{"id":5926,"date":"2014-05-31T12:27:55","date_gmt":"2014-05-31T18:27:55","guid":{"rendered":"http:\/\/www.zmetro.com\/?p=5926"},"modified":"2014-05-31T12:27:55","modified_gmt":"2014-05-31T18:27:55","slug":"why-ibm-is-in-decline","status":"publish","type":"post","link":"https:\/\/www.zmetro.com\/?p=5926","title":{"rendered":"Why IBM Is In Decline"},"content":{"rendered":"<p><A href=\"http:\/\/www.forbes.com\/sites\/stevedenning\/2014\/05\/30\/why-ibm-is-in-decline\/\">Steve Denning<\/a>: <\/p>\n<blockquote><p>It\u2019s been a striking week for IBM. In its June 2014 issue, Harvard Business Review (HBR) published an interview with IBM\u2019s former CEO Sam Palmisano, in which describes how he triumphantly \u201cmanaged\u201d investors and induced IBM\u2019s share price to soar.<br \/>&nbsp;<br \/>&nbsp;But IBM also made it to the front cover of Bloomberg Businessweek (BW) with a devastating article: \u201cThe Trouble With IBM.\u201d According to BW, Palmisano handed over to his unfortunate successor CEO, Ginni Rometty, a firm with a toxic mix of unsustainable policies.<br \/>&nbsp;<br \/>&nbsp;The key to Palmisano\u2019s success in \u201cmanaging\u201d investors at IBM was\u2014and is\u2013\u201cRoadMap 2015\u201d, which promises a doubling of the earnings per share by 2015. The Roadmap is what induced Warren Buffett to invest more than $10 billion in IBM in 2011, along with many other investors, who were impressed with the methodical way in which IBM was able to make money. (Buffett\u2019s investment was striking because of his long-standing and publicly announced aversion to investing in technology, which he confessed he didn\u2019t understand.)<br \/>&nbsp;<br \/>&nbsp;After all, IBM under Palmisano had doubled earnings per share in Roadmap 2010, and now it is \u201con track\u201d to do the same by 2015 under the leadership of Ginni Rometty, another long-time IBMer, who took over as CEO in 2012. She has embraced the Roadmap with as much gusto as her predecessor.<br \/>&nbsp;<br \/>&nbsp;Yet for critics of IBM like BW, \u201cRoadmap 2015\u201d is precisely what is killing IBM.  According to BW, IBM\u2019s soaring earnings per share and its share price are built on a foundation of declining revenues, capability-crippling offshoring, fading technical competence, sagging staff morale, debt-financed share buybacks, non-standard accounting practices, tax-reduction gadgets, a debt-equity ratio of around 174 percent, a broken business model and a flawed forward strategy.<\/p><\/blockquote>\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Steve Denning: It\u2019s been a striking week for IBM. In its June 2014 issue, Harvard Business Review (HBR) published an interview with IBM\u2019s former CEO Sam Palmisano, in which describes how he triumphantly \u201cmanaged\u201d investors and induced IBM\u2019s share price to soar.&nbsp;&nbsp;But IBM also made it to the front cover of Bloomberg Businessweek (BW) with [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts\/5926"}],"collection":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5926"}],"version-history":[{"count":1,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts\/5926\/revisions"}],"predecessor-version":[{"id":5927,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts\/5926\/revisions\/5927"}],"wp:attachment":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}