doing on Quantum Computing is serious cutting-edge science and engineering for instance. The R&D they are doing on semiconductors on their 2nm and sub-2nm processes is also impressive and hardcore tech. They are doing a bunch of progress on post-quantum cryptography and homomorphic encryption. They've fallen behind now, but they were also quite strong on pre-LLM NLP for a couple of decades, it was not all fluff.
Yes they have an awful enterprise culture and they are not focused on building excellent products. But what they offer fits the needs of many organizations, and a lot of the things they are doing on R&D are no joke.
I worked for a small company acquired by IBM in 2011. We had a good 5-6 year run where our product sales went up (largely because so many IBM people were selling it) and we were largely left alone. Once things slowed down a bit the IBM rot set in quick though. These days I think all that's left is a skeleton crew maintaining the obligatory long term contracts around the main product, every other part of the original company has been picked clean.
You can measure it by how many management steps you, as an employee of the recently acquired company are from the CEO in the hierarchy. As time goes on, this number tends to increase. It used to be easy to see this in Lotus Sametime or something that had some form of employee directory.
Hint: by all means possible, make sure you are not the owner of (or manager of the person who owns) any assets beyond your personal laptop. If, for example, you end up being the owner of all the development and test servers of the original company, then it will become your responsibility to ensure that each OS (of each LPAR of each VM) is security compliant, is running the end-point asset manager, and has up to date OS patches, that the DASD is encrypted, and you must periodically show physical proof that the asset still exists and indicate where it's located- photos of assets tags or whatever. It will be your responsibility to dispose of the asset (with all associated paperwork) at the end of its life.
It helps if such machines are not actually on the 9. network, or are behind an internal firewall (then they don't care about the security compliance as much).
I'm with a company that was acquired by IBM ~2.5 years ago. The internal systems are definitely rough, but for the most part it's business as usual.
I've heard chatter from our engineering leadership that IBM is trying to push some silly initiatives, but we've been able to prioritize the right work so far.
I also get more equity (one time award + employee stock purchase plan) than I did previously, and with how IBM stock has been performing lately this has been a net positive for me.
FWIW I have heard that IBM used to force their management style on acquisitions in years past, so perhaps this is a fairly recent shift towards a less hands-on approach.
> FWIW I have heard that IBM used to force their management style on acquisitions in years past
Definitely wasn't like that for Red Hat. We had a CFO with an IBM past which was a really nice guy and never ever felt like he was parachutes from IBM.
Now after 6 years legal, HR and finance will move to IBM starting next January; but my perspective from engineering is that after the acquisition it's been and remains business as usual.
Yep, this is a classic acquisition story. You go from a hungry company out there to fight to succeed and join a big corp where most projects are just endless series of meetings people have about what they want to do without any real timeline or immediate plan to start.
The worst is when your sales team (and all of its super valuable institutional knowledge of your specific market) are cut, and all your management is laid off so that the new corp's managers (who have embedded themselves into the corporate bureaucracy like a trichinosis worm) can treat all your teams as free headcount.
Soon, your company, which was acquired for growth, can't do anything and turns into an albatross around the new corp's neck. So the layoffs begin.
> ...and internal systems they have to use, whose sole purpose is to make sure nobody does anything
I once had to use Lotus Notes after the company I was at was acquired by the now defunct Computer Sciences Corporation. I decided I would never, ever work for another company that used Lotus Notes.
In defense of Byzantines. Their rules and amazing diplomatic prowess is what let them be an empire for so long. The negative connotations to Byzantine comes from the negative perception the west had of them. Byzantines were very practical in regards to who they allied with.
I'm sure the children who watched their parents get murdered before they themselves were taken into slavery during the fall of Constantinople appreciated those rules and the alliances they supported.
I hope Hashicorp survives. A few higher ups I’ve talked to there made it seem like IBM wants to learn from them, not force their old ways onto Hashicorp. We’ll see. That one is still pretty new.
HCP wasn't any prize when they got bought, though, right? HashiCorp Cloud was more like a fog in terms of growth. A bunch of products got lost a long the way (Boundary? Waypoint?) HCP lost 50% of its IPO value by the time it was bought. Yes, I know IPO's are high and always go down, but it went from around a $14bn valuation to being bought for something like $6.5bn.
Judging from what my contacts say, I would not hold my breath. HCP is going to get smashed by bureaucracy and bigcorp bs just like all other IBM acquisitions. All you have to do to verify this is look at linkedin and track the departures of the the acquired staff.
I've heard IBM is really just an external government agency. If you look at it through the lens of being acquired by a government bureaucracy, then your explanation makes perfect sense. IBM is too entrenched to fail and too poorly run to be acquired.
> They’ll meet often at the beginning to relive the glory days of pre-acquisition and recount times where they went went above and beyond for that important early customer.
Pretty bleak, and describes my experience to a T (although involving other companies). Has there ever been an example where a company has been acquired and culture/morale/conditions have actually improved rather than dissolved?
I wouldn't describe it as improved necessarily, but successfully integrated. This happened many times - youtube by google for example. Facebook acquisitions are pretty successful too (not looking if it was good for humanity, just from business perspective).
Some companies like Amazon buy companies and let them run almost independently - IMDB for example, Zappos, Twitch, Whole Foods, Zoox, Audible.
The Apple acquisition of NeXT has (only half-jokingly) been described as NeXT buying Apple with Apple's money. That's obviously an exceptionally rare case.
That's a very cynical take. Unfortunately likely correct.
It's a fact that a publicly traded company is beholden to Wall Street and any time such a company would use their earnings for R&D the P/E and margins go down (i.e. spending more money to earn the same) and this is considered a negative signal at Wall Street and the company gets punished in the market.
So the only way a company can spend their earnings is to pay dividends or buy assets such as other companies, which then must be squeezed for margins.
IBM isn’t really a tech company anymore. More of a legal trolling company that cosplays as tech.
They seem to primarily benefit from kickbacks in the form of both leasing and technical contracts for things like opening offices in a location for tax benefits or to promote local economy.
Then they see how far they can cut back their end of the contract after the first few months (e.g. Maybe we agreed to have 500 employees in an office, but since nobody is allowed in, we think we can get away with 100 employees.) Then this turns into trolling about how the contract never defines what in office means so can we offshore… Too much undefined confusion, so I guess we get to break the contract but keep what the mayor paid us… Then they just shut down the office and move on to the next location.
It seems like the local government must be in on these schemes for leasing. Otherwise this wouldn’t be going on for decades as it has been.
The other part of business, technical contracts, is similar except instead of leasing it’s providing some sort of infrastructure coverage for something big. It starts off with good faith fulfilling the contract. Then a few months later it’s like well we have a US military contract that demands US employees but US employees are too expensive. What if we offshore but all the traffic is technically going through a single US employee’s computer which is what the contract technically demands.
Then it turns into well we have offshore people working on this anyway, why not just give them direct access and we’ll have a US person overseeing them. Lay everyone else off.
Then they see how long they can get away with this until someone gets mad. Then they take one step back to see how close to the technical contract they can get while threatening to abandon the whole thing at the same time.
Along with this sort of atmosphere and attitude for the law, it seems we see them constantly doing everything possible to constantly fire old people or anyone else that has legally protected status. So you’ll get statistical analytics on ways to fire protected people based around the constant performance reviews with statistics being used to see how close groups of protected people can be removed without statistically breaking the law. Whatever that algorithm is.
That plays into just straight up cutting people, but it also goes into a lot of other subsystems of skirting the law, like if old people can’t relocate as easily then hopping offices and forcing people to relocate 5000 miles is a way they can be eliminated. Part of this might be moving people onto new teams and then saying that team has to be in office for some made up reason, and then firing them for not relocating or using some made up metric like badging timestamps to get them, or some other technicality like leaving for lunch 5 minutes early despite being a salaried employee which is reported as hourly because of tax trolling.
I don’t know how IBM still exists because from my perspective it’s pretty clear they’re breaking or at best on razor thin gray line on ice on just about every possible law you could break.
I worked for IBM Cloud about 6+ years ago. While there, we had to connect to a Softlayer VPN to get into our Jira instance. My VPN account and Jira account never got provisioned so I couldn't connect nor see the Jira board. My team-mates couldn't even assign a ticket to me b/c of this. They would just put my initial's in the ticket summary and send me a slack of the details.
It was right before I left that we got our own Jira instance. This was all around the time of the Red Hat acquisition. I remember the announcement b/c we used SuSE for everything IIRC.
I work for a company that has so much bureaucracy and silos that teams maintain wiki pages with links and routing on how to create tickets for specific tasks and wether there is a specific mandatory information needed in order to not have your ticket just closed as incomplete without an explanation.
Sometimes a team unilaterally decide to change the process, info is sent to a random number of mailbox/managers who may fail to pass the info. Some entire teams just put themselves in away status 24/7 and do not respond to direct messages.
So yes I can believe his story. Sometimes in these kind of companies you just don't know who and how to ask for something and you just hope someone knows someone who might know.
What's the largest company you've worked for? A lot of big, older companies, are just so messed up that its just not worth it. How do you do this? Well you have to find the specific form, or specific person who does the thing, who is that? no one knows. So that provisioning of a vpn and getting in jira might literally be like a month of work.
On consulting engagements, 0% of the time are Jira and git provisioned correctly for an outside consultant. I used to be appalled at being paid for two or three days of waiting for the IT guy to fix this. Now I use the time to find cleaning supplies and deep clean my cubicle and chair. People do look at me funny, but I feel better not just sitting there reading.
I did, multiple times. I was a contractor. I was the only one on my team of contractors whose account was screwed up. There seemed to be no priority to do anything there. One of many many reasons I left when I could.
I had a similar thing happen to me with a huge company as a contractor. I couldn't work for 3 weeks due to a combination of login issues and permissions settings. Couldn't file a ticket and no one was really sure who to call/ask. Finally a director caught wind of it and knew who to talk to.
I imagine that's done via JIRA tcket/IT before onboarding.
So if they somehow can get past initial device deployment/user account logon, and get other resources IE; slack....well that speaks to how difficult/pointless it would be to get proper VPN/Jira access.
It's like how lots of species evolve into crabs, or crab like things. Instead of dying out evolutionarily, failed giants like IBM evolve into Computer Associates.
pull vs push. Plus if you start storing the last timestamp so you only select the delta and if you start sharding your db and dealing with complexities of having different time on different tables/replication issues it quickly becomes evident that Kafka is better in this regard.
But yeah, for a lot of implementations you don't need streaming. But for pull based apps you design your architecture differently, some things are a lot easier than it is with DB, some things are harder.
Have a table level seqno as monotonically increasing number stamped for every mutation. When a subscriber connects it asks for rows > Subscriber's seqno-last-handled.
ibm also acquired datastax (managed pulsar) this year. building on top of these specialized managed service providers is becoming increasingly risky. at this point i'd rather use one of the kneecapped cloud provider offerings if possible (azure event hubs / aws msk / etc.) than risk being extorted in a few years as the result of some acquisition. at least you can work around the limitations..
anyone have an idea on how streamnative is doing? we're considering them for managed pulsar and unfortunately nobody else is in the game
And two years prior IBM acquired Ahana (PrestoDB SaaS). Totally agree that businesses need to much more carefully assess the risks of moving to these hosted open source platforms. Reminds me of when over a decade ago companies moved to Snowflake for their DWs because "our Teradata costs are out of control".
Seems like a great day for Pulsar / StreamNative and Redpanda who are going to get a lot of new customers in the coming years.
When looking for alternatives to Kafka these are the most promising options I found, not counting RabbitMQ which needs no introduction.
Pulsar seems to be 'kafka done better'. The version of Kafka that Confluent used internally (Kora) seems closer to Pular as well. Pulsar has a lot of features that Kafka doesn't have, like per-message acknowledgement, similar to RabbitMQ. And it has protocol support for RabbitMQ and Kafka, so can be a drop-in replacement.
Redpanda seems like a great re-implementation of Kafka.
I'm hoping this boosts Pulsar's status and helps get some traction for StreamNative. It seems like the best technical solution for events and messaging. It just needs a bit more market adoption to make an easier choice for enterprise, in my opinion. This might be that moment.
IBM is buying market share, not a surprise; at least one telecom has all their Kafka stuff on the Confluent cloud, and there must be 1000s of such customers.
Confluent had great stuff but their prices were crazy. When we got a quote from them, it was 20x more than what we could run on our own. We got quoted something like ~500k/year and my math on running it on AWS came around 25k for the same sized cluster via Strimzi operator on dedicated K8s nodes. We could hire a dedicated 3 person team to manage the cluster for the same price lol.
Now AWS is eating Confluent's lunch with it's managed Kafka. AWS MSK is still a little rough like all AWS services but it's still cheaper and a no-brainer if you are already on AWS.
I have similar stories, I showed the Confluent consultants a projection of their Kafka quote vs Kinesis and it was like 10x, even they were confused. The ingress/egress costs are insane. I think they just do very deep discounts to certain customers. The product is good but if you pay full ticket it probably doesn't make sense.
The only way (95%+) companies selling to enterprises survive are if they get bought by a bigger platform and the sales force of the bigger platform just has to sell an extra line item. If you want to make money, track companies that have sales and marketing expenses same order / same / higher than revenue and then create a synthetic index of these companies (they need to have sold something like $1BN in license in aggregate over time - maintenance stream and you confirm that the pig can be sold somehow) . most will be eventually sold at a premium to their traded price.
11 billion invested in multiple hardware developments including moonshots would have been more sensible that for Kafka operator (remember MQSeries/MQ btw)
I have thought quite a bit today about the news from Confluent and IBM. I have friends and colleagues at both companies. When I was an undergrad at Carnegie Mellon University in the 1980s I used to wear a big brown and tan IBM button that said "THINK."
And here is a picture of Ben Lorica 罗瑞卡 interviewing Jay Kreps and other industry leaders at The Hive back on the evening of 25 February 2015. I believe they were talking about strategies for implementing Lambda Architecture.
All of which is to say: I have been a big fan of both companies for a long, long time. While today I am at employed at Redpanda Data, a direct competitor of Confluent, I hope to set aside any "team"-based bias to provide a sober and honest appraisal.
First, IBM has been shrinking. They were at 345,000 employees as of their 2020 Annual Report. But the COVID-19 pandemic was only one of many setbacks the company faced when Arvind Krishna took the helm as CEO. By December 2024 the employee base shrank to 270,000 — a drop of nearly 22%.
IBM revenue in 2020: $73.6B.
IBM revenue in 2024: $62.75B — a less-precipitous drop of 15%.
Revenue per employee over that period rose from $213k to $232k.
Confluent on its own? $400k.
And to compare: Amazon earns $580k per employee. Microsoft generates over $1M per. Nvidia? $4M-$5M.
And now, in November, they announced thousands of more layoffs. No one seems safe, regardless of job title. Those cut include positions in "artificial intelligence, marketing, software engineering and cloud technology."
Next, IBM has had a mixed record as a steward of acquisitions. Red Hat has doubled in revenues since their 2019 acquisition. For a while its headcount continued to grow, as much as 19,000 by 2023. But then it was forced into layoffs by parent IBM in April of that year, and then each year since, even while it remains one of the highest margin businesses in their portfolio.
SoftLayer — "IBM Cloud Classic" — also suffered significant layoffs in early 2025, with offshoring sending jobs to India.
DataStax had layoffs in 2023-2024, even before its acquisition was announced. Maybe they were "trimming the fat" to get into a shape to be acquired.
As a person with a long career in marketing, I know that many of the first roles to be jettisoned at a newly-acquired company tend to be in go-to-market organizations. Sales, Marketing, Developer Relations, Documentation, Training, Community, Customer Service. These tend to be seen as "nice to haves" by upper management. But their loss guts organizations and hollows out user-facing teams and open source communities.
My hope is that Confluent is spared as much of the pain and turmoil as possible. That, like Red Hat, it is run autonomously as much as possible.
A note on your "IBM has been shrinking" take: IBM spun out Kyndryl in 2021, including 90,000 employees [0]. That leaves the remaining company with 255,000 employees after the spin-off in 2021, which means it has actually grown by 15,000 people to reach the 270,000 in 2024.
The spin-off also explains the drop in revenue. In 2021, the first results reported excluding Kyndryl, IBM had revenues of $57.4B [1].
Since 2021, revenue grew by ~9% to reach $62.75B in 2024.
Fair. A good callout. And maybe the right move. However, a healthy IBM would not have needed to calve off its entire Global Technology Services business.
If Apache Foundation is where open source projects go to die ...
I can't think of a better place for longevity of open source projects than Apache (maybe I'm out of the loop?).
Compare it to the Linux Foundation where everything is a single commercial vendor sponsored project. At lease Apache requires independent governance and a diverse ecosystem before the project graduates.
Am I missing something with the Apache Foundation?
If you're serious, Kafka is a topic-centric message bus. Everything is a topic, not a queue, and its internals are optimized to achieve very quick at-least-once delivery.
Ah yes, and every consumer should just do this in a while (true) loop as producers write to it. Very efficient and simple with no possibility of lock contention or hot spots. Genius, really.
I was in the midst of writing a snarky reply and then realized my actual issue with Kafka is that people reach for it way too often and use it in ways that don't really make sense.
Kind of like how people use docker for evrything, when what you really should be doing is learn how to package software.
Nothing inherently wrong with the core product IMHO. The issue is more with Confluent, who have been constantly swinging from hot buzzword to hot buzzword for the last few years in search of growth. Confluent cloud is very expensive, and you still have to deal with a surprising amount of scaling headaches. I have people I consider friends that work there, so I don't want to go too deep into their various missteps, but the Kafka ecosystem has been largely stagnant outside of getting rid of Zookeeper and simplifying operations/deployment. There have been some decent quality of life fixes, but the platform is very expensive, yet if you are really all-in on Kafka, you would be insane to not get support from Confluent- it can break in surprising ways.
So you are stuck with some really terrible tradeoffs- Go with Confluent Cloud, pay a fortune, and still likely have some issues to deal with. Or you could go with Confluent Platform, still have to pay people to operate it, while Confluent the company focuses most of their attention on Cloud and still charges you a fortune. Or you could just go completely OS and forgo anything Confluent and risk being really up the river when something inevitably breaks, or you have to learn the hard way that librdkafka has poor support for a lot of the shiny features discussed in the release notes.
Redpanda has surpassed them from a technical quality perspective, but Kafka has them beat on the ecosystem and the sheer inertia of moving from one platform to another. Kafka for example was built in a time of spinning rust hard disks, and expects to be run on general purpose compute nodes, where Redpanda will actually look at your hardware and optimize the number of threads its spawns for the box it is on- assuming it is going to be the only real app running there, which is true for anything but a toy deployment.
This is my experience from running platform teams and being head of messaging at multiple companies.
IBM paid a ~30% premium on the current stock price, so all shareholders (I imagine employees own a bunch of shares) will get a decent chunk of cash.
Some redundant departments (HR, finance, accounting and the like) will be downsized after the acquisition.
Engineering and product will be unaffected in the short term, but in a year or two the IBM culture will start to seep in, and that would be a good time for tenured employees to start planning their exits. That's also when lock-up agreements will expire and the existing leadership of Confluent will depart and be replaced by IBM execs.
It depends a lot on which org they go into, and the motivations of the P&L owner of that division.
IBM is a really big and diverse company, in a way fundamentally different from most other big tech. In a sense, it is completely incoherent to refer to them as a singular entity.
My opinions are my own. I worked at IBM like a decade ago in a role where I could see the radically different motivations of divisions.
From experience, and to slightly refute the sibling replied, good for the confluent peeps that get flagged as being essential to the acquisition, they'll get a retention bonus of 100-300% of base pay spread over three years. The cutting of staff will begin likely in the 3-5 year time frame.
This is so fascinating to me. I mean how IBM keeps taking over other companies, but they consistently deliver low quality/bottom-tier services and products. Why do they keep doing the same thing again and again? How are they generating actual revenue this way?
Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic are doing, with in-house tools? They have a mature PowerPC (Power9+? now?)setup, lots of talent to make ML/LLMs work and lots of existing investment in datacenters and getting GPU-intense workloads going.
I don't disagree that this acquisition is good strategy, I'm just fascinated (Schadenfreude?) to witness the demise of confluent now. I think economists should study this, it might help avert larger problems.
Watson was a marketing exercise designed to sell a bunch of disconnected text and image processing libraries pulled together by consulting services. It did not function as advertised.
At one point we worked with a large energy company that was basically sold something LLM-like (large-scale indexing and searching/querying of documents) in 2016 or so. IBM had a team of 90 people doing full-time data ingestion for something like 26,000 documents. We got asked to do a counter-product in two weeks, which was literally just a TF-IDF search and some smarts around ingesting different types of documents. Both solutions performed approximately equally, except one cost something in the order of $185m and one cost $40k. Watson continued running for about a year until an external data science contractor realised they could query Watson for highly confidential board meeting notes, and it would provide full previews into the documents. The project was shuttered shortly after.
Alas, nobody gets fired for hiring IBM.
Yep, and I think they've already used the Watson brand for a good bunch of different technologies, and most if them have been retired for lack of success. In fact, seems like a couple weeks ago they've sold a good chunk of Watson Healthcare to private equity [0]. Edit: When I talk about the lack of success, I talk not only about market success, but the usefulness of the product.
Until 3/4 years go I was in healthcare for 15 years, a good bunch of them being partners with IBM in radiology imaging solutions. I've been in their IBM La Gaude (former) research/presentations lab a couple times and I've seen a lot of their Watson product come and go, without much success. I have to say that I've seen a couple that were very interesting, but were mostly statistical, with no AI/LLM/... involvement.
And don't talk me about Softlayer/Bluemix. Or their private cloud racks that I cannot even remember their name...
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> Watson was a marketing exercise designed to sell a bunch of disconnected text and image processing libraries pulled together by consulting services. It did not function as advertised.
Okay, but why can't IBM enter the LLM business reviving the Watson brand?
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Why in the world would economists need to study this? It's been known that large bureaucracies have been dysfunctional for over a couple of decades now if not centuries. The large reason is because 1) the incentives to do great work are not there (most of the credit for a huge company's success goes to the CEO who gets 100X the salary of a regular worker while delivering usually pretty much nothing) 2) politics usually plays a huge role which gives a huge advantage to your competition (i.e. your competition needs to spend less time on politics and more time on the actual product) and 3) human beings don't functionally work well in groups larger than 100-250 due to the overwhelming complexity of the communication needed in order to make this type of structure work. Incentives though I think are the primary driver - most people at companies like IBM don't have any incentives to actually care about the product they produce and that's the secret behind the ruin of almost every large company.
Edit: you also seem to be giving too much credence to Watson. Watson was actually mostly a marketing tool designed to win in Jeopardy and nothing else. It was constructed specifically to compete in that use-case and was nowhere near to the architecture of a general transformer which is capable of figuring out meta-patterns within language and structurally understanding language. You can read about Watson's design and architecture here if you're curious: https://www.cs.cornell.edu/courses/cs4740/2011sp/papers/AIMa...
More like we need psychologists to ask "why are companies still working with IBM's efficiencies 30 years after its peak?" The workers don't have to care but the businesses dealing with IBM should.
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> most of the credit for a huge company's success goes to the CEO who gets 100X the salary of a regular worker while delivering usually pretty much nothing
Well, in Confluent's case I'm not so sure that's true given that their CEO is also the company founder as well as one of the original authors of Apache Kafka.
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Everything will make sense when you realize that IBM is a consulting company. They don't care about building great products. In fact building self-serve products will directly take away from their consulting revenue. They instead need to be good at marketing and selling their services. Watson was exactly that - a marketing demo that got them in the news cycle and helped them sell a giant wave of contracts under a single brand to unsuspecting CIOs of legacy non-tech companies. Every acquisition helps with this goal. Red Hat - locking companies into licenses and support contracts for the OS. HashiCorp & Confluent - locking companies into support contracts for their cloud infra.
>> Ok, so does anyone remember 'Watson'? [...] Why didn't they compete with OpenAI like Google and Anthropic are doing, with in-house tools?
> Everything will make sense when you realize that IBM is a consulting company.
This and.
The 'and' being that consulting companies, in their DNA, build solutions for their customers.
Which is a very different business than building products for all users.
Not least because the former is guided by understanding a customer's requirements, while the later is having a strong intuition (backed up by market fit) about what all users want.
I'm pretty sure there might not be a full end user capable (in the sense of design-build-iterate) product team in IBM at this point.
Mostly because I don't think they've any middle/upper management that can think that way. They've got the engineers!
The service part you are likely referring to is now Kyldryl, a separate company. IBM now focus on software and cloud. There are still services but are much less prominent.
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> they consistently deliver low quality/bottom-tier services and products
I worked with IBMers. The main priority for a lot of them is to ensure continuous employment for themselves and their buddies. They'd add unnecessary complexity to a product to stretch out the development for another couple of years. And they work at leisure pace for tech. Actual 9 to 5, many coffee breaks. They can't compete.
> And they work at leisure pace for tech. Actual 9 to 5, many coffee breaks.
Ultra-based. We should all be so lucky.
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"Actual 9 to 5", meaning the standard 40 hour work week?
If someone is telling you to work more than 40 hours a week in a salaried position, and they're not paying out the nose, you're being scammed.
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I worked with IBM several decades ago for a customer project, and the solution suggested by an IBM'er for backing up a NoSQL database (Lotus Notes) on a daily basis was to translate and migrate the data to a relational one (DB2), then use a DB2 tape backup system to back it up.
When I pointed out that this was a stupid way to do it, they openly told me that they just wanted to sell DB2.
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They will die happy knowing they did more than just create shareholder value.
The way you put it, looks like IBM is a pretty good place to work at
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I do advisory for pre-Series A startups as a last ditch effort to save them.
I do not get the unified industry delusion about "why X company has a bad product". It is usually either one of two things: comfort or ego. Everyone knows that but do not want to say it out loud.
I have seen these happen time and time again. Companies that are cash cow, do not care to do a better job. There is no incentive to do a better job. Moreover, the recurring thing is that if I did something different, I wouldn't have been this much successful in the first place.
The rest of the smart consultants walk on eggshells. They hint at stuff but never want to bite the hand that feeds them because the clients would rather fire you than be challenged.
It is not an IBM thing; it's generic business thing to some degree. I really have to call this a delusion. Good consultants submit generic reports that just tell them what they want to hear. It is not you; it is the economy. Stupid consultants that are well-meaning tell them they should be the best on competitor intel. Do you not think some stupid person did not approach IBM to do what Oracle or AWS is doing? Of course, they did, and they were fired immediately.
The best consultants are less of a consultant and more of a therapist.
After doing only four-month projects for the entire year, this year's realization was that nobody in the industry wants to do better. Everyone is in their place because of ego or a perceived sense of success. Or because of a grand conspiracy theory. IBM has a significant number of government contracts, so they are set for life because the vast majority government IT systems are pigeonholed into IBM systems. The acquisition is to tell the shareholders that we are so successful that we can literally buy companies. We do not even care to do things. Whatever the new thing is, we will buy it at some point.
Sounds like the German government. Or probably other governments as well.
>> Actual 9 to 5, many coffee breaks
Found my dream job :-)
I'll say this about IBM: because it's so old, it was the most diverse company I ever worked for- including age, nationality, race, sex, and any other category you can think of. Basically you had all types of people in all stages of life, not just young white workaholic tech-bros. The founders are long gone, so everyone there (including CEO) is a professional- meaning nobody has any kind of personal attachment to the company. We were all in the same boat, as it were. When your older coworker suddenly disappears due to a stroke, it puts things in perspective.
The fast-paced startup is really the hack, combining the energy of youth with the ego-mania of their founders. Ask yourself, is it healthy?
Anyway, IBM's customers tend to be other fortune 100s and governments- basically other similar organizations, and my experience was that we took care of them pretty well. The products were not pretty (no Steve Jobs-like person to enforce beauty), and rather complex due to all the enterprise requirements. But they were quite high quality, particularly the hardware.
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We should all be so blessed. :pray:
> Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house
I do. I remember going to a chat once where they wanted to get people on-board in using it. It was 90 minutes of hot air. They "showed" how Watson worked and how to implement things, and I think every single person in the room knew they were full of it. Imagine we were all engineers and there were no questions at the end.
Comparing Watson to LLMs is like comparing a rock to an AIM-9 Sidewinder.
Watson was nothing like ChatGPT. The first iteration was a system specifically built to play Jeopardy. It did some neat stuff with NLP and information retrieval, but it was all still last generation AI/ML technology. It then evolved into a brand that IBM used to sell its consulting services. The product itself was a massive failure because it had no real applications and was too weak as a general purpose chat bot.
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If anyone is curious to see what Watson actually was you can find it here (it was nowhere near to a generalized large langue model -- mostly made for winning in Jeopardy): https://www.cs.cornell.edu/courses/cs4740/2011sp/papers/AIMa...
>Why do they keep doing the same thing again and again? How are they generating actual revenue this way?
IBM has a ton of Enterprise software, backed by a bunch of consultants hiding in boring businesses/governments.
They also do a ton of outsourcing work where they will be big enterprise IT support desk and various other functions. In fact, that side has gotten so big, IBM now has more employees in India in then any other country.
Your fascination seems hinged on the fact that IBM has "lots of talent to make ML/LLMs work" which judging by what they've put out so far and talk publicly about, is very far from the truth. Anyone who has a clue seems to (rightly) have left IBM decades ago, and left are business people who think "Managed to increase margin by 0.1%" is something to celebrate.
It’s a shame because people forget how good IBM research was back in the day. I do wonder if they still have great people in those r&d labs, or if they all left.
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To be a bit more candid, they have lots of employees outside of the US (particularly in India). and both in the US and elsewhere, people need to eat. They may not have the talent to innovate new tech like OpenAI and others, or do cutting-edge R&D, but they certainly have the talent to take LLM breakthroughs and adapt. They could have competed with many of the B-Tier LLM services out there with the right leadership.
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> Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic are doing, with in-house tools?
Leadership in IBM also thought that Watson was like what what OAI/Anthropic/Google are doing now. It wasn't. Watson was essentially a ML pipeline over-optimized on Jeopardy, which is why it failed in literally every other domain.
Outside of Jeopardy, Watson was just a brand.
Sure, but they were doing that stuff. They had ML people, infrastructure, marketing, branding,etc... already. Their product sucked, but they could have copy-catted OpenAI in 2022+ like everyone else.
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They gave up on watson about 18 months before llm's popped up, and they have simply just not got enough cash on hand to compete. While the big boys grew fantastically bigger over the past 15 years as cloud happened ibm fumbled time after time and shrank ever smaller, and is now desperately hoping it can stay relevant. but in the end they just haven't got the resources to compete on that stage anymore.
The recent interview with Arvind had the “grapes are too green, anyway” energy. They missed the train because they were licking their Watson wounds. Then sorta regretted it but it’s too late.
Same thing happened with their cloud offering. They laughed at AWS, then tried to catch up, then missed and pivoted to “hybrid” (cloud and local).
If they hadn't sold the ThinkPad (and related) brands I would care.
I’m pretty convinced there is a bell curve of “understanding what IBM does” where idiots and geniuses both have absolutely no idea.
It really is probably that strangest company in tech which you think could be mysterious and intriguing. But no one cares. It’s like no one wants to look behind the boring suit and see wtf. From my low point on that bell curve I can’t see how they are even solvent.
Have you seen Office Space? I'm sure it was based on IBM
There are entire niches of us that make a living (not at IBM) making certain IBM products actually do what they're supposed to. From my vantage point I see essentially zero maintenance going on with their products. I sincerely don't understand the market (why do people keep paying hundreds of thousands to millions of dollars for non-existent support?) - but whatever.
Just to be clear, you honestly believe that IBM does no maintenance.
For my package on one VERSION alone: https://gitlab.com/redhat/centos-stream/src/kernel/centos-st...
I dont know if you were trying to be funny, or simply dont understand how much change really goes on.
To add to that i think their R&D labs along with HPE were one of the few to innovate on the memristor and actually build some fascinating concept machines.If i rememeber HPE's was 'The Machine'.
Athough i think they just di/dont know how to adapt these to market that isnt a enterprise behemoth , rather than develop/price it so more devs can take a hold and experiment.
HPE's advanced technology constructed "The Machine" from Plexiglas, not known for its high switching performance. It was a total scam of moron management by their revenant R&D lab management. I saw this close up.
What I'm hearing you say is that IBM is basically just a private equity firm now.
IBM is where good (acquired) software goes to die. RIP Clearcase.
good? That POS is the one SW that 100% deserves it place in hell
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Power10-based processors are manufactured by Samsung using a 7 nm process
In Sweden, IBM makes a shit tonne of money from SAP implementation consulting.
So they are good partners ?
They have some real money printers that most probably haven't heard of. IBM Maximo for example dominates some industries the way SAP and Salesforce does.
Just the set the record straight on how and why these acquisitions go at IBM. This is a first hand account working at and with IBM and competitors and being in the room as tech-guy accessory to murder.
IBM lives off huge multi-year contract deals with their customers, each are multi-multi-million dollars worth. IBM has many of these contracts, maybe ~2000 of them around the planet, including your own government wherever it is that you live. This is ALL that matters to IBM. ALL. That. Matters.
These huge contracts get renegotiated at every X years. IBM renewal salespeople are tough and rough, in particular the ones on the renewal teams, and they spend every minute of every hour in between renewals grooming the decision makers, sponsors, champions and stakeholders (and their families) within these big corporations. Every time you see an IBM logo at a sports event (and there are many IBM-sponsored events), that's not IBM marketing to you the ad-viewer. They are there for grooming their stakeholders, who fight hard to be in the best IBM sponsored-seats at those venues, and in the glamorous pre and after party, celebs included. IBM also sponsors other stuff, even special programs at universities. Who go to these universities? Oh, you bet, the stakeholder's kids, who get the IBM-treatment and IBM-scholarship at those places.
But the grooming is not enough. The renewal is not usually at risk - who has the balls to uninstall IBM out of a large corp? What is at risk is IBM's growth, which is fueled by price increases at every renewal point not the sale of new software or new clients - there are no new clients for IBM anywhere anymore! These price increases need to happen, not just because of inflation but because of the stock price and bonuses that keep the renewal army and management going strong, since this is a who-knows-who business. To justify the price increase internally at those huge client corps (not to the stakeholder but to their bosses, boards, users, etc) IBM needs to throw a bone into these negotiations. The bone is whatever acquisition you see they make: Red Hat, Hashicorp... Or developments like Watson. Or whatever. They are only interested in acquiring products or entering markets that can be thrown at those renewal negotiations, with very few exceptions. Why Confluent? Well, because they probably did their research and decided that existing Confluent licenses can be applied to one (yeah, one) or many renewal contracts as growth fuel for at least 1-to-N iterations of renewals.
Renewal contracts correspond anywhere from 60% to 95% of IBM's revenue, depending on how you account for the the consulting arm and "new" (software/hw sales/subscriptions). I particularly have not seen lots of companies hiring IBM consultants "just because we love IBM consultants and their rates", so consulting at a site is always tied to the renewal somehow, even if billed separately or not billed at all. Same for new sw sales, if a company wants something IBM has on their catalog from their own whim and will, then that will just probably be packed into the next renewal because that's stakeholder leverage for justifying the renewal's increase base rate. Remember, a lot of IBM's mainframes are not even sold, they are just rentals.
Most IBM investment into research programs, new tech (quantum computing!) etc are there just to help the renewals and secure a new Govt deal here and there. How? Well, maybe the increase in the renewal for the, ie, State of Illinois contract gets a bone thrown in for a new "Quantum Research Center (by IBM)" at some U of I campus or tech park that the now visionary Governor will happily cut the ribbon, photo op and do the speech. Oh wait! I swear I made this up as an example, but this one is actually true, lol:
https://newsroom.ibm.com/2024-12-12-ibm-and-state-of-illinoi...
You get the drill?
having worked in a government agency that ditched IBM, let me offer a view of what that looks like from the customer side:
IBM bought a company whose product we'd been using for a while, and had a perpetual license for. A few years after the purchase, IBM tried to slip a clause into a support renewal that said we were "voluntarily" agreeing to revoke the perpetual license and move to a yearly per-seat license. Note: this was in a contract with the government, for support, not for the product itself. They then tried to come after us for seat licenses costs. Our lawyers ripped them apart, as you can't add clauses about licensing for software to a services contract, and we immediately tore out the product and never paid IBM another dime.
I tell this story not to be all "cool story, bro", but to point out that IBM does focus on renewal growth, but they're not geniuses...they're just greedy assholes who sometimes push for growth in really stupid ways.
Confluent was trading at less than 50% of its IPO price when IBM made the offer. The stock and the company has been going sideways for several years now, keeps growing revenues but loses even more as most of it is in Sales and Marketing. In which world is this seen as some sort of extraordinary company that will get sabotaged by IBM. Seems Confluent management knows the writing on the wall, IBM will clean up (fire a bunch of sales and management guys) and make this a workable business. It will seem brutal for some Confluent guys but that's because their business is broken; and only someone from outside can come in and fix it as the current senior management cannot.
IBM has been around for over a hundred years, maybe they know a thing or two about running a software business :-)
I joined IBM over 40 years ago, like my pappy before me.
My main takeaway from IBM's longevity is just how astonishingly long big companys' death rattles can be, not how great IBM are at running software businesses.
Are they dying? IBM’s stock is up 160% over the past 5 years.
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I don't think they're dying at all, they're just become yet another consultancy/outsourcing shop
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exactly
[dead]
IBM is a consulting business, not a software business. Their software sucks, and every actual software engineer knows it. IBM has a business selling to big, old, backwards enterprise businesses who wouldn't know good software from literal pieces of faeces.
That's not entirely true. Db2, for example, is a well-respected database.
To me it makes sense when it comes to the stock. It's not like someone goes to Robinhood or whatever and goes... Hey you know what's underrated? Kafka! Calls on Confluent!
Are they really a software business?
Investopedia says[0] they make 60% of their profit from "Software" but how much of that is "providing cloud solutions" and similar software-adjacent consulting exercises?
[0]: https://www.investopedia.com/how-ibm-makes-money-4798528
Not a Hacker News take I would have expected 10 years ago. Today, though. I agree.
Genuine question: how did the IBM acquisitions of Red Hat and HashiCorp turn out?
For Red Hat, there's no longer an official "public" distribution of RHEL, but apart from that they seemingly have been left alone and able to continue to develop their own products. But that's only my POV as a user of OSS Red Hat products at home and of RHEL and OpenShift at work.
We moved off HashiCorp's Terraform Cloud when they tried to hike the price 100x on us, although that was technically pre-acquisition I think (it was their move to resource-based pricing). In talking with our account manager, they basically said they only really cared about enterprise accounts, and that migrating away would probably make sense for us.
HashiCorp also changed their licenses to non-open-source licenses, but again I think this was technically pre-acquisition (I think as they were gearing up to be a more attractive target for an exit).
In addition to this, I’ve noticed that OpenTofu is gaining much more interesting features and are actually acting upon long-requested functionality that HashiCorp has refused to implement (example: provider for_each in 1.9.0)
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> (I think as they were gearing up to be a more attractive target for an exit).
A common conspiracy theory, but not true.
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> were gearing up to be a more attractive target for an exit
An "exit" from the public market?
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Former-Hashi employee here: there's a clear prioritization of enterprise products. So much so that I would not be surprised if they stopped supporting the Open Source projects entirely. That would be a big boost for the forks.
Red Hat has far more autonomy. We are not structured the same.
On the HR side — many good people are leaving; new hires have to be on-site for 3 days and located in 4 "strategic" locations in the US.
That's really bad news for projects that don't (yet?) have significant forks, like consul and vagrant.
The argument has been made that the real value of RH lies in the people working there. And if IBM were to interfere too heavy-handedly, those people would just leave, and RH would become basically worthless.
Maybe that's how it should work, but it's not how it actually works.
The culture makes the company. Everyone on the lower rungs of the org chart knows this, because it's what they live and breathe every day. A positive, supportive workplace culture with clear goals and relative autonomy is a thing of beauty. You routinely find people doing more work than they really have to because they believe in the mission, or their peers, or the work is just fun. People join the company (and stay) because they WANT to not because they have to.
Past a certain company size, upper management NEVER sees this. They are always looking outward: strategy, customers, marketing, competition. Never in. They've been trained to give great motivational speeches that instill a sense of company pride and motivation for about 30 seconds. After that, employee morale is HR's job.
I have worked in a company that got acquired while it was profitable. The culture change was slow but dramatic. We went from a fun, dynamic culture with lots of teamwork and supportive management, to one step or two above Office Space. As far as the acquiring company was concerned, everything we were doing didn't matter, even if it worked. We had to conform to their systems and processes, or find new jobs. Most of us eventually did the latter.
Somehow Red Hat seems to be a notable exception. Although IBM owns Red Hat, they seem to have mostly left it alone instead of absorbing it. The name "IBM" doesn't even appear on redhat.com. Because I'm an outsider, I can't say whether IBM meddled in Red Hat's HR or management, but I would guess not.
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Well, there is CentOS Stream:
https://www.centos.org/centos-stream/
And Fedora is still the upstream of RHEL, nothing changed there.
It seems like most users got tired of the unknowns with CentOS and went to Alma/Rocky. Doesn't help that most third party software vendors also didn't bother to support it.
No, it is a totally different distro.
CentOS Stream employs a rolling-release model, which is much less stable than RHEL.
The previous main selling point of CentOS was bug-for-bug compatibility with RHEL. Red Hat is just killing the distro by moving their focus to a non-existent market. Enthusiasts will choose RHEL, while enterprises would choose the more stable RHEL, which Red Hat could earn money from, or alternatives like Alma or Rocky.
I migrated our company off Terraform to Pulumi as a direct result of the acquisition.
How has it been? Sincere question.
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Gnome has stagnated significantly.
I'm not sure this is bad? It's still maintained, and it isn't like there are frequent revolutions in UI design - if it works, it works.
Slow and boring is a pretty nice place to be.
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The Gnome desktop that shipped with Solaris over two decades ago is just as useful, possibly more useful, as the tablet-oriented hamburger menu UI of today.
Yes, two decades: https://adtmag.com/articles/2003/08/04/solaris-gets-a-gnome-...
If only it had stagnated around gnome 2.0.
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The people on the Red Hat desktop team that work on GNOME are killing it. I think you might not be paying attention. Not every change is visible.
Has it? I feel like Gnome has made great progress the last few years
>> Gnome has stagnated significantly.
GTK is still alive. It seems like Cosmic desktop with GTK apps will be a reasonable path forward. Of course there's KDE and QT, but I mean as an alternative to those.
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Could that be due to increased popularity of KDE?
Linux on the desktop isn't a lucrative business
One thing that's happened is that OpenShift has an IBM stamp of approval, which means it is now available in more organisations, that would otherwise have clung to more obscure mainframes and worse clown platforms.
From my perspective, as someone who is deeply suspicious of IBM in general, that's a plus.
> no longer an official "public" distribution of RHEL
What do you mean by that, like "centos/stream" (aka https://www.centos.org/download/ ) ?
CentOS Stream employs a rolling-release model, which is much less stable than RHEL.
The previous main selling point of CentOS was bug-for-bug compatibility with RHEL. Red Hat is just killing the distro by moving their focus to a non-existent market. Enthusiasts will choose RHEL, while enterprises would choose the more stable RHEL, which Red Hat could earn money from, or alternatives like Alma or Rocky.
“With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI.”
https://newsroom.ibm.com/2025-12-08-ibm-to-acquire-confluent...
I don't understand how this acquisition is relevant for AI.
Every time an executive says AI the number goes up.
Always Increasing
Event-driven AI decision making is the C-suite wet dream. A large % of major orgs run Kafka for their eventing systems.
So the idea is sorta watching the wire of streaming data with autonomous agents or something like that?
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not for much longer
As I read the release, it just sounded like "something something something data, something something something AI."
AI is just the lastest buzzword. Everyone has it, because they have to. Don't look behind the curtain.
Anything today has to contain the word "AI" otherwise it simply won't be considered.
Streaming, EDA can solve lot of data challenges for enterprise AI use cases
It's depressing how IBM always uses the same language with every single acquisition. They don't care about the actual tech, only the patents and the ability to resell it.
You can double your company's value by saying it's an AI company. Easiest, simplest way to create value.
Everything in IT is AI now. We should just change the industry initialism to AIT.
They probably have cursor licenses
AI Agent for Kafka Consumer group
/s
Maybe a good time to consider alternatives https://www.redpanda.com/compare/redpanda-vs-kafka
I led the engineering team of a large adtech company (TripleLift - order of hundreds of billions of events/day) and we evolved from self hosting Kafka, to paying a vendor (Instacluster), to migrating to RedPanda.
RedPanda was a huge win for us. Confluent never made sense to us since we were always so cost conscious but the complexity/risk of managing a critical part of our infra was always something I worried about. RedPanda was able to handle both for us - cheaper than Kafka hosting vendors with significantly better performance. We were pretty early customers but was a huge win for us.
Same, small martech company. RedPanda works and the pricing allows actually using the service, plus the “source available” isn’t that limiting if you prefer to run your own stuff. Definitely glad to be off kafka prior to this news!
This. Using RP was like a breath of fresh air compared to the dread of Kafka (both local dev, and running a prod cluster)
Last i talked to RedPanda sales while working at a big name client they would not offer us anything below $100k per year for enterprise support etc (us running on our kubernetes). Looks like they added some "serverless" pricing thing now, but at the time Azure Eventhub (kakfa client compatible) was cheapest enterprisy option if I remember correctly.
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We switched to Redpanda's BYOC product because we couldn't use Confluent Cloud (contractual reasons) and BYOC was a third the price of Confluent for Kubernetes while also being a managed service.
I've been pretty happy with RP performance/cost/functionality wise. It isn't Kafka though, it's a proprietary C++ rewrite that aims for 100% compatibility. This hasn't been an issue in the 2+ years since we migrated prod, but YMMV.
Maybe this whole thing it's because Snowflake acquired redpanda earlier this year: https://www.investors.com/news/technology/snowflake-stock-re...
Snowflake did not acquire RP after all.
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IBM have an absolutely stellar record of blowing acquisitions. The highly motivated newly acquired team will be in honeymoon phase for 3 months, and then it slowly dawns on them that they’ve joined an unbelievably rigid organization where things like customer satisfaction and great products don’t matter at all. Then they’ll be in shock and disbelief at the mind boggling Byzantine rules and internal systems they have to use, whose sole purpose is to make sure nobody does anything. Finally, the core IBM sales force will start to make demands on them and will short to ground any vestiges of energy, time, opportunity and motivation they might have left. The good team members will leave and join a former business partner, or decide to spend more time with the family. They’ll meet often at the beginning to relive the glory days of pre-acquisition and recount times where they went went above and beyond for that important early customer. But then these meetings will become fewer and fewer. Finally they’ll find a way of massaging their resumes to cast the last years as being “at the heart of AI infrastructure”.
Yeah, they acquired the company I worked at and left us alone for a year or two. Each year would get worse though, and each year we swapped nearly all bureaucratic things around. Always a different way to do performance reviews goals, etc.
A lot of the successful projects at the original company are now dead.
It's also weird being in IBM, because if your "contract" ends they put you on the bench. Then you basically have to job hunt within IBM, and if you can't find anything within a month or so you are out. It's super weird.
"It's also weird being in IBM, because if your "contract" ends they put you on the bench. Then you basically have to job hunt within IBM, and if you can't find anything within a month or so you are out. It's super weird."
This is standard operating procedure at most consulting/professional services firms.
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I don’t know how many contracts IBM deals with, but the concept of a bench is very common in government contracting. It helps retain talent in an environment that’s more volatile than a typical office. Good for the company to avoid brain drain and hiring overhead, good for the employee because it’s a built-in safety net. Much better than your contract ending and immediately being out of a job, especially in today’s market
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Surely by now everyone, including non-developers and non-software people, know exactly what IBM is, and you don't sell to IBM/join IBM without knowing exactly what's about to happen. No one joins IBM today and thinks there will be a huge focus on customer satisfaction or focus on great product design, it's all about squeezing maximum profit out of products until you need to discontinue them because you chased away all of the customers.
Not wrong but the image that people are painting in the comments is getting close to a caricature now.
The stuff IBM is doing on Quantum Computing is serious cutting-edge science and engineering for instance. The R&D they are doing on semiconductors on their 2nm and sub-2nm processes is also impressive and hardcore tech. They are doing a bunch of progress on post-quantum cryptography and homomorphic encryption. They've fallen behind now, but they were also quite strong on pre-LLM NLP for a couple of decades, it was not all fluff.
Yes they have an awful enterprise culture and they are not focused on building excellent products. But what they offer fits the needs of many organizations, and a lot of the things they are doing on R&D are no joke.
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I worked for a small company acquired by IBM in 2011. We had a good 5-6 year run where our product sales went up (largely because so many IBM people were selling it) and we were largely left alone. Once things slowed down a bit the IBM rot set in quick though. These days I think all that's left is a skeleton crew maintaining the obligatory long term contracts around the main product, every other part of the original company has been picked clean.
You can measure it by how many management steps you, as an employee of the recently acquired company are from the CEO in the hierarchy. As time goes on, this number tends to increase. It used to be easy to see this in Lotus Sametime or something that had some form of employee directory.
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>mind boggling Byzantine rules
Hint: by all means possible, make sure you are not the owner of (or manager of the person who owns) any assets beyond your personal laptop. If, for example, you end up being the owner of all the development and test servers of the original company, then it will become your responsibility to ensure that each OS (of each LPAR of each VM) is security compliant, is running the end-point asset manager, and has up to date OS patches, that the DASD is encrypted, and you must periodically show physical proof that the asset still exists and indicate where it's located- photos of assets tags or whatever. It will be your responsibility to dispose of the asset (with all associated paperwork) at the end of its life.
It helps if such machines are not actually on the 9. network, or are behind an internal firewall (then they don't care about the security compliance as much).
… isn’t this… what you should be doing already?
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I'm with a company that was acquired by IBM ~2.5 years ago. The internal systems are definitely rough, but for the most part it's business as usual.
I've heard chatter from our engineering leadership that IBM is trying to push some silly initiatives, but we've been able to prioritize the right work so far.
I also get more equity (one time award + employee stock purchase plan) than I did previously, and with how IBM stock has been performing lately this has been a net positive for me.
FWIW I have heard that IBM used to force their management style on acquisitions in years past, so perhaps this is a fairly recent shift towards a less hands-on approach.
> FWIW I have heard that IBM used to force their management style on acquisitions in years past
Definitely wasn't like that for Red Hat. We had a CFO with an IBM past which was a really nice guy and never ever felt like he was parachutes from IBM.
Now after 6 years legal, HR and finance will move to IBM starting next January; but my perspective from engineering is that after the acquisition it's been and remains business as usual.
I have no idea how it was for Hashicorp.
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Yep, this is a classic acquisition story. You go from a hungry company out there to fight to succeed and join a big corp where most projects are just endless series of meetings people have about what they want to do without any real timeline or immediate plan to start.
The worst is when your sales team (and all of its super valuable institutional knowledge of your specific market) are cut, and all your management is laid off so that the new corp's managers (who have embedded themselves into the corporate bureaucracy like a trichinosis worm) can treat all your teams as free headcount.
Soon, your company, which was acquired for growth, can't do anything and turns into an albatross around the new corp's neck. So the layoffs begin.
I once had to use Lotus Notes after the company I was at was acquired by the now defunct Computer Sciences Corporation. I decided I would never, ever work for another company that used Lotus Notes.
The worst ever product: IBM FileNet! What an awful product. An acquisition, btw.
A lot of people seem to voice a disdain for Notes but I actually liked it for some reason.
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Hasn't Notes been sluffed off to HCL?
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IBM is designed to milk every last bit of money from their clients. So they need to add new products every now and then to add new money flows.
In defense of Byzantines. Their rules and amazing diplomatic prowess is what let them be an empire for so long. The negative connotations to Byzantine comes from the negative perception the west had of them. Byzantines were very practical in regards to who they allied with.
I learned more here and I'm not sure I agree with your comment fully.
https://www.reddit.com/r/etymology/comments/8shw5r/what_is_t...
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I'm sure the children who watched their parents get murdered before they themselves were taken into slavery during the fall of Constantinople appreciated those rules and the alliances they supported.
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I hope Hashicorp survives. A few higher ups I’ve talked to there made it seem like IBM wants to learn from them, not force their old ways onto Hashicorp. We’ll see. That one is still pretty new.
They said the same thing about Red Hat. The fact that Whitehurst resigned from IBM should tell you something.
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They tell that to every company they buy
HCP wasn't any prize when they got bought, though, right? HashiCorp Cloud was more like a fog in terms of growth. A bunch of products got lost a long the way (Boundary? Waypoint?) HCP lost 50% of its IPO value by the time it was bought. Yes, I know IPO's are high and always go down, but it went from around a $14bn valuation to being bought for something like $6.5bn.
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Not to be cynical but that's said a lot in acquisitions by bigger companies to motivate some people to stay, but just doesn't seem to happen.
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Judging from what my contacts say, I would not hold my breath. HCP is going to get smashed by bureaucracy and bigcorp bs just like all other IBM acquisitions. All you have to do to verify this is look at linkedin and track the departures of the the acquired staff.
My friends at RedHat were embracing similar forms of copium. By now they've all either moved on or are actively hand sitting while exploring options.
I've heard IBM is really just an external government agency. If you look at it through the lens of being acquired by a government bureaucracy, then your explanation makes perfect sense. IBM is too entrenched to fail and too poorly run to be acquired.
> They’ll meet often at the beginning to relive the glory days of pre-acquisition and recount times where they went went above and beyond for that important early customer.
Yeesh. Which level of hell is that?
There were a series of Dilbert comics that spoke to this.
Dilbert’s company buys an “artsy” startup (represented by a chap with a goatee and a ponytail).
Dilbert comments something like “We get your energy and skill, and we provide … an endless supply of 3-ring binders.”
To which the chap replies “I hear that if your name goes into a binder, you lose your soul.”
Pretty bleak, and describes my experience to a T (although involving other companies). Has there ever been an example where a company has been acquired and culture/morale/conditions have actually improved rather than dissolved?
I wouldn't describe it as improved necessarily, but successfully integrated. This happened many times - youtube by google for example. Facebook acquisitions are pretty successful too (not looking if it was good for humanity, just from business perspective).
Some companies like Amazon buy companies and let them run almost independently - IMDB for example, Zappos, Twitch, Whole Foods, Zoox, Audible.
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The Apple acquisition of NeXT has (only half-jokingly) been described as NeXT buying Apple with Apple's money. That's obviously an exceptionally rare case.
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I had friends that worked at a high-profile IBM acquisition a decade ago and this is exactly what happened.
That's a very cynical take. Unfortunately likely correct.
It's a fact that a publicly traded company is beholden to Wall Street and any time such a company would use their earnings for R&D the P/E and margins go down (i.e. spending more money to earn the same) and this is considered a negative signal at Wall Street and the company gets punished in the market.
So the only way a company can spend their earnings is to pay dividends or buy assets such as other companies, which then must be squeezed for margins.
More here:
https://www.cringely.com/2015/06/03/autodesks-john-walker-ex...
This feels like the kind of post you can only write with sombre experience.
IBM isn’t really a tech company anymore. More of a legal trolling company that cosplays as tech.
They seem to primarily benefit from kickbacks in the form of both leasing and technical contracts for things like opening offices in a location for tax benefits or to promote local economy.
Then they see how far they can cut back their end of the contract after the first few months (e.g. Maybe we agreed to have 500 employees in an office, but since nobody is allowed in, we think we can get away with 100 employees.) Then this turns into trolling about how the contract never defines what in office means so can we offshore… Too much undefined confusion, so I guess we get to break the contract but keep what the mayor paid us… Then they just shut down the office and move on to the next location.
It seems like the local government must be in on these schemes for leasing. Otherwise this wouldn’t be going on for decades as it has been.
The other part of business, technical contracts, is similar except instead of leasing it’s providing some sort of infrastructure coverage for something big. It starts off with good faith fulfilling the contract. Then a few months later it’s like well we have a US military contract that demands US employees but US employees are too expensive. What if we offshore but all the traffic is technically going through a single US employee’s computer which is what the contract technically demands.
Then it turns into well we have offshore people working on this anyway, why not just give them direct access and we’ll have a US person overseeing them. Lay everyone else off.
Then they see how long they can get away with this until someone gets mad. Then they take one step back to see how close to the technical contract they can get while threatening to abandon the whole thing at the same time.
Along with this sort of atmosphere and attitude for the law, it seems we see them constantly doing everything possible to constantly fire old people or anyone else that has legally protected status. So you’ll get statistical analytics on ways to fire protected people based around the constant performance reviews with statistics being used to see how close groups of protected people can be removed without statistically breaking the law. Whatever that algorithm is.
That plays into just straight up cutting people, but it also goes into a lot of other subsystems of skirting the law, like if old people can’t relocate as easily then hopping offices and forcing people to relocate 5000 miles is a way they can be eliminated. Part of this might be moving people onto new teams and then saying that team has to be in office for some made up reason, and then firing them for not relocating or using some made up metric like badging timestamps to get them, or some other technicality like leaving for lunch 5 minutes early despite being a salaried employee which is reported as hourly because of tax trolling.
I don’t know how IBM still exists because from my perspective it’s pretty clear they’re breaking or at best on razor thin gray line on ice on just about every possible law you could break.
This is what is happening with red hat also?
I worked for IBM Cloud about 6+ years ago. While there, we had to connect to a Softlayer VPN to get into our Jira instance. My VPN account and Jira account never got provisioned so I couldn't connect nor see the Jira board. My team-mates couldn't even assign a ticket to me b/c of this. They would just put my initial's in the ticket summary and send me a slack of the details.
It was right before I left that we got our own Jira instance. This was all around the time of the Red Hat acquisition. I remember the announcement b/c we used SuSE for everything IIRC.
Why didn't you ask to get the accounts provisioned?
I work for a company that has so much bureaucracy and silos that teams maintain wiki pages with links and routing on how to create tickets for specific tasks and wether there is a specific mandatory information needed in order to not have your ticket just closed as incomplete without an explanation.
Sometimes a team unilaterally decide to change the process, info is sent to a random number of mailbox/managers who may fail to pass the info. Some entire teams just put themselves in away status 24/7 and do not respond to direct messages.
So yes I can believe his story. Sometimes in these kind of companies you just don't know who and how to ask for something and you just hope someone knows someone who might know.
What's the largest company you've worked for? A lot of big, older companies, are just so messed up that its just not worth it. How do you do this? Well you have to find the specific form, or specific person who does the thing, who is that? no one knows. So that provisioning of a vpn and getting in jira might literally be like a month of work.
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On consulting engagements, 0% of the time are Jira and git provisioned correctly for an outside consultant. I used to be appalled at being paid for two or three days of waiting for the IT guy to fix this. Now I use the time to find cleaning supplies and deep clean my cubicle and chair. People do look at me funny, but I feel better not just sitting there reading.
I did, multiple times. I was a contractor. I was the only one on my team of contractors whose account was screwed up. There seemed to be no priority to do anything there. One of many many reasons I left when I could.
I had a similar thing happen to me with a huge company as a contractor. I couldn't work for 3 weeks due to a combination of login issues and permissions settings. Couldn't file a ticket and no one was really sure who to call/ask. Finally a director caught wind of it and knew who to talk to.
I imagine that's done via JIRA tcket/IT before onboarding.
So if they somehow can get past initial device deployment/user account logon, and get other resources IE; slack....well that speaks to how difficult/pointless it would be to get proper VPN/Jira access.
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You'd have to be able to find the person to do that first hehe!
It's like how lots of species evolve into crabs, or crab like things. Instead of dying out evolutionarily, failed giants like IBM evolve into Computer Associates.
Kafka is already past it's prime time. Time for new solutions for the oldest problem - sending a message.
I'm still convinced the vast majority of kafka implementations could be replaced with `SELECT * FROM mytable ORDER BY timestamp ASC`
pull vs push. Plus if you start storing the last timestamp so you only select the delta and if you start sharding your db and dealing with complexities of having different time on different tables/replication issues it quickly becomes evident that Kafka is better in this regard.
But yeah, for a lot of implementations you don't need streaming. But for pull based apps you design your architecture differently, some things are a lot easier than it is with DB, some things are harder.
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Sure, if you're working on a small homelab with minimal to no processing volume.
The second you approach any kind of scale, this falls apart and/or you end up with a more expensive and worse version of Kafka.
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Yes but try putting that on your CV.
That is exactly what I am doing with sqlite.
Have a table level seqno as monotonically increasing number stamped for every mutation. When a subscriber connects it asks for rows > Subscriber's seqno-last-handled.
Nothing wrong with Kafka. Time to build better abstractions on top of Kafka.
It's not for sending a message like a queue it's an event log.
Erlang/OTP!
ATProto? (aka AT protocol, ATP, Atmosphere...)
What are the alternatives?
RedPanda, Iggy, Pulsar, Fluvio, NATS, etc.
wait what do you mean? what's wrong with kafka?
ibm also acquired datastax (managed pulsar) this year. building on top of these specialized managed service providers is becoming increasingly risky. at this point i'd rather use one of the kneecapped cloud provider offerings if possible (azure event hubs / aws msk / etc.) than risk being extorted in a few years as the result of some acquisition. at least you can work around the limitations..
anyone have an idea on how streamnative is doing? we're considering them for managed pulsar and unfortunately nobody else is in the game
> anyone have an idea on how streamnative is doing?
we keep pushing Pulsar and moving things - https://streamnative.io/blog/ursa-wins-vldb-2025-best-indust...
And two years prior IBM acquired Ahana (PrestoDB SaaS). Totally agree that businesses need to much more carefully assess the risks of moving to these hosted open source platforms. Reminds me of when over a decade ago companies moved to Snowflake for their DWs because "our Teradata costs are out of control".
Seems like a great day for Pulsar / StreamNative and Redpanda who are going to get a lot of new customers in the coming years.
When looking for alternatives to Kafka these are the most promising options I found, not counting RabbitMQ which needs no introduction.
Pulsar seems to be 'kafka done better'. The version of Kafka that Confluent used internally (Kora) seems closer to Pular as well. Pulsar has a lot of features that Kafka doesn't have, like per-message acknowledgement, similar to RabbitMQ. And it has protocol support for RabbitMQ and Kafka, so can be a drop-in replacement.
Redpanda seems like a great re-implementation of Kafka.
I'm hoping this boosts Pulsar's status and helps get some traction for StreamNative. It seems like the best technical solution for events and messaging. It just needs a bit more market adoption to make an easier choice for enterprise, in my opinion. This might be that moment.
https://streamnative.io/
*(yes I know about NATS)
This is great news. Kafka (the messaging/streaming platform) has finally found its natural home.
IBM is buying market share, not a surprise; at least one telecom has all their Kafka stuff on the Confluent cloud, and there must be 1000s of such customers.
Confluent had great stuff but their prices were crazy. When we got a quote from them, it was 20x more than what we could run on our own. We got quoted something like ~500k/year and my math on running it on AWS came around 25k for the same sized cluster via Strimzi operator on dedicated K8s nodes. We could hire a dedicated 3 person team to manage the cluster for the same price lol.
Now AWS is eating Confluent's lunch with it's managed Kafka. AWS MSK is still a little rough like all AWS services but it's still cheaper and a no-brainer if you are already on AWS.
I have similar stories, I showed the Confluent consultants a projection of their Kafka quote vs Kinesis and it was like 10x, even they were confused. The ingress/egress costs are insane. I think they just do very deep discounts to certain customers. The product is good but if you pay full ticket it probably doesn't make sense.
At least you can now safely buy into Kafka, as nobody ever got fired for buying IBM.
This isn't the old times, you can expect the opposite outcome these days.
OP IMHO was obviously being sarcastic.
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I know companies who would certainly have fired people for buying IBM, if they could have gone back in time to do so.
This is so funny. Now CNBC says "...The addition of Confluence will strengthen IBM’s artificial intelligence portfolio..."
Since when is streaming event logs AI? Am I taking crazy pills?
Near-Real-time inference is a hot thing these days with Apache Flink, which is commercially supported by Confluent (not Confluence)
Haven’t got the memo? Everything computing is AI now. If you want to sell it, that is.
Some market reaction
Confluent stock soars 29% as IBM announces $11B acquisition deal
https://www.cnbc.com/2025/12/08/ibm-confluent-deal-data.html
The only way (95%+) companies selling to enterprises survive are if they get bought by a bigger platform and the sales force of the bigger platform just has to sell an extra line item. If you want to make money, track companies that have sales and marketing expenses same order / same / higher than revenue and then create a synthetic index of these companies (they need to have sold something like $1BN in license in aggregate over time - maintenance stream and you confirm that the pig can be sold somehow) . most will be eventually sold at a premium to their traded price.
IBM was teabagging the Hasicorp booth at re:Invent with conspicuously old hardware set out like a museum piece. Ugh.
What does this mean?
I read it as purposely making the booth unattractive or bland? not sure either haha
That's good, that's good!
A nod's as good as a wink to a blind bat!
Nudge, nudge, know what I mean?
Do you mean sandbagging?
Let the Bluewashing begin. Everything will be WebSphere-first and then WebSphere-only.
11 billion invested in multiple hardware developments including moonshots would have been more sensible that for Kafka operator (remember MQSeries/MQ btw)
I have thought quite a bit today about the news from Confluent and IBM. I have friends and colleagues at both companies. When I was an undergrad at Carnegie Mellon University in the 1980s I used to wear a big brown and tan IBM button that said "THINK."
And here is a picture of Ben Lorica 罗瑞卡 interviewing Jay Kreps and other industry leaders at The Hive back on the evening of 25 February 2015. I believe they were talking about strategies for implementing Lambda Architecture.
All of which is to say: I have been a big fan of both companies for a long, long time. While today I am at employed at Redpanda Data, a direct competitor of Confluent, I hope to set aside any "team"-based bias to provide a sober and honest appraisal.
First, IBM has been shrinking. They were at 345,000 employees as of their 2020 Annual Report. But the COVID-19 pandemic was only one of many setbacks the company faced when Arvind Krishna took the helm as CEO. By December 2024 the employee base shrank to 270,000 — a drop of nearly 22%.
IBM revenue in 2020: $73.6B.
IBM revenue in 2024: $62.75B — a less-precipitous drop of 15%.
Revenue per employee over that period rose from $213k to $232k.
Confluent on its own? $400k.
And to compare: Amazon earns $580k per employee. Microsoft generates over $1M per. Nvidia? $4M-$5M.
And now, in November, they announced thousands of more layoffs. No one seems safe, regardless of job title. Those cut include positions in "artificial intelligence, marketing, software engineering and cloud technology."
Next, IBM has had a mixed record as a steward of acquisitions. Red Hat has doubled in revenues since their 2019 acquisition. For a while its headcount continued to grow, as much as 19,000 by 2023. But then it was forced into layoffs by parent IBM in April of that year, and then each year since, even while it remains one of the highest margin businesses in their portfolio.
SoftLayer — "IBM Cloud Classic" — also suffered significant layoffs in early 2025, with offshoring sending jobs to India.
DataStax had layoffs in 2023-2024, even before its acquisition was announced. Maybe they were "trimming the fat" to get into a shape to be acquired.
As a person with a long career in marketing, I know that many of the first roles to be jettisoned at a newly-acquired company tend to be in go-to-market organizations. Sales, Marketing, Developer Relations, Documentation, Training, Community, Customer Service. These tend to be seen as "nice to haves" by upper management. But their loss guts organizations and hollows out user-facing teams and open source communities.
My hope is that Confluent is spared as much of the pain and turmoil as possible. That, like Red Hat, it is run autonomously as much as possible.
[Crossposted from LinkedIn here, where you can see the photo mentioned: https://www.linkedin.com/feed/update/urn:li:activity:7404052...]
A note on your "IBM has been shrinking" take: IBM spun out Kyndryl in 2021, including 90,000 employees [0]. That leaves the remaining company with 255,000 employees after the spin-off in 2021, which means it has actually grown by 15,000 people to reach the 270,000 in 2024.
The spin-off also explains the drop in revenue. In 2021, the first results reported excluding Kyndryl, IBM had revenues of $57.4B [1]. Since 2021, revenue grew by ~9% to reach $62.75B in 2024.
[0] https://www.kyndryl.com/us/en/about-us/news/2021/11/2021-11-... [1] https://newsroom.ibm.com/2022-1-24-IBM-RELEASES-FOURTH-QUART...
Fair. A good callout. And maybe the right move. However, a healthy IBM would not have needed to calve off its entire Global Technology Services business.
If Apache Foundation is where open source projects go to die (a bit unfair though), IBM is the equivalent for for-profit companies.
If Apache Foundation is where open source projects go to die ...
I can't think of a better place for longevity of open source projects than Apache (maybe I'm out of the loop?).
Compare it to the Linux Foundation where everything is a single commercial vendor sponsored project. At lease Apache requires independent governance and a diverse ecosystem before the project graduates.
Am I missing something with the Apache Foundation?
No, you're right. That's why I said it's a bit unfair to say that. But that's the meme.
How is this different from Apache Qpid or RabbitMQ or IBM MQ (at least the first and third of those is already owned by IBM!)
If you're serious, Kafka is a topic-centric message bus. Everything is a topic, not a queue, and its internals are optimized to achieve very quick at-least-once delivery.
If you use Kafka as a queue, then no difference. (Load balance a message between consumers)
But you can also use Kafka as pub-sub system (duplicate messages to each subscribers)
Messages are not deleted after consumption (configurable)
Adjacent space, but can't help but wonder why Confluent did so much better than MapR
https://www.computerweekly.com/news/252468013/MapR-collapse-... have some context on MapR's demise.
IMO they were simultaneously worse situated for near-real-time stream processing and for S3-esque cloud storage, areas Kafka and Confluent excelled.
And the enshittification treadmill continues. Great time to be a kafka alternative.
I'll start.
https://github.com/tansu-io/tansu
Redpanda has been a superior wire-compatible alternative to Kafka for years.
https://www.redpanda.com/compare/redpanda-vs-kafka
Until Redpanda becomes enshittified.
Sigh.
https://pulsar.apache.org/
https://nats.io
Not a drop in replacement, but worth looking at.
https://jepsen.io/analyses/nats-2.12.1
Apache Iggy seems like a project with a lot of momentum: https://github.com/apache/iggy
Do any of these alternatives make it easy to transition a system that is using Kafka Connectors and Avro?
Pulsar supports the kafka protocol, so anything that works with Kafka should just work with Pulsar.
https://docs.streamnative.io/cloud/build/kafka-clients/kafka...
`SELECT * FROM mytable ORDER BY timestamp ASC`
Ah yes, and every consumer should just do this in a while (true) loop as producers write to it. Very efficient and simple with no possibility of lock contention or hot spots. Genius, really.
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wait what's wrong with kafka?
I was in the midst of writing a snarky reply and then realized my actual issue with Kafka is that people reach for it way too often and use it in ways that don't really make sense.
Kind of like how people use docker for evrything, when what you really should be doing is learn how to package software.
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Nothing inherently wrong with the core product IMHO. The issue is more with Confluent, who have been constantly swinging from hot buzzword to hot buzzword for the last few years in search of growth. Confluent cloud is very expensive, and you still have to deal with a surprising amount of scaling headaches. I have people I consider friends that work there, so I don't want to go too deep into their various missteps, but the Kafka ecosystem has been largely stagnant outside of getting rid of Zookeeper and simplifying operations/deployment. There have been some decent quality of life fixes, but the platform is very expensive, yet if you are really all-in on Kafka, you would be insane to not get support from Confluent- it can break in surprising ways.
So you are stuck with some really terrible tradeoffs- Go with Confluent Cloud, pay a fortune, and still likely have some issues to deal with. Or you could go with Confluent Platform, still have to pay people to operate it, while Confluent the company focuses most of their attention on Cloud and still charges you a fortune. Or you could just go completely OS and forgo anything Confluent and risk being really up the river when something inevitably breaks, or you have to learn the hard way that librdkafka has poor support for a lot of the shiny features discussed in the release notes.
Redpanda has surpassed them from a technical quality perspective, but Kafka has them beat on the ecosystem and the sheer inertia of moving from one platform to another. Kafka for example was built in a time of spinning rust hard disks, and expects to be run on general purpose compute nodes, where Redpanda will actually look at your hardware and optimize the number of threads its spawns for the box it is on- assuming it is going to be the only real app running there, which is true for anything but a toy deployment.
This is my experience from running platform teams and being head of messaging at multiple companies.
What's wrong with kafka or what WILL BE wrong with kafka?
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https://en.wikipedia.org/wiki/Enshittification is helpful if you arent aware of how late stage capitalism works
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previously...
https://www.confluent.io/blog/confluent-acquires-warpstream/
Warpstream (by Confluent (an IBM company))
good for the founding team! Kafka is an enterprise bloat. most of the queueing solutions could be built with something much simpler
is it good or bad for confluent employees?
IBM paid a ~30% premium on the current stock price, so all shareholders (I imagine employees own a bunch of shares) will get a decent chunk of cash.
Some redundant departments (HR, finance, accounting and the like) will be downsized after the acquisition.
Engineering and product will be unaffected in the short term, but in a year or two the IBM culture will start to seep in, and that would be a good time for tenured employees to start planning their exits. That's also when lock-up agreements will expire and the existing leadership of Confluent will depart and be replaced by IBM execs.
And sales teams will likely be forced to cross-sell IBM Products.
It depends a lot on which org they go into, and the motivations of the P&L owner of that division.
IBM is a really big and diverse company, in a way fundamentally different from most other big tech. In a sense, it is completely incoherent to refer to them as a singular entity.
My opinions are my own. I worked at IBM like a decade ago in a role where I could see the radically different motivations of divisions.
From experience, and to slightly refute the sibling replied, good for the confluent peeps that get flagged as being essential to the acquisition, they'll get a retention bonus of 100-300% of base pay spread over three years. The cutting of staff will begin likely in the 3-5 year time frame.
IPO'd at 45, high of 90ish, sold at 30. It depends on the strike price for employees, but its not clear if its universally a good outcome.
Both.
IBM will likely give Confluent employees a large pay package, and then let them go after the merger.
They will get some money in the short term, but they better start looking for another job
edit: btw, it's typical for any acquisition/merger
the price sounds a little bit high from a technical perspective
Another genius move from International Business Machines!
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Could anyone please explain what IBM is even doing these days? Where revenue is coming from?
it's a public company, read the quarterly reports