{"id":1853,"date":"2014-01-10T12:49:28","date_gmt":"2014-01-10T18:49:28","guid":{"rendered":"http:\/\/redmonk.com\/dberkholz\/?p=1853"},"modified":"2014-01-10T13:03:12","modified_gmt":"2014-01-10T19:03:12","slug":"ibms-billion-dollar-bets-mean-less-today-but-you-still-cant-ignore-them","status":"publish","type":"post","link":"https:\/\/redmonk.com\/dberkholz\/2014\/01\/10\/ibms-billion-dollar-bets-mean-less-today-but-you-still-cant-ignore-them\/","title":{"rendered":"IBM&#8217;s billion-dollar bets mean less today, but you still can&#8217;t ignore them"},"content":{"rendered":"<p>Yesterday&#8217;s <a href=\"http:\/\/www-03.ibm.com\/press\/us\/en\/pressrelease\/42867.wss\">news<\/a> about IBM creating a new Watson Group and investing $1 billion in it was surprising to me because the company just announced a different billion-dollar bet on <a href=\"http:\/\/www-03.ibm.com\/press\/us\/en\/pressrelease\/41926.wss\">Linux on its Power architecture<\/a>\u00a0back in September, another billion on <a href=\"http:\/\/techcrunch.com\/2013\/04\/11\/ibm-to-invest-1-billion-in-flash-technology-research-reflecting-obsolescence-of-hard-disk-drives\/\">flash memory<\/a> in April, along with another major investment in <a href=\"http:\/\/www.ibm.com\/ibm\/devops\/us\/en\/\">DevOps<\/a>\u00a0over the past couple of years. Not to mention its $2 billion acquisition of SoftLayer to develop a stronger cloud story. [Sidenote: Watson is IBM&#8217;s Big Data software aimed to do what IBM calls &#8220;cognitive computing.&#8221;]<\/p>\n<p>IBM initially made a big bang with its announcement of a <a href=\"http:\/\/www-03.ibm.com\/ibm\/history\/ibm100\/us\/en\/icons\/linux\/\">billion-dollar investment in Linux<\/a>\u00a0back in late 2000. Significantly, it was $1B to be spent in a single year, not some indeterminate future (best of luck verifying that).\u00a0<strong>Given the apparent acceleration in extremely large commitments by IBM, I\u00a0thought a couple of quick calculations were in order to put the recent ones in context.<\/strong><\/p>\n<p><span style=\"line-height: 1.5em;\">Inflation since 2000 puts $1B today at $739M in 2000 dollars (when IBM announced the billion-dollar bet on Linux). Furthermore, IBM&#8217;s net income (profit) doubled to $16.6B in 2012 from $8.1B in 2000. The inflation means a $1B bet goes only ~75% as far as it did in 2000, while the significance to IBM&#8217;s financials is roughly half of what it was back then. <\/span><strong style=\"line-height: 1.5em;\">In other words, a bet that was the size of an\u00a0<a href=\"http:\/\/en.wikipedia.org\/wiki\/800_lb_gorilla\">800-pound gorilla<\/a> is only 400\u2013600 pounds these days \u2014 but that&#8217;s certainly enough to crush most humans, as you might imagine some of its competitors to be. <\/strong><span style=\"line-height: 1.5em;\">IBM&#8217;s increasingly long series of billion-dollar bets continue to draw headlines, but you can&#8217;t ignore the reality that an investment like that is going to make a significant impact.<\/span><\/p>\n<p><span style=\"color: #888888;\"><em><strong>Disclosure<\/strong>: IBM is a client.<\/em><\/span><\/p>\n<div class=\"acc_license\"><a href=\"http:\/\/creativecommons.org\/licenses\/by-sa\/3.0\/\"><img decoding=\"async\" src=\"http:\/\/i.creativecommons.org\/l\/by-sa\/3.0\/88x31.png\" alt=\"by-sa\" \/><\/a><\/div><!--<rdf:RDF xmlns=\"http:\/\/creativecommons.org\/ns#\" xmlns:dc=\"http:\/\/purl.org\/dc\/elements\/1.1\/\" xmlns:rdf=\"http:\/\/www.w3.org\/1999\/02\/22-rdf-syntax-ns#\"><Work rdf:about=\"\"><license rdf:resource=\"http:\/\/creativecommons.org\/licenses\/by-sa\/3.0\/\" \/><\/Work><License rdf:about=\"http:\/\/creativecommons.org\/licenses\/by-sa\/3.0\/\"><requires rdf:resource=\"http:\/\/creativecommons.org\/ns#Attribution\" \/><permits rdf:resource=\"http:\/\/creativecommons.org\/ns#Reproduction\" \/><permits rdf:resource=\"http:\/\/creativecommons.org\/ns#Distribution\" \/><permits rdf:resource=\"http:\/\/creativecommons.org\/ns#DerivativeWorks\" \/><requires rdf:resource=\"http:\/\/creativecommons.org\/ns#ShareAlike\" \/><requires rdf:resource=\"http:\/\/creativecommons.org\/ns#Notice\" \/><\/License><\/rdf:RDF>-->","protected":false},"excerpt":{"rendered":"<p>Yesterday&#8217;s news about IBM creating a new Watson Group and investing $1 billion in it was surprising to me because the company just announced a different billion-dollar bet on Linux on its Power architecture\u00a0back in September, another billion on flash memory in April, along with another major investment in DevOps\u00a0over the past couple of years.<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false},"categories":[5,8,9,27,19,13,14],"tags":[],"class_list":["post-1853","post","type-post","status-publish","format-standard","hentry","category-big-data","category-devops","category-ibm","category-linux","category-marketing","category-open-source","category-operating-systems"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p23Tsn-tT","_links":{"self":[{"href":"https:\/\/redmonk.com\/dberkholz\/wp-json\/wp\/v2\/posts\/1853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/redmonk.com\/dberkholz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/redmonk.com\/dberkholz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/redmonk.com\/dberkholz\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/redmonk.com\/dberkholz\/wp-json\/wp\/v2\/comments?post=1853"}],"version-history":[{"count":0,"href":"https:\/\/redmonk.com\/dberkholz\/wp-json\/wp\/v2\/posts\/1853\/revisions"}],"wp:attachment":[{"href":"https:\/\/redmonk.com\/dberkholz\/wp-json\/wp\/v2\/media?parent=1853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/redmonk.com\/dberkholz\/wp-json\/wp\/v2\/categories?post=1853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/redmonk.com\/dberkholz\/wp-json\/wp\/v2\/tags?post=1853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}