The Decline of IBM

This video is meant to be a documentary to be enjoyed in one or more sittings. The question answered is: Why did International Business Machines decline?

Timestamps:
The Backdrop 1983-1993 (Was it really a mistake to go with Microsoft and Intel?) : 2:24
Lou Gerstner Years: 1993 - 2001 (IBM is a top player in everything tech!): 5:38
Sam Palmisano Years: 2002 to 2011 (Continuing the Gerstner Vision and missing the cloud!): 18:52
Ginni Rometty Years: 2012 to 2020 (Continuing the Gerstner vision and cutting costs!): 26:13
The Future and Arvind Krishna: 2020 to present (A bright future?): 32:34

What we can say is that despite the company still ranking as one of the largest companies in the world, it used to be the largest, touching many aspects of a consumer’s life. Today, IBM is a Business to Business (B2B) company that has been surpassed by many tech rivals including, Google, Apple, Amazon, Facebook. How did that happen?

Many people think IBM declined because of decisions in the 1980s where it licensed software from Microsoft and used Intel’s chips. This logic is flawed; coopetition is a good thing and technological innovation happens quicker when many people and companies work together. In addition, the Personal Computer (PC) was coming whether IBM was ready for it or not—therefore these partnerships allowed IBM to get its PC to market earlier than it would have otherwise. Of course, you could then push the mistake further back and say IBM invested too heavily in mainframes and not enough in PC’s, in the 1970’s, forcing it to partner with Microsoft and Intel. This lack of investment in the 1970’s was a mistake, but companies are allowed to make some mistakes.

Furthermore, IBM had ample opportunities to still win in these and many other markets. So, despite IBM falling behind in the PC market, at the start of the 1990’s, it was so much larger than many other tech companies, in terms of size, R&D spending and dominance, that it should have become the king again. It didn’t.

This is why our video focuses on IBM’s CEO’s and product decisions under Louis Gerstner, Sam Palmisano and Ginni Rometty. These CEO’s turned IBM from a tech giant into more of a services-oriented business. What these CEO’s, also, forgot is that the secret sauce of IBM’s services was that it was viewed much more favorably than other services company as it was renowned for its technology. Therefore, underinvesting in tech eventually also hurt is services business.

Despite all this negativity, optimistically, we are excited with who IBM chose as its CEO in 2020, Arvind Krishna may turn around IBM. We hope you enjoyed our video!

The Music in the video is the following:
1) Which Way Is Up? 1:59 Silent Partner Dance & Electronic | Dramatic
2) Gently, Onwards 3:27 ELPHNT Cinematic | Calm
3) Apprehensive at Best 0:03 / 1:42 Biz Baz Studio Cinematic | Dark
4) If I Had a Chicken 0:02 / 2:30 Kevin MacLeod Cinematic | Happy
5) White Hats 0:03 / 1:46 Wayne Jones Cinematic | Dark
6) Follow The Shadows 0:02 / 2:46 The 126ers Pop | Sad


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