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June 6, 1988


By CBR Staff Writer

After the lean years that IBM has experienced, it isn’t too surprising that chairman John Akers, discernibly smiled only twice during his all-too-rare visit to the UK yesterday, where he took time out to brief the press. The first smile came in response to an IDC prediction, wheeled out from a previous encounter, which said that IBM would have two quarters of losses before the end of 1989. While in the current competitive environment it may turn out that one quarter or another may not be as good as the last, I’d be very surprised if that forecast comes to pass, was fielded with a grin timed so well that the audience was inclined to believe him. And it was followed with a No, I wouldn’t put any money on that particular prediction, which helped to lay the forecast to rest at least until the end of 1989. The reason for his confidence seems to be that he has known for some time that IBM has been getting fat and lazy and needs to sharpen its edge – and that he is in the middle of a restructuring plan designed to make the the company leaner and fitter – putting more people from central staff back in the firing line. Akers meant by this that a greater number of IBMers should be selling, building or supporting machines, but an over-eager contingent preferred to hear what he did not say, which is that firing line meant firing people, against a 50-year old full employment policy. Akers for the umpteenth times put that prospect to rest. The new IBMers would be more entrepreneurial risk takers. And more risks will lead to more mistakes than in the past. To be charitable we think he meant to imply more small mistakes, and fewer monstrous gaffes like the 9370, which he managed to avoid mentioning throughout the presentation. He added: The decentralisation and new independence to the IBM operating companies has not gone far enough and will go further in the future. The other smile came when someone finally asked about the forthcoming mid-range Silverlake – or Olympic announcement, which he described as very significant with some evangelist fervour in his eyes. If he only smiled twice, the only other reaction was a definitive racing enthusiasm as he answered questions about IBM meeting the performance of the new top-end 5990 mainframe from Amdahl. Jolted out of his traditional reserve he blurted that IBM will have an improved top-end mainframe on the market just as fast as we can get it out of the labs. Listeners have to interpret this as the 3090 Model F range – or something rather better than the F had been intended to be, as opposed to the new architecture that Summit is expected to herald. A Summit processor would take far longer to line up than Aker’s enthusiasm suggested. But this would be the first time since the 3033 that IBM had been forced to respond by an Amdahl machine. His repeated injunction to watch the coming weeks, as opposed to months, endorsed this view, as did his references to the ESA Enterprise Systems Architecture successor to XA Extended Architecture, as the recently introduced architectural improvements which have differentiated our product line and have met with such a strong response. Open Software Foundation Much attention focussed on the forming of the Open Software Foundation, and on the recent deal with Dell Computer Corp, of Austin, Texas regarding retroactive fees for the IBM patents in the personal computer and licences for the Micro Channel Architecture, and Akers alluded to millions and millions of dollars, of IBM income from patent licences, preferably by negotiation, but through the courts if necessary. He said that the Open Software Foundation was in line with the expenditure and commitment that IBM had already made in Unix and insisted that IBM was not trying to create confusion in the marketplace. This would become clear as the weeks go by, which, said in the context of Unix, was taken by many as heralding a widening of IBM’s Unix product line, possibly to offering it as an option on the forthcoming Silverlake mid-range introduction. And then he was gone, leaving a whole host

of questions unasked. Akers’ visit is really to bolster morale among UK employees and to visit a few key UK accounts, which naturally he declined to name. No one had the temerity to ask if one of the visits would be to Tesco, where IBM lost UKP50m of business to Nixdorf recently, partly by dint of the Nixdorf chairman Klaus Luft putting in a personal showing in the pitch.

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