Monday, January 19, 2015

Information technology: Computing, fast and slow | The Economist

Final paragraphs from an IBM reality check

"Other analysts imagine a more pessimistic scenario: IBM is increasingly held back by its legacy business; it becomes less profitable because cloud services offer lower margins than the more customised IT services IBM is used to providing; and it steadily loses customers to newcomers, such as Amazon’s cloud-computing arm.

If this starts to look like it is happening, pressure will mount for Ginni Rometty, IBM’s boss, to take more radical action. It is unlikely that the firm will break itself up, as its rival HP has decided to do: IBM’s businesses feed too much on each other. But it could be forced to separate its old from its new businesses more clearly. Many of its clients are going for “two-speed IT”, in which they separate their faster-moving and more innovative IT needs (data-crunching, say) from more basic services (payroll processing, for instance). To keep them, IBM may need to do the same."
Information technology: Computing, fast and slow | The Economist
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