Dinosaurs Treading Water: IBM Inc.,

Let’s face it, in an age of economic repression, government is a competitor.  This remains the final explanation for why the U.S. economy is no longer dynamic.  The dismal rate of transformative companies and IPO’s match the reluctance contemporary c-suite leaders have for risk.  This is because our government uses the formative means of our market based economy to solicit and capture the very capital needed to sustain any great venture. The recent admonition of IBM is very revealing about the state of our political economy. If anyone still believes that taxes don’t matter, stop reading here, for the outperforming productivity gains American workers have enjoyed has come at the cost of growth itself.  We’re looking at the death of American dynamism, IF our neoliberal Keynesian political economy can’t muster the political leadership to thwart demise.

IBM’s recent dismal growth reflects just how difficult it remains for heavily capitalized industries to continue growing in an age of macro-prudential policy.  After having 21 quarters of failing year-over-year revenues, IBM has squeaked out 1% quarter growth.  This isn’t the crafty financialization of currency arbitrage that often underwrites the success of today’s tech giants.  This particular dinosaur is eking out a near death experience at the cost of profound loss of prestige.

When IBM began to reflect on its heritage, it discovered an inverse yield curve in value of its product line.  Computers and their appendages we’re becoming cheap commodities.  Its fixation on financial metrics wasn’t a sales pitch, it was a lifeline for a mature company experiencing a mid-life crisis.  Its clear that IBM’s leadership idolized revenue at the cost of clear identity (product) development.  Having arrived late to AI and cloud based computing, it harried along openly promoting marketing campaigns in the hope of a turn around that never arrived.  Witness its clear failure with capturing lucrative government contracts with CIA, and you see what happens when entire industrial fiefdoms idolize themselves in an age of digital revolution.  Selling off low end servers was only a small portion of IBM’s larger problem:  how to survive with an old core in decline.  New mainframe models isn’t what IBM needs.  What it needs is leadership that understands the social impact of digital mediums in an age of egalitarian revolution.

What IBM must do is refashion itself to incorporate a new paradigm of biologically led advancements in digitalization.  IBM’s future is found in hybrid relations between physics and cellular life.

How does it get there?

It should do what Dell did and go private.  It should match the contours of miniaturization by going small.  Light, lethal and fast.  The vision thing is often oversold, but IBM needs to move in a direction that can sustain new ratios of growth seen in other industries.  Currently its business model is tied to idolizing previous achievements.  By any measure, IBM remains a dinosaur tethered to lethargic business practices.

To move on, IBM needs to shed the contours that produced its heritage.  To succeed, IBM must first confront a nasty reality that it continues to evade:  financialized revenue masquerading as an adult jobs program.

If Elephants can dance, dinosaurs can swim.

Just ask the Pentagon!

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About William Holland

Systematic Theologian/International Relations
This entry was posted in Political Economy, Uncategorized and tagged . Bookmark the permalink.

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