AWS shows Cloud is NOT a high-margin business

AWSearningsLast week Amazon.com was the first of the large cloud service companies other than Rackspace to finally break out revenue and expenses for its cloud operation. The market was cheered by news that Amazon Web Services (AWS) last quarter made an operating profit of $265 million with an operating profit margin of 19.6 percent. AWS, which many thought was running at break-even or possibly at a loss, turns out to be for Amazon a $5 billion business generating a third of the company’s total profits. That’s good, right? Not if it establishes a benchmark for typical-to-good cloud service provider performance. In fact it suggests that some companies — IBM […]

The Indiana Pi Bill, Ellen Pao, and IBM

IBMjapancoverThe Indiana Legislature is in the news for passing a state law considered by many to be anti-gay. It reminded me of the famous Pi Bill — Bill #246 of the 1897 Indiana General Assembly. There’s a good account of the bill on Wikipedia, but the short story is a doctor and amateur mathematician wanted the state to codify his particular method of squaring the circle, a side effect of which would be officially declaring the value of π to be 3.2.

The bill was written by Representative Taylor I. Record, sent to the Education Committee where it passed, went back to the Indiana House of Representatives where it […]

Reporter’s Notebook: Yahoo, IBM, IEEE and me

presspull

I haven’t been writing as much lately. This has been for several reasons, some of which may surprise you. It’s true I’ve had to spend a lot of time fending-off attacks from IBM corporate (more on that below) but I’ve mainly been at work on two secret projects. One is a new documentary series for PBS and the other a new technology startup I’m doing with a partner. The PBS series will be announced when PBS decides to announce it but most of the shooting is already done. The startup has taken the traditional VC route and looks, surprisingly, like it will actually be funded. Evidently if your idea is wild enough and […]

IBM is right, I am a gadfly


gadfly2gad·fly
ˈɡadˌflī/
noun
 
  1. a fly that bites livestock, especially a horsefly, warble fly, or botfly.
    • an annoying person, especially one who provokes others into action by criticism.

Sometimes being a gadfly is exactly what’s required. That’s certainly the case with IBM and has been for the almost eight years I’ve been following this depressing story.

Gadflies came up because IBM finally reacted today to my last column predicting a massive force reduction this week. They denied it, of course — not the workforce reduction but its size, saying there won’t be even close to 110,000 workers laid off — and they called […]

IBM’s reorg-from-Hell launches next week

Ginni_RomettyIBM’s big layoff-cum-reorganization called Project Chrome kicks-off next week when 26 percent of IBM employees will get calls from their managers followed by thick envelopes on their doorsteps.  By the end of February all 26 percent will be gone. I’m told this has been in the planning for months and I first heard about it back in November. This biggest reorganization in IBM history is going to be a nightmare for everyone and at first I expected it to be a failure for IBM management, too. But then I thought further and I think I’ve figured it out…

I don’t think IBM management actually cares. More on this later.

IBM […]