Thursday, April 1, 2010

Chalk one up for the freetards

SCO finally lost the big one against Novell. But the damn thing refuses to go quietly, it’s still pursuing its first lawsuit against IBM, which now not only has not even a leg to stand on nor a stool seat for missing legs to prop up, doesn’t even hold water as the bucket has no bottom, is stillborn in the womb but damn it to hell, they gonna’ nurse this foetus all the way to full term. Talk about living in the unreal world. It’s basically a vehicle for lawyers on both sides to milk it until those teats are spent and deflated and flapping like pancakes and excreting dustbunnies and whistling trapped air. This is why Samuel Adams said “First, shoot the lawyers!!!” [ed. actually it was Wm. Shakespeare:”The first thing we do, let’s kill all the lawyers, Henry The Sixth, Part 2 Act 4, scene 2, 71–78]. Then he invented beer.

Wednesday, March 31, 2010

Larry vs. SAP & IBM – the dick fight continues!

Hot stuff tech reporter for CBS Marketwatch, Therese Poletti,

I gotta' admit, it's the power and the beard. I get a hot bubbly fondue just thinking 'bout him.

loves to hear

C'mon Palmisano - make my day!

Larry say how much he’s gonna put away SAP and IBM, which he has been saying now for quite a long while. While I’m pretty sure the Sun acquisition was a move directed at IBM,  Larry’s secret weapon against SAP has yet to be deployed satisfactorily, nay, it’s not even out of the oven yet. Well, it’s just all show for the stockholders, folks. Larry waves his dick, SAP’s co-CEOs have to pull theirs out, and you gotta’ an amusing sword fight, meanwhile Palmisano over at IBM, remember him, he’s busily re-arranging the deck chairs on his ship of state and all the passengers and the media thinks its dandy, while the crew are ready to mutiny, ‘ceptin’ thar be a boatload of scabs from India and The Spice Isles ready to sign on at a moment’s notice. It’s going to be fun when somebody finally snoozes S.S. Big Blue runs aground off a reef or a dastardly iceberg in the middle of some foggy night.  And Cringely will be off to the side in a dinghy yelling from his megaphone, “I told ya’ so, I told ya’ so!”

Monday, October 12, 2009

The case against IBM, continued

See, when there’s only one mainframe company in the world, and they’ve locked most of their customers into long-term outsourcing contracts, and in some cases they don’t just run the data center, they actually own the data center, well, the customers are kind of at IBM’s mercy. And sometimes that really, really sucks. Just ask Air New Zealand.

Today’s case study: Air New Zealand, a big IBM outsourcing customer, lost its data center and was massively disrupted. Its CEO complained in an email, and said:

In my 30-year working career, I am struggling to recall a time where I have seen a supplier so slow to react to a catastrophic system failure such as this and so unwilling to accept responsibility and apologise to its client and its client’s customers. We were left high and dry and this is simply unacceptable. My expectations of IBM were far higher than the amateur results that were delivered yesterday, and I have been left with no option but to ask the IT team to review the full range of options available to us to ensure we have an IT supplier whom we have confidence in and one who understands and is fully committed to our business and the needs of our customers.

Let’s overlook the fact that the guy can’t spell “apologize,” and point out the obvious, which is that his airline maybe should have thought about this before they signed over their data center to IBM.

See, those outsourcing deals always sounded so good: Why do you want to run a messy old data center anyway? We can do it for less than it costs you to do it yourself, and you can focus on your real core competence, which is running an airline.

Except, um, no. An airline’s core competence is running computers. I mean, think about it. Duh.

Thing is, these guys did think about it. They knew the deal, but they did it anyway. You know why? Because they got to take a bunch of assets off their balance sheet and send a few hundred IT employees to IBM. It was an accounting maneuver, a way to dress up their financial reports, and it was especially appealing to weak companies. IBM takes your data center off your hands — and in some cases even pays you some money — and then sells it back to you as a service over the next decade.

This isn’t about IBM being a technology company. It’s about IBM being a bank.

But once IBM takes over your data center, they can start using it to goose its own hardware sales. Like in 2002, at Air New Zealand, when IBM swept out all the Windows NT Compaq servers and replaced them with Linux on mainframes. Ah, Linux. That’s the stuff that sets you free, remember?

They might even start renting out cycles in your data center to their other customers, and calling it “utility computing.” Because, see, IBM can’t make money on the deal if they just take your old crap and run it for you (aka “your mess for less.”) They need to put you into a big pool with loads of other people.

They also need to set up the deal such that you get a discount in the early years, but prices start sliding up toward the end of the 10-year contract, and you’re locked in with a huge penalty for early termination. And if you do survive the 10 years, well, by then they’ll have you so hooked that you can’t ever leave.

Yeah. You’re at the mercy of your outsourcer. Which is why a lot of these deals are made by CEOs who know they’re not going to be around long enough to take the heat for them. They get a quick shot of chemo for their sickly financials, and then they’re out the door and their successor can mop up the mess.

This is also why the first thing Jamie Dimon did when he took over J.P. Morgan Chase in 2004 was to cancel the bank’s long-term outsourcing deal with IBM. No flies on Jamie.

In response to the Air New Zealand fiasco and its CEO’s threats to “review the full range of options available to us” IBM CEO Sam Palmisano issued this statement:

Options? What options? At IBM we’re strongly blah blah blah mwah mwah mwah to address this important blah blah committed to innovation mwah mwah in partnership with our customers blah blah get stuffed.

Oh, and one more thing: You don’t suppose that in the era of “cloud computing” companies might face any of the same dangers, do you? Except that instead of being controlled by IBM you’ll be controlled by Google? Could that be why Google is so excited about the cloud and is giving away all that free stuff?

Nah. No way. Couldn’t happen.

Thursday, October 8, 2009

Why IBM is in trouble with the antitrust police

Of course Microsoft is behind this government inquiry into IBM over antitrust issues. Ballmer is going nuts because he wants to own the glass house and for years he’s tried and failed to pry customers away from those fugly old mainframes. So now he’s turning to the government to fight this battle for him. Thing is, the government may have a case. Here’s why.

Frankly, this is a tough one for me because I hate both of these companies, the Borg and the Original Borg, so much. And for pretty much the same reasons. A love of mediocrity, treating customers like shit, stamping out competition. If there were some way that the government’s case could end up with both Microsoft and IBM being nuked off the planet, I’d call that a step in the right direction. Alas, probably not.

But yes, IBM is incredibly abusive to its customers. This shit has been brewing for years. I’m actually surprised that it took this long for the government to get involved. IBM drove everyone else out of the mainframe market, and as soon as they were the only game in town they began to squeeze the fuck out of their customers on pricing.

The customers have been howling for years, but it is almost impossible to migrate off a mainframe. IBM has made sure that this migration is so painful that you’d do almost anything to avoid it. Basically, IBM has got you by the balls, and they squeeze you on software pricing and maintenance pricing, and you literally have no choice. There’s no competition.

That’s why all of our big banks in the U.S. are still running mainframes. They can’t get off. It’s ridiculous. It’s as if all the major airlines were still using planes from the 1960s. Meanwhile new banks all around the world are all on newer platforms and have a huge advantage. So IBM is fucking over its own customers, forcing them to pay too much for compute power, and putting them at a huge disadvantage versus newer companies. Same is true for airlines — the old ones still rely on big shitty expensive mainframes, while the new ones, like Jet Blue, run new-age systems and save shitloads of money.

Better yet, once IBM got rid of the hardware competitors they set about consolidating the software business too. Read up on Compuware v. IBM. IBM was selling Compuware’s mainframe application software through its Global Services arm. They created a knock-off of Compuware’s program and started selling it cheap, practically giving it away, bundling it with other programs — the usual shit. Compuware sued. IBM dragged it out for years, during which time Compuware almost went out of business, because how could they sell their product when their only customers were IBM mainframe users and those guys were getting a clone of their product for nothing, or almost nothing? Finally, with Compuware on its deathbed, IBM settled the lawsuit for pennies.

Oh, these are not nice people, my droogies.

Then there are the clone upstarts — like Platform Systems, which came up with an emulator that would run apps that were created for the IBM mainframe OS. In other words, they gave you a migration path off the mainframe. IBM sued for patent infringement (just to fuck them up) and then eventually bought them and they were never heard from again.

Then there is T3, another cloner, which is also in a legal hassle with IBM, and partly funded by Microsoft. And yeah, the Borg won’t admit this, but they put money into T3 so they could pick this fight with IBM and draw them into an antitrust trap. Which now they’ve done.

The real story here is that this is about Microsoft trying to crack the glass house. They covet the billions that IBM makes with mainframes and have believed since the 1980s that they would one day take that business away from IBM. I distinctly remember getting high with Bill Gates in a hot tub at the Alexis Park during a Comdex in Las Vegas and having him tell me he’d control that market by the mid-1990s.

You have to hand it to IBM — they’ve done a brilliant job of defending the fortress, protecting the cash cow. They have to do this, because without mainframes, IBM is done. They’re out of the PC business altogether. A huge part of their services business revolves around servicing these big expensive mainframes. The mainframe is to IBM what Windows is to Microsoft — it’s the cornerstone of their business. Which is why Microsoft wants to destroy it.

So Ballmer is going nuts. He’s looking at all that money and he believes it should be his. He should be running the data centers for banks and airlines. It’s a fat market and Microsoft wants it. People think Ballmer is obsessed with Google — and he is. But this business, the glass house? This is the real white whale.

IBM will defend itself by showing how much the cost of MIPS has come down over the past N years. But the cost of MIPS statistic is misleading, because while the cost comes down, IBM keeps shoving more and more MIPS down the throats of its customers. How do they do it? Well, they roll out a new “update” of the OS, and it’s super MIPS hungry. They discontinue support for the old OS, and drive everyone to the new one, and the new OS forces you to buy 2x or 3x the MIPS you had before, even though you’re just running the same workload as before. In other words, this whole “update” is just a tax from IBM for being a mainframe customer.

To rub a little salt in the wound, IBM will put out a press release saying how they shipped a record number of MIPS this quarter, as if the world is all eagerly embracing the mainframe again, when really they just jammed those MIPS into customer sites. Then just for kicks they fuck their customers on software licenses and maintenance fees.

This is what mainframe customers have been screaming about for years.

So why don’t these aggrieved customers just switch if they’re so unhappy? Well, that’s kind of tricky when IBM either sues or buys up anyone that comes along with a migration path. And you can’t just up and move the whole data center. You need to do it in pieces. Guess what IBM does to you if you say you’re going to move part of your data center? What do you think happens to pricing on the rest of your data center, ie the stuff that’s still on the IBM mainframe?

Also, thanks to the magic of the big outsourcing craze from a few years ago, in many cases IBM Global Services is running the mainframes and data centers for its customers. In a lot of cases IBM even owns the data centers, and you may not even be able to migrate.

Even if you can, well, they’ll make sure that migration is painful as hell. Like, gee whiz, wouldn’t it be awful if during that migration your data center went down for 24 hours? Or 48? Maybe you ought to just stick with that good old reliable mainframe. Sure it’s expensive, but it’s a small price to pay for peace of mind.

This is how IBM operates — just like Tony Soprano. And that is how the mainframe still exists in 2009.

True confession: Way down deep, I secretly admire them. We all do. Ballmer, Gates, McNealy, all of us who came after IBM — we’ve studied them, and learned from them, and copied them.

They’re pioneers, really. And in a twisted way, they’re still the best at what they do. Not the tech. They suck at tech. But at the other stuff? No one can touch them.

Thursday, June 7, 2007

IBM, truly a good citizen

One day after they get busted by the SEC for misleading shareholders we find out they’re now in hot water with the IRS because they’re using some dodgy tax scheme to skip out on paying $1.6 billion in taxes. That’s billion with a B. See here. Jesus. How can it get worse? Next we’ll find out that these masters of innovation are borrowing billions and taking on debt to buy back their shares, in effect using their balance sheet to goose their EPS. Or we’ll hear that they sold supercomputers to our enemies to help them build nuclear weapons. Or maybe we’ll hear that they caused birth defects in kids and cancer in workers.

Yes, IBM, you are truly a great American company. And I’m a criminal who must be put in jail because of $20 million in backdated options that I never exercised. Riiiight.

Thursday, May 24, 2007

Apple’s market cap will exceed IBM’s

Within two years. So says analyst Georges Yared in this article. Right now we’re at about $100 billion and they’re at $160 billion. But they’re treading water and we’re just getting going. Another key difference of course is that we’re a tech company.

Friday, May 18, 2007

IBM’s latest "big bet"

Ever notice how every year or two IBM comes up with some big huge promise about some big huge way they’re going to generate big huge growth? Yesterday they told analysts they’re going to double their EPS by 2010. See here. This time the plan involves buybacks and screwing pensioners. And, um, they’re going to take on debt to buy back the shares. I think they call that taking out loans to produce earnings. Well, it beats trying to sell computers. What amazes me is that nobody ever holds IBM to any of this stuff. Remember this story from 2004 when Fortune reported IBM had a big plan to grow to $150 billion in revenues by taking over HR departments for their customers? Ahem. And yet these frigtards in the press just keep reporting whatever IBM tells them.

Thursday, May 17, 2007

IBM, your trusted computing partner

IBM has lost tapes containing thousands of records for former employees and some customers. See here. The incident happened Feb. 23 but in the spirit of radical transparency IBM didn’t cop to it until some of the victims leaked it to the press. Best line in the story is where IBM’s flack is asked how many people are affected and he says, “It’s a plural number.” IBM flacks, you are the best! IBM, the world’s largest provider of computer services, including storage and security, says it has looked really, really, really hard and still can’t find the tapes that mysteriously fell out of a vehicle and vanished into thin air. But as long as there’s nothing on them that’s relevant to any lawsuits, chances are they’ll probably be found at some point. On the other hand, if the tapes do contain information that might help an IBM lawsuit opponent, well, fuggedaboutit. Don’t believe me? Ask the dudes at Compuware.

Thursday, February 15, 2007

IBMer found in Second Life, refuses to come out

After an exhaustive manhunt lasting more than a week, renowned IBM computer scientist Dr. Irving Wladawsky-Berger surfaced yesterday in Second Life, saying he had decided to make the virtual environment his permanent home. He is playing shortstop for the Second Life Mets and has changed his name to an acronym based on his initials, DIWB, or “Dweeb.” Said his annoyed wife, Mrs. Dr. Irving Wladawsky-Berger: “Oh, that’s just Irving being Irving.” As we first reported here, scientists at Google and other Silicon Valley companies last week launched a huge effort to find DIWB, a much-revered figure in high tech. A Google Earth team spent days frantically searching satellite images in hopes of finding DIWB alive. In a rambling, often incoherent interview with CNET, DIWB said, “I found a place here in Little Havana that makes the best Cuban sandwich you’ve ever eaten, I swear to God, I’m not even kidding. And the brothels! Don’t get me started. I appreciate all the concern, but honestly, I’m not coming out.”

Monday, February 5, 2007

IBMer feared lost in Second Life

Just heard this from Jon Ive. Apparently renowned IBM computer scientist and tech “visionary” Dr. Irving Wladawsky-Berger has been missing since Saturday. Told his wife he was going upstairs to his office to play with Second Life — and never came out. Irving has been going around raving about this new virtual world, and now it looks like Second Life just got the better of him. Linden Lab has sent in a search team. Someone claims they saw someone who looks like Irving’s avatar going into some seedy Second Life neighborhood on Sunday night. No word yet but everyone is hoping for the best. Sergey Brin has a team of engineers scanning Google Earth images. IBM is putting out a statement thanking everyone for their help and prayers and urging people not to give up hope. Statement has to go through channels in Irving’s organization and then get vetted by IBM’s corp comm staff before a final run-through by Jon Iwata and then a quick zip through the executive management committee. Should have something out by the end of this week or early next, is what we’re hearing. Man, poor Irving. Weird thing is I just got email from him back in December telling me all about IBM’s strategy around open-source software. Great guy. Hope he’s okay in there.