It's make-or-break time for IBM's cloud

Whether rumored massive layoffs take place, IBM is in serious trouble when it comes to the cloud

According to a Forbes columnist, IBM is about to fire a bunch of people as part of an internal reorg code-named Project Chrome. Its cloud struggles are a key reason why IBM is having the kinds of difficulties that would lead to such layoffs.

[ Editor's Note: The author's firm, Cloud Technology Partners, is a business partner of several cloud providers, including Amazon Web Services, Cloudnexa, Docker, Google Cloud, and Rackspace. ]

The report of imminent massive layoffs at IBM has been circulating for several weeks, but Forbes says it's now about to happen. The report claims that about 26 percent of IBM's employees will be fired, with most gone by the end of February. (IBM has previously denied this report.)

The trigger? "This week's announcement of an 11th consecutive quarter of declining revenue for IBM. If true, Project Chrome is bad news. Customers and employees alike should expect the worst," says another Forbes article.

Whether or not a massive layoff is coming, IBM has a big problem to solve around the cloud: If the company succeeds in deploying public cloud services, it will cannibalize its existing business of on-premises services. Of course, IBM's on-premises services will be affected by the cloud regardless of what IBM does internally, as more clients use the cloud -- from IBM or another provider.

I'm very concerned about how IBM's leadership is handling this cloud transition. I see no fire in the belly or a drive into cloud computing. IBM innovates through acquisitions, such as SoftLayer, but that's a slow way to evolve, and there are signs that SoftLayer's not being easily digested into IBM.

For example, the recent departure of SoftLayer executive Lance Crosby is troubling because he's being replaced not by an innovative thinker but by longtime IBM executive Robert LeBlanc. LeBlanc will lead IBM Cloud, a new division that will try to speed IBM's progress in selling cloud services. To me, that translates into the same old, same old.

The shame of it all is that IBM has many smart people working for it, and I suspect more than few of them will be on the layoff list. Moreover, SoftLayer is a good public cloud offering.

What's needed is a complete reboot of the company, including new leadership and a renewed focus on innovation. IBM won't accomplish that by purchasing other companies. It needs to change from the inside out.

In its current approach, IBM's cloud efforts will suffer the death of a thousand cuts. Unfortunately, the company has too much legacy baggage that its leadership doesn't know how to manage. That leadership is short on new ideas and long on office politics. If they can't solve those problems, the first names on any layoff list should be those existing executives.

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