Information technology: Computing, fast and slow

16. January 2015

Date: 15-01-2015
Source: The Economist

IBM is not about to go down, but life in the cloud will be tough

Rometty CCIBM’s Rometty dives into the cloud

SOME ingredients are missing: the ping-pong table, cheap furniture, and inappropriate T-shirts. But otherwise this could be a shared workspace for internet startups: people sit around long tables and in front of large screens; others lounge on bright orange couches; the walls are full of sticky notes saying things like “I’m happy” or “be yourself”—the products of a brainstorming session.

However, this office in a building in central London belongs to IBM, an information-technology giant long known for its buttoned-down culture and blue business suits. The new “interactive experience lab” is one of four, soon to be ten, such places where teams of employees from IBM and its customers jointly think up new online services and apps. Such projects, the firm hopes, will help it grow again.

IBM’s revenue has declined, year-on-year, for ten straight quarters. Its recent third-quarter figures were particularly disappointing: sales were $22.4 billion and earnings per share $3.68, both well below analysts’ expectations. One reason was that IBM had decided to pile on the bad news: it also scrapped its long-held goal of reaching earnings per share of $20 for 2015. When the firm reports fourth-quarter earnings on January 20th, analysts expect the numbers to look better, since global demand for IT appears to have strengthened. Read the rest of this entry »