How Is IBM Even Still Around?

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I’m sure you’ve all heard about IBM. They’re one of the pioneers of the PC industry, but nowadays, virtually no one uses IBM computers. Yet, IBM is still one of the largest companies in the world with a market cap of over $100 billion, so how does IBM even make money? Well, throughout IBM’s history, they were almost always a B2B company as opposed to a consumer brand. This is quite ironic given that they’re most well known for their PCs in the 1980s, but this was actually the exception for IBM, not the norm. After the dot-com bubble burst, IBM sold off its PC division to Lenovo and they started focusing on their B2B business once again. This consisted of producing server racks, networks, databases, and setting up cloud infrastructure. All of these background functions allowed IBM to rise to prominence once again, but with the rise of competition within these markets, IBM is struggling once again. Their revenues have nearly halved within the past 10 years and it’s not clear if they can compete against the juggernauts like Amazon and Microsoft. This video explains the rise, fall, rise again, and fall again of IBM.

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Timestamps:
0:00 - The State Of IBM
2:20 - Founding IBM
5:25 - Industry Leader
8:36 - Painful Failure
11:29 - Resurrection

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Disclaimer:
This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.

[ZagiBob]

I’m a retired software guy who worked for 35 years on IBM mainframes. Your video is primarily based on the PC market and seems to ignore the impact mainframes had on IBM’s bottom line. So your premise of being surprised IBM is still around does not make sense to me. Still, I enjoyed it 👍

[benservey]

IBM: does something innovative
Everyone else: jumps into the market with a more competitive product
IBM: leaves market and does something innovative...

[hopelessdecoy]

Mainframes kept IBM in business, even today there are so many mainframes that make the backbone of our digital world.

[train_xc]

Simple.. IBM is still profitable and have loads of cash with minimal debt

[shadowninja]

FYI, the "IBM" of today is essentially the cloud company RedHat that IBM purchased a while ago. The old IBM legacy businesses are now Kyndryl, as IBM spun them off into a separate company around a year ago, and they're down 73% since the spinoff.

[Jeckkz]

IBM lost their way about 10 years ago, but they hold enough patients and other IP that keeps them profitable . They used to be a benchmark in service management in Australia, but poor leadership and decision making led them to offshore everything, and from there things just went backwards.

[gwgux]

I grew up around IBM in NY. My late father worked there until the mass layoff in the late 80s and all the friends of the family worked there too. I also worked there for my first IT job out of college and while it would take too long to go into details here, that was hell on earth and I'll never do it again. However, as someone who grew up with the IBM PC before we finally started getting computers from other companies, I'm very thankful for what they've done with the IBM PC and other products they have produced.

They are not the same company they used to be for sure by any stretch, but for what they DO make is still significant in the field of computer science. They so far removed from regular consumers that their inventions rarely reach the public eye, and lets be frank, you have to know a bit about computer science to understand what they're doing half the time these days. I think that's why a lot of people question why IBM is still around today. They've made more than a few mistakes over the years and I don't know how much longer they'll hold out given their current direction, but I can say they still make systems that are the lifeblood of many organizations from their mainframes, Linux systems, and AIX (UNIX) systems.

I work in the financial industry and our core servers that handle financial transactions for our customers are IBM systems. When we asked the vendor who developed the software to run on it, why they still use IBM as there are cheaper alternatives out there, they said the IBM PPC architecture for processing is something they prefer it and the reliability of IBM support have yet to be beat for this type of task. When people's very lives depend on these financial transactions happening reliably on a system that must be up 24/7 and no downtime is allowed, IBM was still the only company they could rely on.

I don't know how much they've looked at others for building the systems to run their software (I personally think they're just IBM fans or just don't want to re-write their code for other hardware), but there ya go. At least one reason why IBM will likely always be around in some form. IBM isn't the household name it once was and I don't think they have any plans to become the household name again, but they are still a big name in the IT space.

[truly]

Key to note however is where IBM has no brand loyalty with consumers, they have insane loyalty and branding with enterprise. They've got some of the best support + are better equipped to handle enterprise customers than most of their competitors, which keeps them strong.

They also still do innovate a bit (they have the first real viable quantum computer), and imo are potentially poised to do quite well.

They also kicked out most of the baggage into Kyndryl, leaving them (IBM) leaner and more focused.

[mosog]

The electronic world is very dynamic.
But I still admire them for their innovation.

[cashmere]

IBMer here :) The company at the moment, in my opinion, is looking at a more brighter future. Arvind has really focused on cutting loose some of IBMs annoying aspects and improving others, taking engineers away from time consuming patent work, allowing IBM softwares to be run on AWS marketplace, focusing IBM Cloud development etc. they have a ways to go but the atmosphere in the company is a lot more optimistic. IBM also went through some rebranding, spinning off GTS, and renaming GBS to IBM Consulting. The focus of the company is now the hybrid cloud market, which was the reason for the RedHat acquisition and make it clear to customers what the company actually sells.

[rayoflight]

IBM remain the consulting partner of choice for many Institutions.
They could pivot to research and high-tech applications once more, in the sector of nuclear fusion; Google is also in the fusion sector, but they are limited to the study of plasma dynamics, while IBM has a generalist approach: you may recall, they build the computer and all the hardware which piloted the Saturn V automatically- and it never failed, even when stuck by a lightning upon the Apollo XII launch...

[happytravelling]

IBM dominated the large computer systems business market for decades. I worked at IBM during the summers many years ago and we were told this story. The US govt wanted to buy systems for the census - there were 2 companies that could do it - IBM and Univac. There was a power failure that affected both systems and the deadline was approaching to deliver. Both IBM and Univac sent planeloads of people to fix the systems - they were susceptible to power failures. Only the IBM team completed the task on time. Not because they got their systems working, but because IBM had sent a team of accountants as well as engineers. You never heard of Univax after that event. It was the accountants that completed the task. My uncle was among those sent to work there. THAT is why IBM dominated the industry for so long. They didn't just sell machines, they sold solutions. Given all the years that they developed technology, they built a massive patent portfolio that serves as their main intellectual property portfolio and a large portion of their income.

[gijbuis]

I first started as a software engineer in 1971. In 1974 my employer (University of Amsterdam) allowed me to take home an IBM 5100 to hone my programming skills. But nobody remembers this fantastic machine any more. IBM became really well known with their first IBM PC in 1981 (I was in Las Vegas at the time when skywriters wrote "Thanks a million" celebrating the fact that IBM sales had just exceeded a million PCs.

[rohitghali]

I've seen many companies use IBM's cloud services. IBM is also leaps and bounds ahead in the quantum race. They released an SDK to write code for their quantum computers. You can hire their quantum computers and start running programs just like a regular cloud service. They basically have their own place in the market. I think they'll survive. Let's see.

[Call-me-James]

The driving force behind IBM has always been its salesmen. IBM salesmen were the best in the world, and they were extremely successful when selling to large corporate customers. But their marketing was just too expensive to sell anything to consumers, or even to small businesses. IBM's business model worked spectacularly well when mainframes were the only game in town, but fell apart when PCs began taking over jobs once handled by mainframes.

[chrisbirmele]

I worked at IBM in the early 2000's and even back then soon realised it was a dinosaur of a company. We had security guards handing out red post-it notes if anyone - during lunchtime - left papers on the desk or forgot to lock the laptop to the desk (with a steel cable!). Mind you this was on a secure floor, you couldn't get in without a pass .... Hated the place and left after 3 years, joined Microsoft for eleven years - what a breadth of fresh air! Hands down the best time of my career.

[michelleshaw]

IBM was always much more than its desktop PC business. It had its hands in every line of corporate computing you can think of - from hardware to software, consulting services, systems design, etc. The 5150 was more or less a throw-away design until it sold like hotcakes on them (the old IT adage used to be “nobody ever got fired for buying IBM”). IBM expected it to fail, and had no real plan for it to fit into their product range - which meant that the PC division was always a bit of a random appendage. As long as it made them money, they hung around, but IBM really didn’t understand that part of the market - which is why nobody really blinked when they sold the whole thing off to Lenovo.

By that point in time, IBM was getting out of the hardware game except for its mainframe business (which remains incredibly profitable for them because there’s one thing big mainframes do really well: transaction processing - and banking and credit card business is huge. While few people interact directly with mainframes anymore, they’re still there, and they still have a niche that they are valuable in.

Add to that a services side business that has been around for decades, helping customers with integration and custom software needs, IBM isn’t going away anytime soon.

[TW-ltvr]

Low-key was kinda surprised to even see this as a question. IBM is one of those companies that doesn't go away, they just get bigger and pull strings from the shadows.

[alpaykasal]

I love it when Commdore PETs and Commodore 64s make their way into non Commodore videos :) there are a few shots sprinkled in here

[rb]

IBM is present in the mainframe and midrange servers: Z, Power, etc