> they consistently deliver low quality/bottom-tier services and products

I worked with IBMers. The main priority for a lot of them is to ensure continuous employment for themselves and their buddies. They'd add unnecessary complexity to a product to stretch out the development for another couple of years. And they work at leisure pace for tech. Actual 9 to 5, many coffee breaks. They can't compete.

Why in the world would economists need to study this? It's been known that large bureaucracies have been dysfunctional for over a couple of decades now if not centuries. The large reason is because 1) the incentives to do great work are not there (most of the credit for a huge company's success goes to the CEO who gets 100X the salary of a regular worker while delivering usually pretty much nothing) 2) politics usually plays a huge role which gives a huge advantage to your competition (i.e. your competition needs to spend less time on politics and more time on the actual product) and 3) human beings don't functionally work well in groups larger than 100-250 due to the overwhelming complexity of the communication needed in order to make this type of structure work. Incentives though I think are the primary driver - most people at companies like IBM don't have any incentives to actually care about the product they produce and that's the secret behind the ruin of almost every large company.

Edit: you also seem to be giving too much credence to Watson. Watson was actually mostly a marketing tool designed to win in Jeopardy and nothing else. It was constructed specifically to compete in that use-case and was nowhere near to the architecture of a general transformer which is capable of figuring out meta-patterns within language and structurally understanding language. You can read about Watson's design and architecture here if you're curious: https://www.cs.cornell.edu/courses/cs4740/2011sp/papers/AIMa...

Everything will make sense when you realize that IBM is a consulting company. They don't care about building great products. In fact building self-serve products will directly take away from their consulting revenue. They instead need to be good at marketing and selling their services. Watson was exactly that - a marketing demo that got them in the news cycle and helped them sell a giant wave of contracts under a single brand to unsuspecting CIOs of legacy non-tech companies. Every acquisition helps with this goal. Red Hat - locking companies into licenses and support contracts for the OS. HashiCorp & Confluent - locking companies into support contracts for their cloud infra.

> Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house

I do. I remember going to a chat once where they wanted to get people on-board in using it. It was 90 minutes of hot air. They "showed" how Watson worked and how to implement things, and I think every single person in the room knew they were full of it. Imagine we were all engineers and there were no questions at the end.

Comparing Watson to LLMs is like comparing a rock to an AIM-9 Sidewinder.

>Why do they keep doing the same thing again and again? How are they generating actual revenue this way?

IBM has a ton of Enterprise software, backed by a bunch of consultants hiding in boring businesses/governments.

They also do a ton of outsourcing work where they will be big enterprise IT support desk and various other functions. In fact, that side has gotten so big, IBM now has more employees in India in then any other country.

Your fascination seems hinged on the fact that IBM has "lots of talent to make ML/LLMs work" which judging by what they've put out so far and talk publicly about, is very far from the truth. Anyone who has a clue seems to (rightly) have left IBM decades ago, and left are business people who think "Managed to increase margin by 0.1%" is something to celebrate.

> Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic are doing, with in-house tools?

Leadership in IBM also thought that Watson was like what what OAI/Anthropic/Google are doing now. It wasn't. Watson was essentially a ML pipeline over-optimized on Jeopardy, which is why it failed in literally every other domain.

Outside of Jeopardy, Watson was just a brand.

They gave up on watson about 18 months before llm's popped up, and they have simply just not got enough cash on hand to compete. While the big boys grew fantastically bigger over the past 15 years as cloud happened ibm fumbled time after time and shrank ever smaller, and is now desperately hoping it can stay relevant. but in the end they just haven't got the resources to compete on that stage anymore.

Have you seen Office Space? I'm sure it was based on IBM

In Sweden, IBM makes a shit tonne of money from SAP implementation consulting.

They have some real money printers that most probably haven't heard of. IBM Maximo for example dominates some industries the way SAP and Salesforce does.

To add to that i think their R&D labs along with HPE were one of the few to innovate on the memristor and actually build some fascinating concept machines.If i rememeber HPE's was 'The Machine'.

Athough i think they just di/dont know how to adapt these to market that isnt a enterprise behemoth , rather than develop/price it so more devs can take a hold and experiment.

There are entire niches of us that make a living (not at IBM) making certain IBM products actually do what they're supposed to. From my vantage point I see essentially zero maintenance going on with their products. I sincerely don't understand the market (why do people keep paying hundreds of thousands to millions of dollars for non-existent support?) - but whatever.

I’m pretty convinced there is a bell curve of “understanding what IBM does” where idiots and geniuses both have absolutely no idea.

It really is probably that strangest company in tech which you think could be mysterious and intriguing. But no one cares. It’s like no one wants to look behind the boring suit and see wtf. From my low point on that bell curve I can’t see how they are even solvent.

We moved off HashiCorp's Terraform Cloud when they tried to hike the price 100x on us, although that was technically pre-acquisition I think (it was their move to resource-based pricing). In talking with our account manager, they basically said they only really cared about enterprise accounts, and that migrating away would probably make sense for us.

HashiCorp also changed their licenses to non-open-source licenses, but again I think this was technically pre-acquisition (I think as they were gearing up to be a more attractive target for an exit).

The argument has been made that the real value of RH lies in the people working there. And if IBM were to interfere too heavy-handedly, those people would just leave, and RH would become basically worthless.

Well, there is CentOS Stream:

https://www.centos.org/centos-stream/

And Fedora is still the upstream of RHEL, nothing changed there.

Former-Hashi employee here: there's a clear prioritization of enterprise products. So much so that I would not be surprised if they stopped supporting the Open Source projects entirely. That would be a big boost for the forks.

Red Hat has far more autonomy. We are not structured the same.

On the HR side — many good people are leaving; new hires have to be on-site for 3 days and located in 4 "strategic" locations in the US.

I migrated our company off Terraform to Pulumi as a direct result of the acquisition.

Gnome has stagnated significantly.

Every time an executive says AI the number goes up.

It's depressing how IBM always uses the same language with every single acquisition. They don't care about the actual tech, only the patents and the ability to resell it.

Event-driven AI decision making is the C-suite wet dream. A large % of major orgs run Kafka for their eventing systems.

Streaming, EDA can solve lot of data challenges for enterprise AI use cases

As I read the release, it just sounded like "something something something data, something something something AI."

AI is just the lastest buzzword. Everyone has it, because they have to. Don't look behind the curtain.

Anything today has to contain the word "AI" otherwise it simply won't be considered.

You can double your company's value by saying it's an AI company. Easiest, simplest way to create value.

They probably have cursor licenses

AI Agent for Kafka Consumer group

/s

I worked for a small company acquired by IBM in 2011. We had a good 5-6 year run where our product sales went up (largely because so many IBM people were selling it) and we were largely left alone. Once things slowed down a bit the IBM rot set in quick though. These days I think all that's left is a skeleton crew maintaining the obligatory long term contracts around the main product, every other part of the original company has been picked clean.

Yeah, they acquired the company I worked at and left us alone for a year or two. Each year would get worse though, and each year we swapped nearly all bureaucratic things around. Always a different way to do performance reviews goals, etc.

A lot of the successful projects at the original company are now dead.

It's also weird being in IBM, because if your "contract" ends they put you on the bench. Then you basically have to job hunt within IBM, and if you can't find anything within a month or so you are out. It's super weird.

Surely by now everyone, including non-developers and non-software people, know exactly what IBM is, and you don't sell to IBM/join IBM without knowing exactly what's about to happen. No one joins IBM today and thinks there will be a huge focus on customer satisfaction or focus on great product design, it's all about squeezing maximum profit out of products until you need to discontinue them because you chased away all of the customers.

>mind boggling Byzantine rules

Hint: by all means possible, make sure you are not the owner of (or manager of the person who owns) any assets beyond your personal laptop. If, for example, you end up being the owner of all the development and test servers of the original company, then it will become your responsibility to ensure that each OS (of each LPAR of each VM) is security compliant, is running the end-point asset manager, and has up to date OS patches, that the DASD is encrypted, and you must periodically show physical proof that the asset still exists and indicate where it's located- photos of assets tags or whatever. It will be your responsibility to dispose of the asset (with all associated paperwork) at the end of its life.

It helps if such machines are not actually on the 9. network, or are behind an internal firewall (then they don't care about the security compliance as much).

Yep, this is a classic acquisition story. You go from a hungry company out there to fight to succeed and join a big corp where most projects are just endless series of meetings people have about what they want to do without any real timeline or immediate plan to start.

The worst is when your sales team (and all of its super valuable institutional knowledge of your specific market) are cut, and all your management is laid off so that the new corp's managers (who have embedded themselves into the corporate bureaucracy like a trichinosis worm) can treat all your teams as free headcount.

Soon, your company, which was acquired for growth, can't do anything and turns into an albatross around the new corp's neck. So the layoffs begin.

I'm with a company that was acquired by IBM ~2.5 years ago. The internal systems are definitely rough, but for the most part it's business as usual.

I've heard chatter from our engineering leadership that IBM is trying to push some silly initiatives, but we've been able to prioritize the right work so far.

I also get more equity (one time award + employee stock purchase plan) than I did previously, and with how IBM stock has been performing lately this has been a net positive for me.

FWIW I have heard that IBM used to force their management style on acquisitions in years past, so perhaps this is a fairly recent shift towards a less hands-on approach.

    > ...and internal systems they have to use, whose sole purpose is to make sure nobody does anything

I hope Hashicorp survives. A few higher ups I’ve talked to there made it seem like IBM wants to learn from them, not force their old ways onto Hashicorp. We’ll see. That one is still pretty new.

In defense of Byzantines. Their rules and amazing diplomatic prowess is what let them be an empire for so long. The negative connotations to Byzantine comes from the negative perception the west had of them. Byzantines were very practical in regards to who they allied with.

IBM is designed to milk every last bit of money from their clients. So they need to add new products every now and then to add new money flows.

I've heard IBM is really just an external government agency. If you look at it through the lens of being acquired by a government bureaucracy, then your explanation makes perfect sense. IBM is too entrenched to fail and too poorly run to be acquired.

> They’ll meet often at the beginning to relive the glory days of pre-acquisition and recount times where they went went above and beyond for that important early customer.

Yeesh. Which level of hell is that?

Pretty bleak, and describes my experience to a T (although involving other companies). Has there ever been an example where a company has been acquired and culture/morale/conditions have actually improved rather than dissolved?

This feels like the kind of post you can only write with sombre experience.

There were a series of Dilbert comics that spoke to this.

Dilbert’s company buys an “artsy” startup (represented by a chap with a goatee and a ponytail).

Dilbert comments something like “We get your energy and skill, and we provide … an endless supply of 3-ring binders.”

To which the chap replies “I hear that if your name goes into a binder, you lose your soul.”

This is what is happening with red hat also?

I had friends that worked at a high-profile IBM acquisition a decade ago and this is exactly what happened.

That's a very cynical take. Unfortunately likely correct.

It's a fact that a publicly traded company is beholden to Wall Street and any time such a company would use their earnings for R&D the P/E and margins go down (i.e. spending more money to earn the same) and this is considered a negative signal at Wall Street and the company gets punished in the market.

So the only way a company can spend their earnings is to pay dividends or buy assets such as other companies, which then must be squeezed for margins.

More here:

https://www.cringely.com/2015/06/03/autodesks-john-walker-ex...

IBM isn’t really a tech company anymore. More of a legal trolling company that cosplays as tech.

They seem to primarily benefit from kickbacks in the form of both leasing and technical contracts for things like opening offices in a location for tax benefits or to promote local economy.

Then they see how far they can cut back their end of the contract after the first few months (e.g. Maybe we agreed to have 500 employees in an office, but since nobody is allowed in, we think we can get away with 100 employees.) Then this turns into trolling about how the contract never defines what in office means so can we offshore… Too much undefined confusion, so I guess we get to break the contract but keep what the mayor paid us… Then they just shut down the office and move on to the next location.

It seems like the local government must be in on these schemes for leasing. Otherwise this wouldn’t be going on for decades as it has been.

The other part of business, technical contracts, is similar except instead of leasing it’s providing some sort of infrastructure coverage for something big. It starts off with good faith fulfilling the contract. Then a few months later it’s like well we have a US military contract that demands US employees but US employees are too expensive. What if we offshore but all the traffic is technically going through a single US employee’s computer which is what the contract technically demands.

Then it turns into well we have offshore people working on this anyway, why not just give them direct access and we’ll have a US person overseeing them. Lay everyone else off.

Then they see how long they can get away with this until someone gets mad. Then they take one step back to see how close to the technical contract they can get while threatening to abandon the whole thing at the same time.

Along with this sort of atmosphere and attitude for the law, it seems we see them constantly doing everything possible to constantly fire old people or anyone else that has legally protected status. So you’ll get statistical analytics on ways to fire protected people based around the constant performance reviews with statistics being used to see how close groups of protected people can be removed without statistically breaking the law. Whatever that algorithm is.

That plays into just straight up cutting people, but it also goes into a lot of other subsystems of skirting the law, like if old people can’t relocate as easily then hopping offices and forcing people to relocate 5000 miles is a way they can be eliminated. Part of this might be moving people onto new teams and then saying that team has to be in office for some made up reason, and then firing them for not relocating or using some made up metric like badging timestamps to get them, or some other technicality like leaving for lunch 5 minutes early despite being a salaried employee which is reported as hourly because of tax trolling.

I don’t know how IBM still exists because from my perspective it’s pretty clear they’re breaking or at best on razor thin gray line on ice on just about every possible law you could break.

I led the engineering team of a large adtech company (TripleLift - order of hundreds of billions of events/day) and we evolved from self hosting Kafka, to paying a vendor (Instacluster), to migrating to RedPanda.

RedPanda was a huge win for us. Confluent never made sense to us since we were always so cost conscious but the complexity/risk of managing a critical part of our infra was always something I worried about. RedPanda was able to handle both for us - cheaper than Kafka hosting vendors with significantly better performance. We were pretty early customers but was a huge win for us.

We switched to Redpanda's BYOC product because we couldn't use Confluent Cloud (contractual reasons) and BYOC was a third the price of Confluent for Kubernetes while also being a managed service.

I've been pretty happy with RP performance/cost/functionality wise. It isn't Kafka though, it's a proprietary C++ rewrite that aims for 100% compatibility. This hasn't been an issue in the 2+ years since we migrated prod, but YMMV.

Maybe this whole thing it's because Snowflake acquired redpanda earlier this year: https://www.investors.com/news/technology/snowflake-stock-re...

Why didn't you ask to get the accounts provisioned?

I'm still convinced the vast majority of kafka implementations could be replaced with `SELECT * FROM mytable ORDER BY timestamp ASC`

Nothing wrong with Kafka. Time to build better abstractions on top of Kafka.

ATProto? (aka AT protocol, ATP, Atmosphere...)

Erlang/OTP!

What are the alternatives?

wait what do you mean? what's wrong with kafka?

This isn't the old times, you can expect the opposite outcome these days.

I know companies who would certainly have fired people for buying IBM, if they could have gone back in time to do so.

https://news.ycombinator.com/item?id=20053188 and https://www.computerweekly.com/news/252468013/MapR-collapse-... have some context on MapR's demise.

IMO they were simultaneously worse situated for near-real-time stream processing and for S3-esque cloud storage, areas Kafka and Confluent excelled.

And two years prior IBM acquired Ahana (PrestoDB SaaS). Totally agree that businesses need to much more carefully assess the risks of moving to these hosted open source platforms. Reminds me of when over a decade ago companies moved to Snowflake for their DWs because "our Teradata costs are out of control".

What does this mean?

Warpstream (by Confluent (an IBM company))

IBM paid a ~30% premium on the current stock price, so all shareholders (I imagine employees own a bunch of shares) will get a decent chunk of cash.

Some redundant departments (HR, finance, accounting and the like) will be downsized after the acquisition.

Engineering and product will be unaffected in the short term, but in a year or two the IBM culture will start to seep in, and that would be a good time for tenured employees to start planning their exits. That's also when lock-up agreements will expire and the existing leadership of Confluent will depart and be replaced by IBM execs.

It depends a lot on which org they go into, and the motivations of the P&L owner of that division.

IBM is a really big and diverse company, in a way fundamentally different from most other big tech. In a sense, it is completely incoherent to refer to them as a singular entity.

My opinions are my own. I worked at IBM like a decade ago in a role where I could see the radically different motivations of divisions.

From experience, and to slightly refute the sibling replied, good for the confluent peeps that get flagged as being essential to the acquisition, they'll get a retention bonus of 100-300% of base pay spread over three years. The cutting of staff will begin likely in the 3-5 year time frame.

IPO'd at 45, high of 90ish, sold at 30. It depends on the strike price for employees, but its not clear if its universally a good outcome.

Both.

IBM will likely give Confluent employees a large pay package, and then let them go after the merger.

They will get some money in the short term, but they better start looking for another job

edit: btw, it's typical for any acquisition/merger

Haven’t got the memo? Everything computing is AI now. If you want to sell it, that is.

Near-Real-time inference is a hot thing these days with Apache Flink, which is commercially supported by Confluent (not Confluence)

Redpanda has been a superior wire-compatible alternative to Kafka for years.

https://www.redpanda.com/compare/redpanda-vs-kafka

https://nats.io

Not a drop in replacement, but worth looking at.

https://pulsar.apache.org/

Apache Iggy seems like a project with a lot of momentum: https://github.com/apache/iggy

Do any of these alternatives make it easy to transition a system that is using Kafka Connectors and Avro?

`SELECT * FROM mytable ORDER BY timestamp ASC`

wait what's wrong with kafka?

it's a public company, read the quarterly reports