IBM to open up on global re-org TONIGHT - sources

CEO Rometty expected to go public on biz multi-fixes in Q4 conf-call


Execs at IBM are expected to go open kimono tonight about the company-wide re-organisation dreamt up by harassed CEO Ginni Rometty, according to company insiders and channel partners.

Just as some of us in Blighty will be getting ready for bed or – god forbid – watching Celebrity Big Brother, Armonk-based IBM will be lifting the covers off calendar Q4 financials after close of US markets.

According to our moles and some of the vendor’s nearest and dearest channel partners, IBM will not cover itself in glory for the second consecutive quarter, reflecting a company that remains in flux, pulled between old world computing and the new era of the cloud.

Then there's the fact that Big Blue is still making big iron hardware when more businesses are opting for standardised x86 kit; that its software unit is ostensibly a collection of bolt-on buys whose wares are sold by small software boutiques; and that services have been hit by fewer mega outsourcing contracts in the market.

In Q3, IBM reported “disappointing” numbers, according to Rometty, who jettisoned predecessor Sam Palmisano’s target of generating $20 earnings per share by 2015.

Once the latest numbers are out, Big Blue will be in “full re-org mode”, said one well placed person, “it [IBM] will announce it hasn't done that well again and ‘here is the fix’”.

Another contact that knows IBM inside out told us that the take-up of voluntary redundancy was considered a success – which tells its own tale – but those with skills deemed requisite were turned down.

As we previously revealed, IBM is slicing and dicing the organisation, moving away from three grand units of hardware, software and services to smaller divisions.

The main units we were told will include Systems, Global Technology Services, Cloud, Watson, Security, Commerce, Research, and Sales and Delivery. Mobility will overlay the business units.

The hardware and software channel teams will be integrated into the existing global Business Partner area.

Compulsory redundancies are then understood to be on the cards, even though the uptake of voluntuary redundancies was sufficient to have delayed the process at a local level.

“Overall, many, many heads will go,” said a source. But it is not yet clear how high Rometty’s axe will swing, and whether or not the company will take HP’s route by cutting tens of thousands of jobs. ®

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