IBM, Outsourcing and the IT Profession
This is a reaction to Robert X. Cringely's "Pulpit" of 28-Dec-2007: Leaner and Meaner Still: IBM's U.S. operations continue to shrivel. There are 3 parts to my comments: Will IBM Survice? Outsourcing IT as a Profession They are interlinked. Lou Gertsner set IBM on the road on "Services" and away from Mainframes. It looked promising. IT Services look very appealing on the Balance Sheet - nearly no investment (no tangible assets) and what seem to be good profits from turnover. The ROA and ROI (Return on Assets and Return on Investment) look great - until you take some other factors into account. Barriers to Entry for competitors are low. EDS under Ross Perrot came from nowhere to define and dominate the field - so can the next giant in the field. If your business model is "hire cattle and drive them till they drop" - you have no market differentiation. Same cattle, same drivers, same pay - same 'ol, same 'ol... The cattle aren't loyal...