Cloud computing Subverts Server market: IBM will lay off 1500 people in Australia

Beijing Time June 20 news, according to foreign media reports, said IBM Australia plans to lay off 1500. Such a decision, analysts say, reflects the difficult transition period when corporate users open up to cloud computing and software as a service (Software-as-a-service), and the server market declines.

It is reported that this year, the number of jobs cut by IBM could reach 1200 to 1500 people – even more than the layoff plan of Ford Motor, which will quit Australian manufacturing in 2016. The rapid transition to cloud computing has changed the way enterprise customers buy technology, and IBM and traditional vendors, including Hewlett-Packard and Dell, have been hurriedly coping with the new situation.

IBM has its own cloud computing services and says it will focus on this fast-growing area. The IBM spokeswoman did not comment on the layoffs, but said that "IBM wants to invest in areas where growth can be achieved in the future: Big Data, cloud computing, social commerce and evolving mobile computing." IBM has always been accustomed to investing in transition and transition, so it is necessary to reorganize our skills so that IBM can take the lead in these higher-value areas, both in emerging markets and in mature economies. ”

IBM Australia is currently serving cloud customers through a data center in Sydney. It is reported that the data center was established in October 2012, in addition, IBM in Singapore also has a regional data center. Rivals, including Microsoft and Oracle, are also hoping to set up branches in Australia to quell concerns about data sovereignty.

Traditional manufacturers hit

Rodney Gedda, an analyst at technology firm Telsyte, said it was not easy to speculate on specific reasons because the decision was the result of a closed-door discussion by IBM, but on the whole, as corporate customers opened their arms to cloud computing and software services, Rodney Geda Traditional manufacturers like IBM have been hit a certain way.

Al-Qaeda said it would be wise for IBM to march into cloud computing services, but the process of transformation could be painful. "While this trend has opened up new business areas for the entire cloud service, it is inevitable that if you are a large company with a huge installation base, the emergence of new technologies can be disruptive, which may be one of the reasons why IBM needs to be downsized." ”

"If IBM were to be transformed, more focused on cloud computing or software as a service model, there might be less demand for some types of talent, and perhaps no more staff needed to support the infrastructure." ”

Many hardware vendors see cloud computing as a sales opportunity that not only sells servers to end users, but also supplies them to data centers. But al-Qaeda has different opinions, which he thinks is somewhat exaggerated.

"The key problem is that cloud service providers often want to improve system efficiency, and even personally participate in engineering design, and sometimes they will also look for OEM vendors to purchase customizable servers." These cloud companies will contact the device manufacturer and then customize the unique servers that meet their own environment. ”

"The cloud sector is moving, and traditional system vendors need to keep up with the delivery model." "But that doesn't mean that the traditional internal deployment model is dead, but they have to compete with other dynamic products, including software sales, infrastructure management sales and the entire ecosystem."

Hardware sales Plunge

The global hardware market is fast fading, and in Australia it appears to be more severe than elsewhere, according to the firm's Gartner data.

In the first quarter of 2013, Australia's server shipments, compared with the same period in 2012, fell by nearly 4.5%, and server revenues fell by 20%. In Australia, HP occupies a leading position in both equipment and revenue. IBM has the highest revenues worldwide, but in Australia the company is ranked after HP, accounting for 20% of total server revenue.

Global server sales have declined in the first quarter of this year, but the situation is much milder, with shipments falling 0.7% from a year earlier, and revenues falling by 5% per cent year-on-year, according to Gartner.

In addition to falling hardware sales, the rise of cloud computing and software as a service means that modern companies are less likely to buy all the technology they need from a single supplier, Telsyte analyst Al-Qaeda said. This situation, hit the traditional software and hardware manufacturers, including IBM, Dell, Hewlett-Packard and so on.

Coincidentally, HP also announced a round of large-scale layoffs, this May, the company said to analysts: the world will lay off 8%. As the world's largest PC and printer manufacturer, HP is more focused on products than IBM. Sales of desktop computers and laptops have plummeted, with shipments in Australia down 18% and a 11% decline worldwide, according to Gartner.

Meanwhile, Dell's privatisation process is twists, but in the server sector, the company is eating into HP and IBM's markets, with global market share rising from 14.9% in 2012 to 18%. The two rivals have dropped a few percentage points.

Al-Qaeda said this could be the result of higher Australian dollar exchange rates and other economic factors. SMH points out that IBM may consider transferring some of its jobs to New Zealand or Asia because of higher business costs in Australia. After a dismal first quarter of 2013 years, it was reported that IBM Australia would lay off 10% of its workforce and lay off 2% of the world.

In-depth analysis of IBM earnings

In the first quarter of March 31, 2013, IBM's total revenue amounted to $23.41 billion, compared with a net profit of $3.03 billion. In the same period of 2012, the two figures were 24.67 billion dollars and 3.07 billion dollars respectively.

According to IBM's 2012 annual report, the company's revenues in the Asia-Pacific region grew 2.6% per cent over the last year, to $25.94 billion trillion, while the high-growth markets, including Australia, grew 4.2% per cent year-on-year, and fell by 3.5% in the major markets.

IBM Global Services, the largest consulting department in IBM, has a revenue of $58.8 billion in 2012 and a 2.3% decline in technical services and business services.

IBM's hardware revenue has also slipped, with system and technology revenue down 6.9% to $17.67 billion a year. Software sector has become a bright spot, the annual revenue of 25.45 billion U.S. dollars, an increase of 2% per cent.

(Responsible editor: The good of the Legacy)