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The Decline and Fall of IBM: End of an American Icon?

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IBM is in serious trouble. Big Blue, as the company is known, tends to rely for its success on magical thinking but that magic ran out a long time ago. The company got in trouble back in the 1990s and had to hire for the first time an outside CEO, Lou Gerstner, to save the day. Gerstner pushed IBM into services with spectacular results but this hurt the company, too. As services have became commoditized IBM could only compete by offshoring the work and quality suffered. The other negative impact of Gerstner was his compensation which was for the first time in IBM
history very high. Only the Watson family had become rich running IBM with later CEOs like John Opel and John
Akers living comfortable lives with lots of perks, but they never got BIG RICH. That changed with Gerstner.
Sam Palmisano an IBM lifer followed Gerstner as CEO and followed, too, the Gerstner playbook. Palmisano retired three years ago with a retirement package worth $241 million, replaced by IBM's first woman CEO, Ginni Rometty, who certainly expects a comparable golden parachute. In order to achieve these numbers, though, IBM has essentially sacrificed both its customers and employees. In order to have ever growing earnings per share the company has cut labor to the bone, off-shored everything it can, dropped quality, deliberately underbid contracts to win them then not performed. IBM's acquisition policy is one of buying companies to get their sales then cutting costs to the bone and under-delivering. This and share buybacks have kept earnings growing until this house of cards recently began to fall.
Ginni Rometty, who will end up taking the fall for Palmisano's flawed strategy, has stated a very specific earnings goal for 2015 that she will destroy the company to achieve if she must. This book how IBM fell from grace, where it is headed, and what specifically can be done to save the company before it is too late.

293 pages, Kindle Edition

First published January 1, 2014

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About the author

Robert Cringely

3 books4 followers

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5 stars
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132 (33%)
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145 (36%)
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54 (13%)
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Displaying 1 - 30 of 43 reviews
86 reviews4 followers
June 15, 2014
Wandering around on the desert plains of Facts, this book desperately requires the oasis of an editor in order to survive. Cringely knows his stuff when it comes to IBM, but the book is written with the assumption the reader knows as much as the author - oftentimes things were referenced obliquely, hinted toward in a further chapter or just missing context entirely. I feel that If I were a regular reader of Cringely's blog (as well as well-versed in IBMemera such as the memoirs of former CEOs), the analysis would fit in quite nicely - but then, were I a dedicated reader I wouldn't need the entire last half of the book, which are literally just edited reader comments from various blog posts.

Essentially, the work suffers from a failure of narrative cohesion that leaves the story patchy. This is probably a decent primer to get soundbite-esque gobbits about the current state of IBM, but don't expect much.
Profile Image for Wesley.
65 reviews1 follower
July 18, 2014
I work in the industry so I found the book interesting. Other than size, you could substitute IBM for any number of the other services and technology companies that area making short sighted decisions and are losing their identity in the quest for ever cheaper labor.

A couple of critiques on the book itself. The author is a blogger, so the book read, and probably is, a compilation of his blogs. That makes it feel a bit scattered. Also, the book could have really been a pamphlet because so much information is repeated, and the last half of the book is just comments from readers of his blog. The section that bothered me the most was his "what IBM needs to do" chapter. I appreciate he has suggestions, but there is nothing that I see in his background that would suggest he has the experience or qualifications to tell someone how to run a company.
Profile Image for Rob Lenihan.
8 reviews2 followers
June 13, 2014
good book, but half of it are comments from ibmers and ex-ibmers about working there. Been here for 15 years so the comments were nothing new to me.
Profile Image for Larry.
765 reviews4 followers
June 22, 2014
From roughly 2005-2011 I worked at a company that outsourced
tech support to IBM Global Services. I was part of a software
development team but there were several team members, including
myself, who had a system administration background and we did
our own SA work.

When IBM entered the picture, our management told us that this
new arrangement would save the company money and would also
free us up from the SA drudgery and allow us to focus on our
core mission.

To make a long story short, things did not work out this way.
Where in the past we could do SA tasks ourselves or request help
from a teammate who had the best interests of our team at heart,
we lost root access and had to go through a process with IBM.
Tasks that formerly took minutes (add a new user) now took a day.
Tasks that formerly took a few days or a week (add NFS-mounted
disk storage) now took months. The relationship with IBM
greatly harmed our productivity and ability to deliver product
on time and within budget.

We had many bitter arguments with our management about this.
They would never admit there was any problem with IBM but would
only stress all the money we were saving, as compared to doing
this work in-house. Efforts to make them see the real costs
of the delays and problems caused by IBM were useless. It was
like talking to a brainwashed cult member. It's funny how this
works, but even when you see something with your own eyes, and
yet someone in authority is telling you the opposite, there's
this tiny kernel of doubt.

I have read Cringely's blog posts about IBM in the past, so the
material in this book wasn't totally new, but there's a lot more
detail here, especially in the second part of the book which is
culled from emails from IBM customers and employees. So, part of
my enjoyment of this book was the catharsis of being reassured I'm
not crazy and yes, there really is a huge problem with IBM that
many other people recognize.

I have fantasies about somehow using time travel to put a half
a dozen copies of this book in my hands back in 2005 to pass out
to my managers and directors, but I'm fairly sure it wouldn't make
a dent. The fix was in.

The truth is that it is not a pure perpetrator/victim relationship
between IBM and its customers. Upper management at my former
employer wanted to drink this Kool-Aide and people at this level
never admit they were wrong. Today I view it as a conspiracy
between the upper management of IBM and my former employer to
defraud pretty much everyone else involved.

If you have ever worked at IBM or have been a customer of IBM,
this book should be of keen interest.
Profile Image for Harlan.
127 reviews7 followers
July 1, 2014
Although it's a bit of a one-sided hatchet-job, there was enough interesting in this take-down of recent IBM management to be worth reading, for those interested in the success and failure of tech companies. Cringely certainly got enough access to current and ex-employees to build a compelling argument that IBM's problems are of its own making.
Profile Image for Arthur Rabinovitz.
87 reviews1 follower
December 14, 2014
Sad. Once a company responsible for so much. But this is what corporate America wants not good products but good market value.
Profile Image for Thomas Duff.
58 reviews4 followers
June 28, 2014
The Decline and Fall of IBM: End of an American Icon?
Robert Cringely

I'm a tech professional who specialized in IBM/Lotus software from 1996 through about 2012. I've read Robert Cringely's I, Cringely columns over the years, and watched how he documented the decline of IBM as a company where employees were respected and organizations received value for their money. The Decline and Fall of IBM: End of an American Icon? is Cringely's effort to take all his columns over time and present the material in a cohesive and comprehensive manner. With very few exceptions, I have to agree that his assessment is dead on (based on my observations and interactions with others), and the future does not look bright based on the path IBM is taking.

There are a number of factors that are contributing to the decline. One of the worst problems is the relentless cost cutting that lays off experienced employees and shifts their jobs overseas to untrained personnel. The problem is that while the trench workers are cut and/or overworked, the management structure and layers just continue to grow. The drive to get to $20 EPS by 2015 has decimated the morale and capabilities of staff, and it's tragic that no one in IBM management has stepped up to say that's a meaningless goal by a prior CEO and it's gutting the company. If there were only a handful of (ex-)employees sharing bad experiences, it might be tempting to think that it's only a minority of people who are complaining. But the numbers of stories are huge, and the examples are too many to be isolated incidents.

The current CEO is tossing big bucks at "the next big thing" to try and restore IBM to a dominant position as an industry leader. But until/unless those pan out (Watson and cloud come to mind), their execution on existing software and services continues to go downhill as they don't have the experienced staff any longer as they were "too expensive". The future will tell whether IBM or Cringley ended up being right on the outcomes, so it's not as the death of IBM is a done deal. But history is littered with large tech companies that are no longer around, and IBM is not "too big to fail."

If you are (or were) interested about or associated with IBM at some point, The Decline and Fall of IBM is an interesting read. The second half of the book is padded (in my opinion) with blog comments he's received on his articles. You could easily read those online if you were interested. But the first half of the book makes for some persuasive arguments.

Disclosure:
Obtained From: Amazon
Payment: Purchased
156 reviews
August 1, 2018
This is a good book by virtue of the fact that it exists; I'm not aware of other books skeptical of IBM's current situation and direction.

The book paints a convincing picture of a company where management does not know how to do the right thing (that is, in the author's opinion, deliver value to its customers), and is not particularly interested in doing so in the first place. The book also describes workplaces practices that would make (and apparently has made) many IT workers disillusioned, sad, and interested in other opportunities.

The author's opinions of what IBM should do differently sometimes seem under-informed; "Intel servers with Hadoop" is hardly a sufficient description of how IBM should be migrating their business from expensive mainframes to cheap, commodity servers, from either a technical or a business perspective. Also, fully half of this thin book is comments (almost all negative) on IBM from insiders. It makes the point through sheer repetition, but you're still left with only 90 pages of actual analysis.

Nevertheless, I found the overall thrust of the book -- that IBM is in decline -- convincing, even more so for the fact that this was a journalistic effort by an outsider disliked by IBM.
Profile Image for Jari Pirhonen.
452 reviews14 followers
March 6, 2016
Interesting analysis of IBM and why its days may be numbered. The book points out many current problems: a feudal culture, focus on billable hours, too many layers of managers, loosing expertise and skills via outsourcing, complex service organization and above all IBM's focus to do anything possible to reach it's 2015 earnings goal of $20 per share. I would have thought that some of the statements in the book are exaggerations unless I had seen many of the problems in practice. Recommended reading to all IBM customers and organizations thinking of making a deal with IBM. It's important to understand your service provider in order to make the most of the relationship. Wouldn't hurt if current IBM employees would read the book, too. The second half of the book is just (mostly IBMers) comments from the author's blog during 2007-2013.
Profile Image for Dan Becker.
19 reviews1 follower
May 21, 2016
I am an ex-IBMer. This is a good book to read about the troubled times of IBM. It summarizes the issues that IBM has had pivoting to new strategic directions and squandering leadership positions.

The first half of book is Cringely's writing: about 20% IBM history, and 80% of the failures of Gerstner, Palmisano, and Rommety. After the discussion and analysis, the second half of the book is emails and comments from disgruntled IBMers.

I thought Cringely's writing was sound. He has good quantification of how much IBM made, lost, and spend on failed projects and stock buy-backs.

The reader comments are a bit of overkill. Yes, they support Cringely's view, but about 10 summary emails would have worked as well, 100 were a downer to read.

Read it if you worked for a large company and want to hear how terribly mis-managed they can be.
Profile Image for Terry.
611 reviews17 followers
October 27, 2015
I wanted to read this book because Cringely generally writes fun technical articles and because IBM recently developed many top-tier technical products. I am disappointed. The book can be summarized by saying IBM's management is pathetically self-serving. Read that sentence thousands of times and you'll understand the humor and technobabble the book shares. I am disappointed. I wanted to learn the history of System 36 and other big iron, about AIX and Watson development. I wanted to learn how Power chips are produced and what makes these things different from competitors. I wanted to learn about what made IBM the best company in the world for many years. All I read was about how bad management is.
Profile Image for Trung Nguyen Dang.
312 reviews51 followers
December 6, 2016
The book "The Decline and Fall of IBM" by Robert Cringely is a bunch of sensational and controversial claims/writings by a blogger/journalist. Don't read it. The content is super opinionated, without concrete proof/evidence. For eg, he was criticizing that [1] Gerstner should have sold the network business to the SECOND highest bidder instead of highest bidder? Out of his mind; and [2] IBM's new pay structure by comparing the value of the houses that the previous CEO and Gerstner lived in (USD 3 mn vs 18 mn) ... seriously? Those are just rare instances where there seems to be some evidence, the rest were just claims. It's painful to read. I couldn't read past 3 chapters.
No wonder it has 3.5 stars from Amazon, which is very low.
1 review
June 5, 2014
Bob you have cut to the heart of the problem at IBM and IT industry.in general a must read for all.

Bob you have cut to the heart of the problem at IBM and IT industry.in general a must read for all.

A must read. I did not put it down until I finished. Bob not only reaches to the heart of the problem with IBM but the entire IT and even corporate America. I do hope that the.greed is.good folks start to understand after reading. As Napoleon said there are no bad soldiers just bad officers. Thanks for.the great read Bob.
Profile Image for Steve Sarrica.
118 reviews2 followers
April 7, 2016
I've been an avid Cringely reader for years. He's been following the IBM saga for just as long, if not longer. This book has a lot of good stuff about the management disfunction at IBM, and I found it a worthwhile cautionary tale, but it is a bit thin. The page count is padded out with user comments on the IBM story from the author's (very worthwhile) blog.

Referencing current IBM events, it is clear that the company is still on the destructive trajectory that Cringely details here. It's a shame, the company used to stand for something besides an EPS target.
Profile Image for Ben Pashkoff.
529 reviews11 followers
February 18, 2016
The first half of the reading section of this had me thinking that this might be one of the most important books on technical business to-date....but only the first half. After that it became more and more whining about how he could have made better decisions, and then the last real half of the book are reprints of Cringely columns!!! GIVE ME A BREAK! Sorry, from a 5 start rating for the first 25%, I have to lower this to a 3 star for filler.
Profile Image for Paul Boger.
176 reviews
February 6, 2015
Less a book than a collection of blog posts, revisited and barely edited. While the story, itself, is compelling, there is too little data here to feel trustworthy. Much of the book is compiled from blog comments, too, which are heavily repetitive and offer little additional insight. Basically, I paid for a really long article, unsourced and heavily biased.
Profile Image for Kelley.
116 reviews10 followers
February 18, 2016
It was ok

Today, in 2014, there are still almost no corporate file servers at IBM. Employees still attach files to e-mails or upload them to a Notes application or a web application.

Not true and other stuff not true. He has a very negative perspective which is not alway accurate.
Profile Image for David.
432 reviews5 followers
December 30, 2018
Things actually got worse at IBM since the book published...
Profile Image for Skip.
14 reviews21 followers
January 2, 2019
Not worth the time

So called book read more like a long winded op-ed column or opinionated blog post. Wasn't worth the time or money
1 review
September 28, 2021
I used to work for IBM Research between 1999 and 2005, so I could relate to many things in the book. Even though my experiences were quite different that those of people in the Global Services, I could also see the lack of vision and direction once Lou Gerstner left. What drove me out was the disconnect between Research and the actual products and customers. While we were having fun inventing new things, we did not have any real impact, and I left seeking purpose. Living in the Czech Republic most of those years, the continued outcry about offshoring U.S.A. jobs does not resonate well obviously. The statement, that there are enough IT experts in the U.S. is IMHO wishful thinking, since on my experience there are not enough IT people in the entire world.
The main thought of the book, that aiming at certain EPS is not a viable long term business strategy is spot on. The section about how IBM should reinvent itself is a bit naive in hindsight.
Profile Image for Chris.
142 reviews40 followers
December 31, 2018
One of the few business books I recommend widely.

If you have business ambition, 100 pages of Cringely will inspire you and, unlike most supposed business books, has actual human content. For managers, that includes food-for-thought from loyal but unhappy long-time employees, who might have some insight into what you are doing wrong.


I recommend it to economists because it's short and gives 1 account of corporatism, which is quite unlike "the market" you all talk so much about.
Profile Image for John Hawksley.
3 reviews
September 18, 2017
Not bad; Cringely seems to have something of the inside track on IBM. Definitely dissuaded me from considering them as an employer. Or an investment.
Profile Image for Ingo.
80 reviews1 follower
July 29, 2014
"I liked it" - kann man nicht wirklich sagen. Zumindest was den Inhalt angeht.
Ein interessantes Buch. Sicher nicht mit dem Ziel geschrieben 100% objektiv zu sein. Muss es aber auch nicht. Beschrieben wird die Geschichte der IBM und die Wirrungen der Agenda 2010 und Agenda 2015.
Muss sagen - ich mach mir um die Firma Sorgen. Ungestraft macht man solche Fehler nicht jahrelang. Wird interessant sein, wie groß der Knall sein wird, der da kommt, aber dass er kommt scheint unvermeidbar.

Interessant fand ich die Einblicke, wie übel IBM im Service Bereich teilweise mit den Kunden umgeht. Interessant ist aber auch das Kapitel über 'Financial Engineering'. Wenn es einen Bereich gibt wo IBM als Firma weltweit führend ist, dann sicher dort. :(

Die zweite Hälfte des Buches besteht aus Blog-Kommentaren - zumeist von IBMmern und Ex-IBMmern. Kann man durchstöbern, alllzu interessant fand ich das allerdings nicht. Drum gibt's nur 3 Sterne...
Profile Image for Martin Landry.
Author 14 books6 followers
August 12, 2014
Well worth the read if you are interested in the business of high technology, there are many facts and dates that I was unaware of. A similar sort of story could be written about many high-tech businesses, but only if one had the time to dig up all the events and names. I could not give the book five stars, however, for it would have benefitted from a good editing. There is repetition, and I found it somewhat disappointing that the second half of the book is all individual response posts from the author's website. I understand the need to document one's statements, and quoting a few posts is not necessarily a bad thing, but I found that I just couldn't read through all of the collateral. Definitely not "The Soul of a New Machine;" read the first part though, it's worth the price on its own.
Profile Image for Steve.
646 reviews20 followers
June 17, 2014
Lots of good reporting here pretty much predicting that IBM won't be around for much longer, and how it came to be. The book seemed a tad disorganized while I was reading it, and that's especially true in its second half, which consists of many emails or comments from readers of Cringley's blog.

At any rate, things are dire for IBM, and haven't been good for a long time. Cringely details how IBM has dug itself into a deep deep hole, and pretty much doesn't have a plan to get out of it. Kind of fun to read, unless you think Americans should be employed in interesting jobs.
Profile Image for Alan.
12 reviews5 followers
January 28, 2017
What a rant!

But I can't help but agree with Mr Cringley's views on the loss of market relevance that IBM is enduring and his thoughts on the loss of understanding the "why" of IBM. Something that is demonstrated through this book, and that I have also experienced through my own 20+ years of being a customer of IBM.

The author provides some pithy, sensible, advice for IBM and its customers- it will be interesting to see if it has any effect on either side! Worth reading to understand how IBM is perceived by so many of its own people.
9 reviews
August 3, 2014
The book provides a fair representation of the morale issues in IBM. However, there are some complications with the descriptions of the businesses, especially Services, which he lumps all together - when in reality there are several different lines of service businesses, with differing issues and management structures. I am glad I no longer work there.
Profile Image for Shon.
4 reviews
September 3, 2014
Pretty scary stuff and much of what happened/is happening sounded so similar to what happened at Novell that eventually lead me to leave. Then I remembered, Ron Hovsepian and Jeff Jaffe (CEO and CTO of Novell during that time period) were formally senior management at IBM, and the similarities made perfect sense.
Profile Image for Jo Oehrlein.
6,361 reviews9 followers
July 12, 2014
A summary of Cringe's reporting on IBM over the years and what's going wrong now.

50% of the book is user comments from the past 10 years or so, mostly from current or former IBMers.

Does make me wonder who is still buying anything from IBM.
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