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Stocks B / Berkshire Hathaway


Subject:  Re: IBM the lost decade Date:  1/3/2020  10:40 AM
Author:  longtimebrk Number:  246778 of 253539

" I am continuing to accumulate while collecting 5% dividends. My patience is being tested. I have low expectations.

10PE, 5% Dividends, retired large number of shares, Jettisoned low margin businesses, Multiple revenue streams (Cloud, AI, Consulting, Software), Global footprint.

I am hoping that Ginny will take a victory lap and hand over to Whitehurst in next few quarters and he injects a culture shock in IBM."

You may want to dig deeper. IBM has lost the cloud. AWS, Azure and either Google or one of the leading Chinese firms will have the share. IBM overpaid for Redhat and has suspended repurchases.

The case for hybrid and Redhat's competitive advantage is way overstated. Look at the pace of innovation at AWS and Azure. The DOD win for Azure is huge. AWS had the only other technically qualified cloud.

IBM's GTS business is in decline due to the migration to off-prem and commoditization of infrastructure services. The numbers don't lie. Ginni recently removed the leader of GTS in the hopes of igniting growth.

Watson for AI is not meaningful. Google , Amazon and Microsoft have superior offerings.

The consulting services business (GBS) is ok but not as strong as Accenture.

IBM has a jewel in their mainframe business and the growth is actually quite impressive given the installed capacity despite calls for the death of the mainframe.

Their Power systems business is ok but not material. China has stated a goal of NO US tech dependence.

IBM's software portfolio is weak. The Oldsmobile of today.

Not impressed with Whitehurst. Narrow. I don't think he will get the reigns.
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