Home > News content

Another foreign enterprise "failed"? Did the closure of the Chinese Academy of Sciences defeat giant blue in 996

via:博客园     time:2021/1/27 18:23:10     readed:127

The closure of R & D business in China by well-known foreign enterprises has happened more than once, and almost every time it can become the headlines of science and technology media. The last time it caused a sensation was oracle bone inscriptions.

In 2019, the company announced the abolition of China's R & D center. Dissatisfied with the compensation agreement, some laid-off employees raised banners in Zhongguancun Software Park to protest. Further on, the failure of Nokia and Motorola in China has also caused controversy.

1. Why is there so little noise this time?

In fact, Academia Sinica, together with other laboratories, is a R & D institution set up by IBM in China. Although the Chinese Academy of Sciences was established as early as 1995, it has only a few hundred members, far less than the System Laboratory of thousands of people.

According to the information obtained by first finance, IBM China has recently adjusted its R & D organizational structure. In the future, it will integrate all R & D teams in China and report to Xie Dong, CTO of IBM Greater China. In addition, the R & D direction will also be more focused, focusing on the development of hybrid cloud and artificial intelligence technology.

According to the public information, the key areas of IBM China Research Institute are industry solutions, cognitive computing, computing and services, and the Internet of things. This is different from the direction that the company will focus on. From a strategic point of view, the closure of the Chinese Academy of Sciences seems reasonable.

2. Elephants have been dancing for 30 years, so they have to change their steps

Just the day before the news came out, IBM released its financial report for the fourth quarter of 2020. During this period, the company's total revenue was US $20.37 billion, a year-on-year decrease of 6.5%.

In this quarter, the company stripped off its infrastructure business, and the US dollar exchange rate also fluctuated greatly. If the above two effects were removed, the revenue decline expanded to 8%.

So far, IBM's overall revenue has declined for four consecutive quarters. Although the company said the reason for the decrease in revenue was that COVID-19 had led to a reduction in the long-term orders of the software sector, and that the company was confident of resuming growth in 2021, Wall Street obviously did not approve of this statement.

In the two trading days after the financial report was released, IBM's share price fell by 10%, and its market value fell by 11.8 billion US dollars (about 76.2 billion yuan).


IBM's share price fell precipitously after the fourth quarter financial report

Photo source: Yahoo Finance

In fact, IBM, as an IT management service company, should not have given such a bad answer during the epidemic.

Take zoom, the capital darling in 2020, as an example. The company focuses on telecommuting and specializes in remote video conferencing. Benefited from the surge in demand brought about by the epidemic, the company's revenue increased by dozens of times. The company's recent single quarter revenue was $772 million, far less than one twentieth of IBM's, but its market value surpassed the latter, reaching $114.371 billion.

In terms of the scale of transformation, Krishna's adjustment is no less than the three transformations in the history of IBM.

In the 1960s, IBM successfully bet on the computer and became the overlord of mainframe at one stroke, which also promoted the rapid development of the computer industry. In the 1980s, the PC developed by IBM became the architecture standard of personal computers in the future, which once again promoted the popularity of computers.

In the 1990s, legendary CEO Gerstner made a drastic transformation of IBM and successfully turned the company's business into it management service. Since then, IBM has ushered in 20 years of continuous growth, reaching the peak of market value in 2014. This is the most talked about one of the company's previous transformation, and even become a model for the business transformation of IT companies in the future.

However, after entering the second decade of the 21st century, IBM's basic business is constantly eroded by cloud computing. At its worst, the company had 22 consecutive quarters of revenue decline. In recent years, giant blue has been making great efforts in artificial intelligence, quantum computing and other cutting-edge technologies, but it is difficult to turn technology into practical business.

3. If the opponent doesn't talk about martial arts, how can he turn this time

Although defeated by cloud computing, IBM is not too late in this field. In 2007, IBM has begun to actively layout cloud computing services for enterprise users as one of its development strategies. In October of that year, IBM also cooperated with Google to provide hardware equipment and cloud computing courses to universities, hoping to accumulate talents in this way.

In addition, the development direction of IBM's cloud business is private cloud, which is different from the public cloud chosen by Amazon AWS, Microsoft azure and Alibaba cloud. The latter makes cloud computing service a standardized service, which customers can choose according to their actual needs. Private cloud makes cloud computing a part of enterprise IT environment, providing cloud computing equipment and service support to enterprises.

The two business models have their own advantages and disadvantages, so it is difficult to compare the advantages and disadvantages in the early development of cloud computing. Public cloud mostly serves small Internet companies and entrepreneurs. IBM's customers are more distributed in the field of infrastructure services, and the business development route and customer resources are more clear.


Market share of public cloud in 2019

Source: IDC

After entering the era of mobile Internet, cloud computing has become a new infrastructure. Due to the disadvantages of low flexibility and high management cost, private cloud not only loses the fast-growing group of start-ups, but also falls behind in technology leadership.

In 2013, IBM and Amazon competed for $600 million in cloud computing orders from the CIA. Although the latter's offer is $54 million higher than IBM's, the CIA thinks Amazon's technology solution is significantly better than IBM's. This led directly to the failure of IBM.

It is also from 2013 that IBM began to turn its cloud business into a hybrid cloud market combining public cloud and private cloud. In June of that year, IBM offered us $2 billion for softlayer to speed up the construction of public cloud infrastructure.

In addition, aspera, a high-speed transmission technology company, cloudant, a database company, bluewolf, a cloud service solution company, and RedHat, a cloud computing operating system company, are also included in IBM.


Source: IBM

On the other hand, the growth of the public cloud market will slow down from the second quarter of 2019. Amazon, Microsoft, Alibaba and Google are also turning their heads and preparing to continue fighting in the cloud trend of traditional enterprise business.

In this context, the business focuses on AI and hybrid cloud. Using private cloud resources to fight at home may be the best solution for giant blue. In IBM's view, this is a trillion dollar market opportunity.

Big blue's strategic vision is still promising. After the announcement of IBM's decision to spin off, Wall Street responded to the company's determination by raising the trading limit.


China IT News APP

Download China IT News APP

Please rate this news

The average score will be displayed after you score.

Post comment

Do not see clearly? Click for a new code.

User comments