Welcome to the Cloud Wars Minute — your daily news and commentary show, hosted by Cloud Wars Founder, Bob Evans. The next three minutes are packed with insights and perspectives around the “reimagination machine” that is the Cloud! Today’s Topic: After Selling its Healthcare Data Biz, What’s Going on at IBM?
0:10 – With IBM having just announced its Q4 earnings, Bob kicks things off by saying that he’s totally puzzled by some recent decision-making within the company. As some background: most prominent theme in IBM’s public communications strategy has been “hybrid cloud platform.” IBM seems to want to own this concept. And that’s all fine—the vast majority of companies in the world are going to want a hybrid cloud approach!
0:45 – The focus on hybrid cloud platform is one reason to which company leadership under CEO Arvind Krishna attributes the decisions they’re making about which business units to sell off within the somewhat bloated IBM portfolio. Bob says that Krishna is right to cut out portions of IBM that are no longer serving the company; there are many. But the way they’re currently approaching that paring-down makes little sense.
01:13 – Last week, IBM sold off its healthcare data and analytics business. Meanwhile, nearly every other leading cloud provider is surging into the world of data and analytics to enhance their offerings—and healthcare is one of the largest industries on the planet!
01:45 – Bob runs through a number of IBM’s business units that the company could have sold off instead of its healthcare data and analytics assets. First up is Transaction Processing Platforms—a unit that definitely has nothing to do with hybrid cloud platform, and that has been on a downward growth trajectory every since Arvind Krishna took over as CEO. And second, IBM’s Systems business, which represents a very tight tie to the past and has also been trending downwards.
02:15 – Bob shares the growth numbers he’s found for both the TPP and Systems units. Spoiler alert: they’re not good.
03:00 – In short, IBM had some clear “clunkers” in its portfolio that were begging to be cut. But instead, Krishna and co. got rid of a potentially high-growth business in a red-hot industry. Which raises the question: what the heck is going on at IBM?