IBM Australia suffers disaster quarter


blog Things haven’t been going well at IBM Australia recently. The world’s biggest diversified enterprise IT supplier is engaged in an ongoing war of words with a hostile Queensland Government over the Queensland Health payroll disaster, it’s had a high-profile e-health contract terminated, and its long-running contract at the Federal Department of Health and Ageing is having the ruler run over it. And now, according to this juicy article in The AustralianIT (we recommend you click here for the full story), things have gone from bad to worse:

“IBM Australia has recorded one of its worst quarterly results in its history, with profit plunging by 62 per cent on the back of a sharp decline in its money-spinning global technology services unit and a dispute with major client BHP Billiton.”

Like many people in the IT industry, we’ve got a love/hate relationship with IBM. This century-old technology giant has produced some of the greatest innovations the sector can boast, and some great people work there. IBM has its finger in virtually all of the Australian technology sector’s major pies, and it normally does a pretty good job at its work. But there is no doubt that it’s also plagued by internal bureaucracy and continues to struggle in some areas in a highly competitive market — for example, with respect to its Lotus/Domino collaboration suite. In any case, we hope this downward trend doesn’t last for IBM. The truth is that Big Blue is one of the bellwethers of the industry. When it suffers, many other organisations tend to suffer as well, so we hope it gets back on its feet soon.

Image credit: Patrick H, Creative Commons


  1. My experience with IBM (admittedly a long time ago) was that their services and hardware were very expensive. Another problem was ‘project creep’ where they would demand extra resources (most often personnel) to continue a project.
    [Sorry, Renai, but the word is “bellwether” not “bellweather” – the former originates from the wether (sheep) leading the flock; the latter is not a word.]

  2. I think many of the IT companies are in trouble trying to make their numbers at the moment. Getting a lot of vendor visits wanting to know our roadmap and strategy. An air of quiet desperation as they hunt around for coins behind the lounge…

  3. My experiences of IBM / Lenovo / the cheap versions of the Lenovo idea Pad that was sold to the Chinese = total interdepartmental crap.

    A beaurocracy of bullshit.

  4. IBM has quite a few problems, but to highlight some:

    – Expensive and incompetent workforce. You basically get grads or junior consultants who have no clue what they are doing, but you pay a massive premium for the brand

    – Outdated, poorly integrated products – heaps of acquisitions, very little capacity to get it all modernised and working..

    – Project management failures. Yes, it’s hard to deliver when your whole organisation is full of incompetent people. They are failing large-scale projects quite often, but most of these don’t get any press.

    And they are not alone. Accenture and other large competitors are also struggling on similar points. There are quite a few large Tier 1 organisations in Australia which wouldn’t deal with IBM anymore because of their habit of under-delivering and over-charging.

  5. I have recently left IBM after years of banging my head against a wall. They turn the simplest tasks into brain surgery with a spoon. The people that were once the innovators and creators are now all hollow, worn out and simply waiting to cash in there old school pensions. The new people are as a previous person commented cheap grads, or low level techs or PM’s that IBM charge out at a premium and get for the lowest pay possible. I can say that soon the endless processes, antiquated slow and poorly built lotus notes databases that you need to do anything wears down your soul. Customer are rorted with overpriced services, poorly managed projects (every simple projects needs a IBM PM).
    I had to get out…my career would have suffered as I too began to walk in with a vacant look on my face as I begin the day tangled in the red tape, processes and dealing with people that lost their way long ago.

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