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IBM is moving in a sticky situation as many of the company’s old-line businesses have already been shut down or sold, while the units that are supposed to push future growth face stiff competition.
IBM has reported a marked slowdown in business in September and abandoned its 2015 operating earnings target.
The company also announced it will hive off its loss-making semiconductor unit to contract chipmaker Globalfoundries Inc.
Analysts and investors agree that relentless reinvention is something to strive for at Big Blue, but some of the moves tried by other old line technology companies — such as a split or a spinoff of weaker businesses — might not be tenable for IBM, which successfully reinvented itself into a services provider in the early 2000s.
Charles King, principal analyst at research firm Pund-It in California said, he didn’t expect to see anything of that magnitude coming from IBM in part because they have systematically divested some of the businesses that were a drag on earnings in the last decade.
The bad news comes trickling in. Its storage and server hardware and enterprise software sectors are slumping and the company faces growing competition in cloud computing from companies such as Amazon.com Inc.
The Company’s faster-growing cloud computing, mobile, business analytics, social and security services contribute 25% of its revenue.
Future spin-offs will likely be centered on its storage unit. IBM is also facing stiff criticism that it pursued buybacks at the expense of investment in new technology.
The company spent $13.5 billion to repurchase stock in the first nine months of the year, more than double its net income.
To add: The disappointing third-quarter results also raise questions about investors’ patience.
Senior officials of the company conceded that the market is different than the market that existed a decade ago.
The company is struggling to readjust to an ever more mobile and cloud business, which caught most of the industry by surprise.
Now Facebook to help you in disasters
Facebook is set to launch a tool that lets users notify friends and family that they are safe during or after natural disasters.
Christened as ‘Safety Check,’ the tool will be available worldwide to the social network’s 1.32 billion users on computers and mobile devices. This includes the basic “feature” phones many people still use to access Facebook, especially in developing countries.
How it works?
People already use Facebook to tell people they are OK after earthquakes and other disasters but Facebook says the Safety Check tool will make it easier.
It is the brainchild of a disaster message board that Facebook engineers created in 2011 following the earthquake and tsunami in Japan.
After activation by the users, it will determine their location using the city they have listed in their profile, the last location they’ve shared or the city where they are using the internet.
If they are in an area affected by a natural disaster, Safety Check will send them a notification asking if they’re safe.
If they say yes, their Facebook friends will be notified. There’s no option to say no. Users can also mark their friends as safe, but the friends have to approve it.