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  1. Technology
January 6, 1987


By CBR Staff Writer

In the days of sailing ships, one of the terrors of the seas was the possibility of having one’s craft becalmed at 30 degrees North or South of the equator. These latitudes are characterised by undependable winds, which could cease for days at a time. With the sun beating down, and food and water becoming scarce, the hardy crews of ancient trading vessels would be faced with few options. One, when things got bad and sails were puffing in an uncertain breeze, was to jettison cargo and then, using longboats, tow the ship toward land, wind, or current that would propel it anew. One of the cargoes carried by many vessels crossing the 30th parallel was livestock, particularly horses. When becalmed, ships might well throw their loads of horses overboard to make the chore of towing easier. The sailors did not do this out of any disdain for equines. Rather, given a choice between the dumping of horses and, say, gold, the horses went to Davey Jones’ locker. Any captain that returned from abroad with a load of horses but no gold was not likely to get another charter. Even if the ship’s owners loved horses dearly, the gentlemen at Lloyd’s and their ilk were not going to pay on insurance policies unless logic prevailed over sentiment. IBM, becalmed for two years now, has begun to toss cargo overboard.

Old hands will walk the plank

Like captains of yore, its leaders don’t necessarily want to do this. But the good ship Big Blue is in the horse latitudes, or, perhaps, hoarse latitudes. All the sales reps have pleaded with customers until they grew hoarse, to little avail. The winds of commerce aren’t blowing IBM’s way. The d’Yquem-quaffers of Merrill and Morgan, in the manner of coffee-sippers at old Lloyd’s, are getting somewhat edgy because their ship hasn’t come in. A lot of cargo is going to be flotsam and jetsam before this little voyage is over. Hardware’s going swimming, that’s for sure. So are a lot of sailors. Whole factories are being turned into barnacle resorts. Still, the wind hasn’t picked up, and the oarsmen are doing nothing but calling sharks with their thrashing. Having made it official that the fourth quarter will be a wash, that old hands will walk the plank, and that new cargo will be brought aboard, IBM has hoped it will regain the confidence of customers and investors alike. But the peculiarity of the company’s circumstances – it hasn’t been this far off course since the Depression – has overwhelmed valiant efforts that would have succeeded under other conditions. Passionate speeches by the good ship’s officers won’t do the trick this time. The kind of wind it will take to fill IBM’s sails is not that emanating from the corporation’s official pipes. Users and stockholders want action, for talk is cheap but IBM stock is pretty expensive. Action is what they will get. The 4300s are sunk. Not only has IBM already started shipping 9370s months early (an accommodation to win over an airline that still uses some Sperry mainframes), but larger variations on the new theme are already being moved toward launch. 3090s, one of several albatrosses around the neck of IBM’s captain, will be renovated; perhaps users will then grow more fond of the cut of their jibs. Even the Personals, now famous for their beneficial effects on the balance of payments in Asia, will be set on a new course. But that is merely what will be run up one mast. On another one can see the Jolly Roger, or something like it. On close inspection, it’s not a flag at all, but the label on a tun of poison that may soon be offered to large segments of the former General Systems Division. Barring a spectacular change in the business climate, IBM will have to admit it is unable profitably to market its System/36, System/38, and similar systems to small accounts. Agents will be brought in where wingtippers can no longer tread. Value-added resellers, retailers, even third party computer dealers that IBM has heretofore refused big discounts will supplant the in-house sales force. The thousands of dismissals that will ensue may well be disguised as transfers, pr

omotions, retirements, or career counselling. IBM’s management, agonising over the choices it must make, will try to put the best face on things. For the distrust of potentially redundant employees could well rub off on the very people whose billions of clams power the great ship: customers. But the sails have already been set, the wheel turned. – Hesh Wiener

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