Monthly Archives: January 2014

Does the sale of IBM’s hardware business signal the beginning of the end?

These days, the only computer that I personally own is an iPad. This happened because some years back, I developed an unhealthy fascination with unusual computers. This culminated with a purchase of a Digital AlphaServer 4100. It was a magnificent machine.

Alpha Server 4100

Alpha Server 4100

Unfortunately, as it turns out, it would also trip my electricity supply when I turned it on, and cost a small fortune to run, and only fitted in the kitchen, where it was universally unpopular. It had a ton of moving parts to go wrong, and I realized that my fascination with weird computers had to stop, so I donated it to the National Museum of Computing at Bletchley Park. I hope they took care of her. If you read this and work there, please let me know!

And so, one of the things that I realized at the time was that UNIX was dying – I realized this around the turn of the century. In the last 15 years, IBM has swallowed almost all of the UNIX market share and some vendors have simply left the market of been acquired: Digital, Silicon Graphics, NeXT, and yet others have lost massive market share: Sun/Oracle and HP/Compaq/Digital, to be specific. I called the HP Superdome as dead as a dodo in 2012 and if you think I was wrong, check this.

As for IBM, they have increased revenue in a declining market, which is in a very similar position to Pearson (the world’s largest book publisher), who are growing in a declining market. IBM’s UNIX hardware sales department is very profitable and ensures sell-on of even more profitable software products, and services to implement those software products. IBM likes high-margin and is an execution machine.

And so IBM sold off its low-margin PC business to Lenovo in 2005, which was an extremely smart move. Lenovo knows how to make good quality hardware at a good price and they are performing well, though at low margins: $584m operating income on $29.57bn of revenue in 2012. Both companies have prospered.

For the last few years, IBM and Lenovo have been dating, discussing the sale of its low-margin Intel Server business. From what I can see, IBM waited too long and only got $2.3bn, when they wanted much more – indeed they would have probably achieved double that, two years ago. The logic is – get rid of the low margin business and focus on the good stuff.

The technology market is a very tough place to be right now, and it’s very tough for a company like IBM to make good decisions. The biggest hardware players in the world now are the big cloud companies like Amazon and Google, both of which build their own custom data centers and don’t buy from IBM or HP.

But I question IBM’s decision. UNIX is a profitable market but a deceptive market. There are mission-critical use cases that use IBM’s System z and there will probably always be a market for certified, bulletproof systems. The thing that worries me is IBM’s middle ground – System p. System p is advocated by IBM as a low TCO UNIX environment, and that, to my mind, is a contradiction in terms. To add to that, IBM have combined System i (more mission critical than p, but not as much as z) with System p, to avoid the cost of developing yet another infrastructure.

Even worse, news outlets and IBM alike have referred to the Intel “System x” business as Low-End. SAP runs its entire business for 55,000 employees on one IBM System x3950 with 80 cores and 4TB of main memory. IBM sell a System x system with 4480 cores and 56TB of main memory. Don’t be fooled – System x starts at low end, but has systems that can solve the world’s hardest problems. I have no doubt that IBM didn’t want to sell this part, but Lenovo very smartly took it.

What I believe will happen is that companies will stop using HP Superdome, Oracle M-Series and IBM System p in the next 10-20 years, because they will move to the cloud – either in their own data centers, or in someone else’s cloud. There is no use case for “fairly” mission critical and whilst IBM is the clear leader in the UNIX market, it is a dying market.

So this leaves IBM without all of the Intellectual Property that made it – in my opinion – the finest Intel server manufacturer and with a declining server play. Lenovo will stop pimping IBM software and services in the medium term.

If there is one thing for which I have the utmost respect for IBM, it is its ability as a company to foster talent and reinvent itself and even when IBM was at the brink of bankruptcy – losing an impressive $16bn between 1991 and 1993, it managed to turn around its business and become one of the greatest technology companies in the world.

In the midst of this, IBM is focussing on its impressive Watson technology as a solution to part of this, whilst SAP HANA platform eats the DB2 database’s lunch. Note, I sell SAP HANA services, but the numbers back me up: HANA is growing in sales 80% year on year to just under $1bn in 2013, and IBM software grew 2.8% last year (they don’t break out DB2).

IBM has just posted its seventh consecutive quarter of decline. I dearly hope that Ginni Rometty has a master turn-around plan and IBM will once again rise from the ashes, because IBM is an incredible company that has survived where others have failed. But I worry that with all the other changes happening in the technology world whether selling off all IBM’s hardware business will be viewed as a mistake. We shall see.

 

 

Stuff that made my life easier in 2013

I’m not one of those people who waltzes out of bed looking sharp and organized. It’s an effort, and I have to build a set of systems to keep myself organized. Each year, I try to pick a few painful areas to try to improve a workflow, and sometimes things that just make your life easier fall into your lap.

Here’s a few I found in 2013 – a mix of People, Process & Technology!

Expensify

Did you ever have that pile of 100 small receipts that you never managed to expense? Yeah, me too. Expensify collects, collates and categorizes your business expenses. You can take photos of receipts (you pay $0.10 per scan and it adds this to your expense report), and it will reconcile it with your credit card statement automatically.

Then, you print an expense report and send it in. I still then have to manually enter my expenses into SAP (hint to SAP, buy Expensify and give the integration away for free), but I can throw receipts in the bin once they are scanned. Even better, it automatically generates IRS-friendly receipts for payments of less than $25 so you don’t have to track small payments at all.

I did get tripped up once I hadn’t done my expenses in a while and Expensify hides expenses older than 30 days by default. This meant I forgot to expense a bunch of things and got in a muddle.

TripIt

If you travel frequently, you’ll be familiar with the pain of collating travel plans. A single trip can have planes, trains, taxis, hotels and car rentals; this can get extremely frustrating to monitor. TripIt makes things easy – you just email your plans to [email protected] and it builds a trip for you, so you can lookup reservation numbers and keep track.

TripIt has a bunch of other nice functionality: it will keep you informed if the type of seat that you would like becomes available, it will inform you of flight delays, and ensure you get refunds available to you if you don’t fly.

I’d love to see TripIt add trip expense management that integrates with Expensify – this would be the cherry on the cake for me.

Amtrak Guest Rewards

In a world where airlines are either charging ($450 for access to US Airways?!) for access to clubs, Amtrak is not the place you would expect to lead in customer service!

Amtrak Guest Rewards is possibly the best rewards program. You collect points immediately at 2 for each dollar spent, or 500 for an Acela roundtrip, and 5000 points gets you a free one-way ticket. They often do special offers, double points, or right now they’re doing buy 3 get one free.

Then once you’ve racked up enough points in a year (10k gets you Select Plus, which is where you want to be), they start to treat you really well. You get free access to their Lounges (plus United Lounges) and they send free stuff in the mail like companion vouchers or upgrades.

And one of the nicest things is the lounges are often connected to the railway track by lift, so you can sit in the warm lounge sipping coffee, and then take a lift to the freezing track as the train rolls into the station.

Mint.com

Whilst we’re on the subject of web tools, I found Mint.com to be pretty cool. You connect it to your bank accounts and credit cards and it provides consolidated analytics on spend. You can create rules so it categorizes your spend.

It’s neat for looking for exceptions like making sure you got refunds, plus seeing where you are spending. Some people may not like the privacy implications, but I like it a lot. You may be surprised by where your money goes!

Lastpass

If you’re going to use things like Mint.com (or in fact any other online banking service) then you should consider Lastpass. It generates up to 100 character passwords which are individual for each website you use. I wrote about it here, because I like it so much.

I’ve also just added a Yubikey, which ensures that the websites that I only want to access from my laptop can only be accessed from my laptop. In this day of internet fraud, you can’t be too careful, especially when careful doesn’t cost you any inconvenience.

Amazon Prime

I have been a huge fan of Amazon Prime. It looks like Amazon have put the price up to $80 per year, have started to use USPS (which isn’t the best courier), and many Prime products are now expensive – so I’m not sure if I’ll be renewing, but it was great in 2013.

Knowing that you can get anything in 2 days, for free: you could reliably order goods on December 22nd and get them on December 24th – is awesome, when you live in the US. I used Amazon for pretty much everything I ordered online in 2013 as a result.

The free lending library and videos sounded good at the time, but I’ve rarely used them, despite there being a pretty good video app.

Sandisk Extreme Flash Drive

This is the first flash drive I have really loved – in the past, you had to choose between performance and price. For $45, you can get the 32GB Sandisk Extreme, which can write files as fast as your laptop can read them. In my job I often copy huge files to pass around the room, and this is a time saver.

Previously, you would have to pay $2-300 for a flash drive this fast, which is crazy money, but at $45, it is very affordable. Well done, Sandisk!

Polar H7 Heart Rate Monitor

Anyone that knows me know that I’m a fitness nut and a Big Data geek. I’ve had a few HRMs in the past, and I’ve hated them. In particular, the Garmin Forerunner 400 Series watch, which I bought to incentivize me to run the London Marathon, was a giant paste of money.

Usability is key to actually using technology, and Polar got this spot on with the Polar H7 Heart Rate Monitor. It connects to my iPhone with and comes with the Polar Beat app, which uses the iPhone’s GPS to plot your location when you’re running. It’s easy to use and it just works and it’s a fraction of the price of a watch.

I also added the Polar Smart Stride sensor, which is handy when you’re running on a treadmill because it calculates how fast you are running but isn’t really worth the money unless you only run on a treadmill.

Apple EarPods

You know, I’ve had a lot of earphones over the years. Noise Cancelling, in the ear, over the ear, through the ear (maybe not). In the end, the new Apple EarPods are my favorite. They’re inexpensive (which is handy when you break them often like I do), the microphone quality is great, and the sound quality is good. Plus they actually stay in my ears.

I wish they would last a little longer, but this is a me problem, not an Apple problem.

WordPress

I’m going to add WordPress to this list – in a world of horrible platforms like Jive Software, WordPress is a wonderful breath of fresh air. I use a self-hosted blog from Bluehost, who I thoroughly recommend, and I can setup a new domain at low cost in a few minutes, configure it with WordPress, and get started.

It’s easy to add themes, make it look good, and extensions like spam protection are really easy. Blogging and content management is a breeze and I always love writing a blog on this site.

Final Words

Each one of these things actually made my life a little easier in 2013. In a world where we have to do more with a fixed amount of time, anything that makes life easier brings a real smile to my face. Anything which is free, or low cost (and all of the things on the list are inexpensive) is even better.

So thank you to all the companies above that made awesome products, and have a great 2014!

What are your favorites? What should I look at for 2014?