IBM and Its Chip Strategy: More Than a Case Study. Now a Road Map to MBA Think Weakness

June 14, 2021

Technology companies have to be good at technology. When big outfits become consulting, services, and de-vestment operations, stuff happens. IBM, for many, is a technology company. That myth has been shattered, not for customers and not for oldsters put out to pasture to reduce costs, but to those at IBM. I have no dog in the IBM fight. I admit to be greatly entertained by the IBM Watson cognitive computing razzle dazzle. But even WebFountain, acquisitions positioned as smart software (no, I won’t mention a certain clustering company in the metasearch game), and open source code did not fool too many people. Example: The lucky doctors who were interviewed about cancer fighting. Enjoyable I believe — up to a point. Then hasta la vista and take the Sixth Avenue subway back to your office.

The information in “Why IBM Is Suing GlobalFoundries over Chip Roadmap Failures” contains a short, useful summary of IBM’s divestiture of its chip fabrication business. Here’s a comment from the article, which I found interesting:

IBM can’t transfer assets as part of a deal and then get mad when the “buyer” decides to sell.

I read this to mean that IBM decided to divest. The sale went through. Then the buyer made independent decisions. IBM, years later, decides to sue.

Here’s the MBA think weakness: We can sell, get cash, and let someone else worry about the technology our wizards couldn’t master given the IBM bean counter constraints.

The MBA think has morphed into lawyer thing. IBM lost control of its own technology because its MBA think generated one model with certain assumptions. Reality then intruded with quite specific facts. Now the fate of IBM rests with legal eagles.

What made IBM a dominant force was control. Give that up and what do you get? Let’s ask IBM Watson.

Stephen E Arnold, June 14, 2021


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