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Open source politics: IBM acquires Red Hat

IBM went down with Louis V. Gerstner Jr. .  It became it predator, and its predation first was directed on their own employees.

The second stage of destruction was under Palmisano

GoingGone , Friday, April 13, 2018 6:06 PM

As a 25yr+ vet of IBM, I can confirm that this article is spot-on true. IBM used to be a proud and transparent company that clearly demonstrated that it valued its employees as much as it did its stock performance or dividend rate or EPS, simply because it is good for business. Those principles helped make and keep IBM atop the business world as the most trusted international brand and business icon of success for so many years. In 2000, all that changed when Sam Palmisano became the CEO. Palmisano's now infamous "Roadmap 2015" ran the company into the ground through its maniacal focus on increasing EPS at any and all costs. Literally.

Like, its employees, employee compensation, benefits, skills, and education opportunities. Like, its products, product innovation, quality, and customer service.

All of which resulted in the devastation of its technical capability and competitiveness, employee engagement, and customer loyalty. Executives seemed happy enough as their compensation grew nicely with greater financial efficiencies, and Palisano got a sweet $270M+ exit package in 2012 for a job well done.

The new CEO, Ginni Rometty has since undergone a lot of scrutiny for her lack of business results, but she was screwed from day one. Of course, that doesn't leave her off the hook for the business practices outlined in the article, but what do you expect: she was hand picked by Palmisano and approved by the same board that thought Palmisano was golden.

People (and companies) who have nothing to hide, hide nothing. People (and companies) who are proud of their actions, share it proudly. IBM believes it is being clever and outsmarting employment discrimination laws and saving the company money while retooling its workforce. That may end up being so (but probably won't), but it's irrelevant. Through its practices, IBM has lost the trust of its employees, customers, and ironically, stockholders (just ask Warren Buffett), who are the very(/only) audience IBM was trying to impress. It's just a huge shame.

HiJinks , Sunday, March 25, 2018 3:07 AM
I agree with many who state the report is well done. However, this crap started in the early 1990s. In the late 1980s, IBM offered decent packages to retirement eligible employees. For those close to retirement age, it was a great deal - 2 weeks pay for every year of service (capped at 26 years) plus being kept on to perform their old job for 6 months (while collecting retirement, until the government stepped in an put a halt to it). Nobody eligible was forced to take the package (at least not to general knowledge). The last decent package was in 1991 - similar, but not able to come back for 6 months. However, in 1991, those offered the package were basically told take it or else. Anyone with 30 years of service or 15 years and 55 was eligible and anyone within 5 years of eligibility could "bridge" the difference. They also had to sign a form stating they would not sue IBM in order to get up to a years pay - not taxable per IRS documents back then (but IBM took out the taxes anyway and the IRS refused to return - an employee group had hired lawyers to get the taxes back, a failed attempt which only enriched the lawyers). After that, things went downhill and accelerated when Gerstner took over. After 1991, there were still a some workers who could get 30 years or more, but that was more the exception. I suspect the way the company has been run the past 25 years or so has the Watsons spinning in their graves. Gone are the 3 core beliefs - "Respect for the individual", "Service to the customer" and "Excellence must be a way of life".
ArnieTracey, Saturday, March 24, 2018 7:15 PM
IBM's policy reminds me of the "If a citizen = 30 y.o., then mass execute such, else if they run then hunt and kill them one by one" social policy in the Michael York movie "Logan's Run."

From Wiki, in case you don't know: "It depicts a utopian future society on the surface, revealed as a dystopia where the population and the consumption of resources are maintained in equilibrium by killing everyone who reaches the age of 30. The story follows the actions of Logan 5, a "Sandman" who has terminated others who have attempted to escape death, and is now faced with termination himself."

Jr Jr, Saturday, March 24, 2018 4:37 PM
Corporate loyalty has been gone for 25 years. This isn't surprising. But this age discrimination is blatantly illegal.

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[Nov 09, 2018] OpenStack is overkill for Docker

Notable quotes:
"... OpenStack's core value is to gather a pool of hypervisor-enabled computers and enable the delivery of virtual machines (VMs) on demand to users. ..."
Nov 09, 2018 | www.techrepublic.com

javascript:void(0)

Both OpenStack and Docker were conceived to make IT more agile. OpenStack has strived to do this by turning hitherto static IT resources into elastic infrastructure, whereas Docker has reached for this goal by harmonizing development, test, and production resources, as Red Hat's Neil Levine suggests .

But while Docker adoption has soared, OpenStack is still largely stuck in neutral. OpenStack is kept relevant by so many wanting to believe its promise, but never hitting its stride due to a host of factors , including complexity.

And yet Docker could be just the thing to turn OpenStack's popularity into productivity. Whether a Docker-plus-OpenStack pairing is right for your enterprise largely depends on the kind of capacity your enterprise hopes to deliver. If simply Docker, OpenStack is probably overkill.

An open source approach to delivering virtual machines

OpenStack is an operational model for delivering virtualized compute capacity.

Sure, some give it a more grandiose definition ("OpenStack is a set of software tools for building and managing cloud computing platforms for public and private clouds"), but if we ignore secondary services like Cinder, Heat, and Magnum, for example, OpenStack's core value is to gather a pool of hypervisor-enabled computers and enable the delivery of virtual machines (VMs) on demand to users.

That's it.

Not that this is a small thing. After all, without OpenStack, the hypervisor sits idle, lonesome on a single computer, with no way to expose that capacity programmatically (or otherwise) to users.

Before cloudy systems like OpenStack or Amazon's EC2, users would typically file a help ticket with IT. An IT admin, in turn, would use a GUI or command line to create a VM, and then share the credentials with the user.

Systems like OpenStack significantly streamline this process, enabling IT to programmatically deliver capacity to users. That's a big deal.

Docker peanut butter, meet OpenStack jelly

Docker, the darling of the containers world, is similar to the VM in the IaaS picture painted above.

A Docker host is really the unit of compute capacity that users need, and not the container itself. Docker addresses what you do with a host once you've got it, but it doesn't really help you get the host in the first place.

A Docker machine provides a client-side tool that lets you request Docker hosts from an IaaS provider (like EC2 or OpenStack or vSphere), but it's far from a complete solution. In part, this stems from the fact that Docker doesn't have a tenancy model.

With a hypervisor, each VM is a tenant. But in Docker, the Docker host is a tenant. You typically don't want multiple users sharing a Docker host because then they see each others' containers. So typically an enterprise will layer a cloud system underneath Docker to add tenancy. This yields a stack that looks like: hardware > hypervisor > Docker host > container.

A common approach today would be to take OpenStack and use it as the enterprise platform to deliver capacity on demand to users. In other words, users rely on OpenStack to request a Docker host, and then they use Docker to run containers in their Docker host.

So far, so good.

If all you need is Docker...

Things get more complicated when we start parsing what capacity needs delivering.

When an enterprise wants to use Docker, they need to get Docker hosts from a data center. OpenStack can do that, and it can do it alongside delivering all sorts of other capacity to the various teams within the enterprise.

But if all an enterprise IT team needs is Docker containers delivered, then OpenStack -- or a similar orchestration tool -- may be overkill, as VMware executive Jared Rosoff told me.

For this sort of use case, we really need a new platform. This platform could take the form of a piece of software that an enterprise installs on all of its computers in the data center. It would expose an interface to developers that lets them programmatically create Docker hosts when they need them, and then use Docker to create containers in those hosts.

Google has a vision for something like this with its Google Container Engine . Amazon has something similar in its EC2 Container Service . These are both API's that developers can use to provision some Docker-compatible capacity from their data center.

As for Docker, the company behind Docker, the technology, it seems to have punted on this problem. focusing instead on what happens on the host itself.

While we probably don't need to build up a big OpenStack cloud simply to manage Docker instances, it's worth asking what OpenStack should look like if what we wanted to deliver was only Docker hosts, and not VMs.

Again, we see Google and Amazon tackling the problem, but when will OpenStack, or one of its supporters, do the same? The obvious candidate would be VMware, given its longstanding dominance of tooling around virtualization. But the company that solves this problem first, and in a way that comforts traditional IT with familiar interfaces yet pulls them into a cloudy future, will win, and win big.

[Nov 03, 2018] Is Red Hat IBM's 'Hail Mary' pass

Notable quotes:
"... if those employees become unhappy, they can effectively go anywhere they want. ..."
"... IBM's partner/reseller ecosystem is nowhere near what it was since it owned the PC and Server businesses that Lenovo now owns. And IBM's Softlayer/BlueMix cloud is largely tied to its legacy software business, which, again, is slowing. ..."
"... I came to IBM from their SoftLayer acquisition. Their ability to stomp all over the things SoftLayer was almost doing right were astounding. I stood and listened to Ginni say things like, "We purchased SoftLayer because we need to learn from you," and, "We want you to teach us how to do Cloud the right way, since we spent all these years doing things the wrong way," and, "If you find yourself in a meeting with one of our old teams, you guys are gonna be the ones in charge. You are the ones who know how this is supposed to work - our culture has failed at it." Promises which were nothing more than hollow words. ..."
"... Next, it's a little worrisome that the author, now over the whole IBM thing is recommending firing "older people," you know, the ones who helped the company retain its performance in years' past. The smartest article I've read about IBM worried about its cheap style of "acquiring" non-best-of-breed companies and firing oodles of its qualified R&D guys. THAT author was right. ..."
"... Four years in GTS ... joined via being outsourced to IBM by my previous employer. Left GTS after 4 years. ..."
"... The IBM way of life was throughout the Oughts and the Teens an utter and complete failure from the perspective of getting work done right and using people to their appropriate and full potential. ..."
"... As a GTS employee, professional technical training was deemed unnecessary, hence I had no access to any unless I paid for it myself and used my personal time ... the only training available was cheesy presentations or other web based garbage from the intranet, or casual / OJT style meetings with other staff who were NOT professional or expert trainers. ..."
"... As a GTS employee, I had NO access to the expert and professional tools that IBM fricking made and sold to the same damn customers I was supposed to be supporting. Did we have expert and professional workflow / document management / ITIL aligned incident and problem management tools? NO, we had fricking Lotus Notes and email. Instead of upgrading to the newest and best software solutions for data center / IT management & support, we degraded everything down the simplest and least complex single function tools that no "best practices" organization on Earth would ever consider using. ..."
"... And the people management paradigm ... employees ranked annually not against a static or shared goal or metric, but in relation to each other, and there was ALWAYS a "top 10 percent" and a "bottom ten percent" required by upper management ... a system that was sociopathic in it's nature because it encourages employees to NOT work together ... by screwing over one's coworkers, perhaps by not giving necessary information, timely support, assistance as needed or requested, one could potentially hurt their performance and make oneself look relatively better. That's a self-defeating system and it was encouraged by the way IBM ran things. ..."
Nov 03, 2018 | www.zdnet.com
Brain drain is a real risk

IBM has not had a particularly great track record when it comes to integrating the cultures of other companies into its own, and brain drain with a company like Red Hat is a real risk because if those employees become unhappy, they can effectively go anywhere they want. They have the skills to command very high salaries at any of the top companies in the industry.

The other issue is that IBM hasn't figured out how to capture revenue from SMBs -- and that has always been elusive for them. Unless a deal is worth at least $1 million, and realistically $10 million, sales guys at IBM don't tend to get motivated.

Also: Red Hat changes its open-source licensing rules

The 5,000-seat and below market segment has traditionally been partner territory, and when it comes to reseller partners for its cloud, IBM is way, way behind AWS, Microsoft, Google, or even (gasp) Oracle, which is now offering serious margins to partners that land workloads on the Oracle cloud.

IBM's partner/reseller ecosystem is nowhere near what it was since it owned the PC and Server businesses that Lenovo now owns. And IBM's Softlayer/BlueMix cloud is largely tied to its legacy software business, which, again, is slowing.

... ... ...

But I think that it is very unlikely the IBM Cloud, even when juiced on Red Hat steroids, will become anything more ambitious than a boutique business for hybrid workloads when compared with AWS or Azure. Realistically, it has to be the kind of cloud platform that interoperates well with the others or nobody will want it.


geek49203_z , Wednesday, April 26, 2017 10:27 AM

Ex-IBM contractor here...

1. IBM used to value long-term employees. Now they "value" short-term contractors -- but they still pull them out of production for lots of training that, quite frankly, isn't exactly needed for what they are doing. Personally, I think that IBM would do well to return to valuing employees instead of looking at them as expendable commodities, but either way, they need to get past the legacies of when they had long-term employees all watching a single main frame.

2. As IBM moved to an army of contractors, they killed off the informal (but important!) web of tribal knowledge. You know, a friend of a friend who new the answer to some issue, or knew something about this customer? What has happened is that the transaction costs (as economists call it) have escalated until IBM can scarcely order IBM hardware for its own projects, or have SDM's work together.

M Wagner geek49203_z , Wednesday, April 26, 2017 10:35 AM
geek49203_z Number 2 is a problem everywhere. As long-time employees (mostly baby-boomers) retire, their replacements are usually straight out of college with various non-technical degrees. They come in with little history and few older-employees to which they can turn for "the tricks of the trade".
Shmeg , Wednesday, April 26, 2017 10:41 AM
I came to IBM from their SoftLayer acquisition. Their ability to stomp all over the things SoftLayer was almost doing right were astounding. I stood and listened to Ginni say things like, "We purchased SoftLayer because we need to learn from you," and, "We want you to teach us how to do Cloud the right way, since we spent all these years doing things the wrong way," and, "If you find yourself in a meeting with one of our old teams, you guys are gonna be the ones in charge. You are the ones who know how this is supposed to work - our culture has failed at it." Promises which were nothing more than hollow words.
geek49203_z , Wednesday, April 26, 2017 10:27 AM
Ex-IBM contractor here...

1. IBM used to value long-term employees. Now they "value" short-term contractors -- but they still pull them out of production for lots of training that, quite frankly, isn't exactly needed for what they are doing. Personally, I think that IBM would do well to return to valuing employees instead of looking at them as expendable commodities, but either way, they need to get past the legacies of when they had long-term employees all watching a single main frame.

2. As IBM moved to an army of contractors, they killed off the informal (but important!) web of tribal knowledge. You know, a friend of a friend who new the answer to some issue, or knew something about this customer? What has happened is that the transaction costs (as economists call it) have escalated until IBM can scarcely order IBM hardware for its own projects, or have SDM's work together.

M Wagner geek49203_z , Wednesday, April 26, 2017 10:35 AM
geek49203_z Number 2 is a problem everywhere. As long-time employees (mostly baby-boomers) retire, their replacements are usually straight out of college with various non-technical degrees. They come in with little history and few older-employees to which they can turn for "the tricks of the trade".
Shmeg , Wednesday, April 26, 2017 10:41 AM
I came to IBM from their SoftLayer acquisition. Their ability to stomp all over the things SoftLayer was almost doing right were astounding. I stood and listened to Ginni say things like, "We purchased SoftLayer because we need to learn from you," and, "We want you to teach us how to do Cloud the right way, since we spent all these years doing things the wrong way," and, "If you find yourself in a meeting with one of our old teams, you guys are gonna be the ones in charge. You are the ones who know how this is supposed to work - our culture has failed at it." Promises which were nothing more than hollow words.
cavman , Wednesday, April 26, 2017 3:58 PM
In the 1970's 80's and 90's I was working in tech support for a company called ROLM. We were doing communications , voice and data and did many systems for Fortune 500 companies along with 911 systems and the secure system at the White House. My job was to fly all over North America to solve problems with customers and integration of our equipment into their business model. I also did BETA trials and documented systems so others would understand what it took to make it run fine under all conditions.

In 84 IBM bought a percentage of the company and the next year they bought out the company. When someone said to me "IBM just bought you out , you must thing you died and went to heaven." My response was "Think of them as being like the Federal Government but making a profit". They were so heavily structured and hide bound that it was a constant battle working with them. Their response to any comments was "We are IBM"

I was working on an equipment project in Colorado Springs and IBM took control. I was immediately advised that I could only talk to the people in my assigned group and if I had a question outside of my group I had to put it in writing and give it to my manager and if he thought it was relevant it would be forwarded up the ladder of management until it reached a level of a manager that had control of both groups and at that time if he thought it was relevant it would be sent to that group who would send the answer back up the ladder.

I'm a Vietnam Veteran and I used my military training to get things done just like I did out in the field. I went looking for the person I could get an answer from.

At first others were nervous about doing that but within a month I had connections all over the facility and started introducing people at the cafeteria. Things moved quickly as people started working together as a unit. I finished my part of the work which was figuring all the spares technicians would need plus the costs for packaging and service contract estimates. I submitted it to all the people that needed it. I was then hauled into a meeting room by the IBM management and advised that I was a disruptive influence and would be removed. Just then the final contracts that vendors had to sign showed up and it used all my info. The IBM people were livid that they were not involved.

By the way a couple months later the IBM THINK magazine came out with a new story about a radical concept they had tried. A cover would not fit on a component and under the old system both the component and the cover would be thrown out and they would start from scratch doing it over. They decided to have the two groups sit together and figure out why it would not fit and correct it on the spot.

Another great example of IBM people is we had a sales contract to install a multi node voice mail system at WANG computers but we lost it because the IBM people insisted on bundling in AS0400 systems into the sale to WANG computer. Instead we lost a multi million dollar contract.

Eventually Siemens bought 50% of the company and eventually full control. Now all we heard was "That is how we do it in Germany" Our response was "How did that WW II thing work out".

Stockholder , Wednesday, April 26, 2017 7:20 PM
The author may have more loyalty to Microsoft than he confides, is the first thing noticeable about this article. The second thing is that in terms of getting rid of those aged IBM workers, I think he may have completely missed the mark, in fairness, that may be the product of his IBM experience, The sheer hubris of tech-talking from the middle of the story and missing the global misstep that is today's IBM is noticeable. As a stockholder, the first question is, "Where is the investigation to the breach of fiduciary duty by a board that owes its loyalty to stockholders who are scratching their heads at the 'positive' spin the likes of Ginni Rometty is putting on 20 quarters of dead losses?" Got that, 20 quarters of losses.

Next, it's a little worrisome that the author, now over the whole IBM thing is recommending firing "older people," you know, the ones who helped the company retain its performance in years' past. The smartest article I've read about IBM worried about its cheap style of "acquiring" non-best-of-breed companies and firing oodles of its qualified R&D guys. THAT author was right.

IBM's been run into the ground by Ginni, I'll use her first name, since apparently my money is now used to prop up this sham of a leader, who from her uncomfortable public announcement with Tim Cook of Apple, which HAS gone up, by the way, has embraced every political trend, not cause but trend from hiring more women to marginalizing all those old-time white males...You know the ones who produced for the company based on merit, sweat, expertise, all those non-feeling based skills that ultimately are what a shareholder is interested in and replaced them with young, and apparently "social" experts who are pasting some phony "modernity" on a company that under Ginni's leadership has become more of a pet cause than a company.

Finally, regarding ageism and the author's advocacy for the same, IBM's been there, done that as they lost an age discrimination lawsuit decades ago. IBM gave up on doing what it had the ability to do as an enormous business and instead under Rometty's leadership has tried to compete with the scrappy startups where any halfwit knows IBM cannot compete.

The company has rendered itself ridiculous under Rometty, a board that collects paychecks and breaches any notion of fiduciary duty to shareholders, an attempt at partnering with a "mod" company like Apple that simply bolstered Apple and left IBM languishing and a rejection of what has a track record of working, excellence, rewarding effort of employees and the steady plod of performance. Dump the board and dump Rometty.

jperlow Stockholder , Wednesday, April 26, 2017 8:36 PM
Stockholder Your comments regarding any inclination towards age discrimination are duly noted, so I added a qualifier in the piece.
Gravyboat McGee , Wednesday, April 26, 2017 9:00 PM
Four years in GTS ... joined via being outsourced to IBM by my previous employer. Left GTS after 4 years.

The IBM way of life was throughout the Oughts and the Teens an utter and complete failure from the perspective of getting work done right and using people to their appropriate and full potential. I went from a multi-disciplinary team of engineers working across technologies to support corporate needs in the IT environment to being siloed into a single-function organization.

My first year of on-boarding with IBM was spent deconstructing application integration and cross-organizational structures of support and interwork that I had spent 6 years building and maintaining. Handing off different chunks of work (again, before the outsourcing, an Enterprise solution supported by one multi-disciplinary team) to different IBM GTS work silos that had no physical spacial relationship and no interworking history or habits. What we're talking about here is the notion of "left hand not knowing what the right hand is doing" ...

THAT was the IBM way of doing things, and nothing I've read about them over the past decade or so tells me it has changed.

As a GTS employee, professional technical training was deemed unnecessary, hence I had no access to any unless I paid for it myself and used my personal time ... the only training available was cheesy presentations or other web based garbage from the intranet, or casual / OJT style meetings with other staff who were NOT professional or expert trainers.

As a GTS employee, I had NO access to the expert and professional tools that IBM fricking made and sold to the same damn customers I was supposed to be supporting. Did we have expert and professional workflow / document management / ITIL aligned incident and problem management tools? NO, we had fricking Lotus Notes and email. Instead of upgrading to the newest and best software solutions for data center / IT management & support, we degraded everything down the simplest and least complex single function tools that no "best practices" organization on Earth would ever consider using.

And the people management paradigm ... employees ranked annually not against a static or shared goal or metric, but in relation to each other, and there was ALWAYS a "top 10 percent" and a "bottom ten percent" required by upper management ... a system that was sociopathic in it's nature because it encourages employees to NOT work together ... by screwing over one's coworkers, perhaps by not giving necessary information, timely support, assistance as needed or requested, one could potentially hurt their performance and make oneself look relatively better. That's a self-defeating system and it was encouraged by the way IBM ran things.

The "not invented here" ideology was embedded deeply in the souls of all senior IBMers I ever met or worked with ... if you come on board with any outside knowledge or experience, you must not dare to say "this way works better" because you'd be shut down before you could blink. The phrase "best practices" to them means "the way we've always done it".

IBM gave up on innovation long ago. Since the 90's the vast majority of their software has been bought, not built. Buy a small company, strip out the innovation, slap an IBM label on it, sell it as the next coming of Jesus even though they refuse to expend any R&D to push the product to the next level ... damn near everything IBM sold was gentrified, never cutting edge.

And don't get me started on sales practices ... tell the customer how product XYZ is a guaranteed moonshot, they'll be living on lunar real estate in no time at all, and after all the contracts are signed hand the customer a box of nuts & bolts and a letter telling them where they can look up instructions on how to build their own moon rocket. Or for XX dollars more a year, hire a Professional Services IBMer to build it for them.

I have no sympathy for IBM. They need a clean sweep throughout upper management, especially any of the old True Blue hard-core IBMers.

billa201 , Thursday, April 27, 2017 11:24 AM
You obviously have been gone from IBM as they do not treat their employees well anymore and get rid of good talent not keep it a sad state.
ClearCreek , Tuesday, May 9, 2017 7:04 PM
We tried our best to be SMB partners with IBM & Arrow in the early 2000s ... but could never get any traction. I personally needed a mentor, but never found one. I still have/wear some of their swag, and I write this right now on a re-purposed IBM 1U server that is 10 years old, but ... I can't see any way our small company can make $ with them.

Watson is impressive, but you can't build a company on just Watson. This author has some great ideas, yet the phrase that keeps coming to me is internal politics. That corrosive reality has & will kill companies, and it will kill IBM unless it is dealt with.

Turn-arounds are possible (look at MS), but they are hard and dangerous. Hope IBM can figure it out...

[Nov 02, 2018] The D in Systemd stands for 'Dammmmit!' A nasty DHCPv6 packet can pwn a vulnerable Linux box by Shaun Nichols

Notable quotes:
"... Hole opens up remote-code execution to miscreants – or a crash, if you're lucky ..."
"... You can use NAT with IPv6. ..."
Oct 26, 2018 | theregister.co.uk

Hole opens up remote-code execution to miscreants – or a crash, if you're lucky A security bug in Systemd can be exploited over the network to, at best, potentially crash a vulnerable Linux machine, or, at worst, execute malicious code on the box.

The flaw therefore puts Systemd-powered Linux computers – specifically those using systemd-networkd – at risk of remote hijacking: maliciously crafted DHCPv6 packets can try to exploit the programming cockup and arbitrarily change parts of memory in vulnerable systems, leading to potential code execution. This code could install malware, spyware, and other nasties, if successful.

The vulnerability – which was made public this week – sits within the written-from-scratch DHCPv6 client of the open-source Systemd management suite, which is built into various flavors of Linux.

This client is activated automatically if IPv6 support is enabled, and relevant packets arrive for processing. Thus, a rogue DHCPv6 server on a network, or in an ISP, could emit specially crafted router advertisement messages that wake up these clients, exploit the bug, and possibly hijack or crash vulnerable Systemd-powered Linux machines.

Here's the Red Hat Linux summary :

systemd-networkd is vulnerable to an out-of-bounds heap write in the DHCPv6 client when handling options sent by network adjacent DHCP servers. A attacker could exploit this via malicious DHCP server to corrupt heap memory on client machines, resulting in a denial of service or potential code execution.

Felix Wilhelm, of the Google Security team, was credited with discovering the flaw, designated CVE-2018-15688 . Wilhelm found that a specially crafted DHCPv6 network packet could trigger "a very powerful and largely controlled out-of-bounds heap write," which could be used by a remote hacker to inject and execute code.

"The overflow can be triggered relatively easy by advertising a DHCPv6 server with a server-id >= 493 characters long," Wilhelm noted.

In addition to Ubuntu and Red Hat Enterprise Linux, Systemd has been adopted as a service manager for Debian, Fedora, CoreOS, Mint, and SUSE Linux Enterprise Server. We're told RHEL 7, at least, does not use the vulnerable component by default.

Systemd creator Lennart Poettering has already published a security fix for the vulnerable component – this should be weaving its way into distros as we type.

If you run a Systemd-based Linux system, and rely on systemd-networkd, update your operating system as soon as you can to pick up the fix when available and as necessary.

The bug will come as another argument against Systemd as the Linux management tool continues to fight for the hearts and minds of admins and developers alike. Though a number of major admins have in recent years adopted and championed it as the replacement for the old Init era, others within the Linux world seem to still be less than impressed with Systemd and Poettering's occasionally controversial management of the tool. ® Page:

2 3 Next →

Oh Homer , 6 days

Meh

As anyone who bothers to read my comments (BTW "hi" to both of you) already knows, I despise systemd with a passion, but this one is more an IPv6 problem in general.

Yes this is an actual bug in networkd, but IPv6 seems to be far more bug prone than v4, and problems are rife in all implementations. Whether that's because the spec itself is flawed, or because nobody understands v6 well enough to implement it correctly, or possibly because there's just zero interest in making any real effort, I don't know, but it's a fact nonetheless, and my primary reason for disabling it wherever I find it. Which of course contributes to the "zero interest" problem that perpetuates v6's bug prone condition, ad nauseam.

IPv6 is just one of those tech pariahs that everyone loves to hate, much like systemd, albeit fully deserved IMO.

Oh yeah, and here's the obligatory "systemd sucks". Personally I always assumed the "d" stood for "destroyer". I believe the "IP" in "IPv6" stands for "Idiot Protocol".

Anonymous Coward , 6 days
Re: Meh

"nonetheless, and my primary reason for disabling it wherever I find it. "

The very first guide I read to hardening a system recommended disabling services you didn't need and emphasized IPV6 for the reasons you just stated.

Wasn't there a bux in Xorg reported recently as well?

https://www.theregister.co.uk/2018/10/25/x_org_server_vulnerability/

"FreeDesktop.org Might Formally Join Forces With The X.Org Foundation"

https://www.phoronix.com/scan.php?page=news_item&px=FreeDesktop-org-Xorg-Forces

Also, does this mean that Facebook was vulnerable to attack, again?

"Simply put, you could say Facebook loves systemd."

https://www.phoronix.com/scan.php?page=news_item&px=Facebook-systemd-2018

Jay Lenovo , 6 days
Re: Meh

IPv6 and SystemD: Forced industry standard diseases that requires most of us to bite our lips and bear it.

Fortunately, IPv6 by lack of adopted use, limits the scope of this bug.

vtcodger , 6 days
Re: Meh
Fortunately, IPv6 by lack of adopted use, limits the scope of this bug.

Yeah, fortunately IPv6 is only used by a few fringe organizations like Google and Microsoft.

Seriously, I personally want nothing to do with either systemd or IPv6. Both seem to me to fall into the bin labeled "If it ain't broke, let's break it" But still it's troubling that things that some folks regard as major system components continue to ship with significant security flaws. How can one trust anything connected to the Internet that is more sophisticated and complex than a TV streaming box?

DougS , 6 days
Re: Meh

Was going to say the same thing, and I disable IPv6 for the exact same reason. IPv6 code isn't as well tested, as well audited, or as well targeted looking for exploits as IPv4. Stuff like this only proves that it was smart to wait, and I should wait some more.

Nate Amsden , 6 days
Re: Meh

Count me in the camp of who hates systemd(hates it being "forced" on just about every distro, otherwise wouldn't care about it - and yes I am moving my personal servers to Devuan, thought I could go Debian 7->Devuan but turns out that may not work, so I upgraded to Debian 8 a few weeks ago, and will go to Devuan from there in a few weeks, upgraded one Debian 8 to Devuan already 3 more to go -- Debian user since 1998), when reading this article it reminded me of

https://www.theregister.co.uk/2017/06/29/systemd_pwned_by_dns_query/

bombastic bob , 6 days
The gift that keeps on giving (systemd) !!!

This makes me glad I'm using FreeBSD. The Xorg version in FreeBSD's ports is currently *slightly* older than the Xorg version that had that vulnerability in it. AND, FreeBSD will *NEVER* have systemd in it!

(and, for Linux, when I need it, I've been using Devuan)

That being said, the whole idea of "let's do a re-write and do a 'systemd' instead of 'system V init' because WE CAN and it's OUR TURN NOW, 'modern' 'change for the sake of change' etc." kinda reminds me of recent "update" problems with Win-10-nic...

Oh, and an obligatory Schadenfreude laugh: HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA!!!!!!!!!!!!!!!!!!!

Long John Brass , 6 days
Re: The gift that keeps on giving (systemd) !!!

Finally got all my machines cut over from Debian to Devuan.

Might spin a FreeBSD system up in a VM and have a play.

I suspect that the infestation of stupid into the Linux space won't stop with or be limited to SystemD. I will wait and watch to see what damage the re-education gulag has done to Sweary McSwearFace (Mr Torvalds)

Dan 55 , 6 days
Re: Meh

I despise systemd with a passion, but this one is more an IPv6 problem in general.

Not really, systemd has its tentacles everywhere and runs as root. Exploits which affect systemd therefore give you the keys to the kingdom.

Orv , 3 days
Re: Meh
Not really, systemd has its tentacles everywhere and runs as root.

Yes, but not really the problem in this case. Any DHCP client is going to have to run at least part of the time as root. There's not enough nuance in the Linux privilege model to allow it to manipulate network interfaces, otherwise.

4 1
Long John Brass , 3 days
Re: Meh
Yes, but not really the problem in this case. Any DHCP client is going to have to run at least part of the time as root. There's not enough nuance in the Linux privilege model to allow it to manipulate network interfaces, otherwise.

Sorry but utter bullshit. You can if you are so inclined you can use the Linux Capabilities framework for this kind of thing. See https://wiki.archlinux.org/index.php/capabilities

3 0
JohnFen , 6 days
Yay for me

"If you run a Systemd-based Linux system"

I remain very happy that I don't use systemd on any of my machines anymore. :)

"others within the Linux world seem to still be less than impressed with Systemd"

Yep, I'm in that camp. I gave it a good, honest go, but it increased the amount of hassle and pain of system management without providing any noticeable benefit, so I ditched it.

ElReg!comments!Pierre , 2 days
Re: Time to troll

> Just like it's entirely possible to have a Linux system without any GNU in it

Just like it's possible to have a GNU system without Linux on it - ho well as soon as GNU MACH is finally up to the task ;-)

On the systemd angle, I, too, am in the process of switching all my machines from Debian to Devuan but on my personnal(*) network a few systemd-infected machines remain, thanks to a combination of laziness from my part and stubborn "systemd is quite OK" attitude from the raspy foundation. That vuln may be the last straw : one on the aforementionned machines sits on my DMZ, chatting freely with the outside world. Nothing really crucial on it, but i'd hate it if it became a foothold for nasties on my network.

(*) policy at work is RHEL, and that's negociated far above my influence level, but I don't really care as all my important stuff runs on Z/OS anyway ;-) . Ok we have to reboot a few VMs occasionnally when systemd throws a hissy fit -which is surprisingly often for an "enterprise" OS -, but meh.

Destroy All Monsters , 5 days
Re: Not possible

This code is actually pretty bad and should raise all kinds of red flags in a code review.

Anonymous Coward , 5 days
Re: Not possible

ITYM Lennart

Christian Berger , 5 days
Re: Not possible

"This code is actually pretty bad and should raise all kinds of red flags in a code review."

Yeah, but for that you need people who can do code reviews, and also people who can accept criticism. That also means saying "no" to people who are bad at coding, and saying that repeatedly if they don't learn.

SystemD seems to be the area where people gather who want to get code in for their resumes, not for people who actually want to make the world a better place.

26 1
jake , 6 days
There is a reason ...

... that an init, traditionally, is a small bit of code that does one thing very well. Like most of the rest of the *nix core utilities. All an init should do is start PID1, set run level, spawn a tty (or several), handle a graceful shutdown, and log all the above in plaintext to make troubleshooting as simplistic as possible. Anything else is a vanity project that is best placed elsewhere, in it's own stand-alone code base.

Inventing a clusterfuck init variation that's so big and bulky that it needs to be called a "suite" is just asking for trouble.

IMO, systemd is a cancer that is growing out of control, and needs to be cut out of Linux before it infects enough of the system to kill it permanently.

AdamWill , 6 days
Re: There is a reason ...

That's why systemd-networkd is a separate, optional component, and not actually part of the init daemon at all. Most systemd distros do not use it by default and thus are not vulnerable to this unless the user actively disables the default network manager and chooses to use networkd instead.

Anonymous Coward , 4 days
Re: There is a reason ...

"Just go install a default Fedora or Ubuntu system and check for yourself: you'll have systemd, but you *won't* have systemd-networkd running."

Funny that I installed ubuntu 18.04 a few weeks ago and the fucking thing installed itself then! ( and was a fucking pain to remove).

LP is a fucking arsehole.

Orv , 3 days
Re: There is a reason ...
Pardon my ignorance (I don't use a distro with systemd) why bother with networkd in the first place if you don't have to use it.

Mostly because the old-style init system doesn't cope all that well with systems that move from network to network. It works for systems with a static IP, or that do a DHCP request at boot, but it falls down on anything more dynamic.

In order to avoid restarting the whole network system every time they switch WiFi access points, people have kludged on solutions like NetworkManager. But it's hard to argue it's more stable or secure than networkd. And this is always going to be a point of vulnerability because anything that manipulates network interfaces will have to be running as root.

These days networking is essential to the basic functionality of most computers; I think there's a good argument that it doesn't make much sense to treat it as a second-class citizen.

AdamWill , 2 days
Re: There is a reason ...

"Funny that I installed ubuntu 18.04 a few weeks ago and the fucking thing installed itself then! ( and was a fucking pain to remove)."

So I looked into it a bit more, and from a few references at least, it seems like Ubuntu has a sort of network configuration abstraction thingy that can use both NM and systemd-networkd as backends; on Ubuntu desktop flavors NM is usually the default, but apparently for recent Ubuntu Server, networkd might indeed be the default. I didn't notice that as, whenever I want to check what's going on in Ubuntu land, I tend to install the default desktop spin...

"LP is a fucking arsehole."

systemd's a lot bigger than Lennart, you know. If my grep fu is correct, out of 1543 commits to networkd, only 298 are from Lennart...

1 0
alain williams , 6 days
Old is good

in many respects when it comes to software because, over time, the bugs will have been found and squashed. Systemd brings in a lot of new code which will, naturally, have lots of bugs that will take time to find & remove. This is why we get problems like this DHCP one.

Much as I like the venerable init: it did need replacing. Systemd is one way to go, more flexible, etc, etc. Something event driven is a good approach.

One of the main problems with systemd is that it has become too big, slurped up lots of functionality which has removed choice, increased fragility. They should have concentrated on adding ways of talking to existing daemons, eg dhcpd, through an API/something. This would have reused old code (good) and allowed other implementations to use the API - this letting people choose what they wanted to run.

But no: Poettering seems to want to build a Cathedral rather than a Bazzar.

He appears to want to make it his way or no way. This is bad, one reason that *nix is good is because different solutions to a problem have been able to be chosen, one removed and another slotted in. This encourages competition and the 'best of breed' comes out on top. Poettering is endangering that process.

Also: he refusal to accept patches to let it work on non-Linux Unix is just plain nasty.

oiseau , 4 days
Re: Old is good

Hello:

One of the main problems with systemd is that it has become too big, slurped up lots of functionality which has removed choice, increased fragility.

IMO, there is a striking paralell between systemd and the registry in Windows OSs.

After many years of dealing with the registry (W98 to XPSP3) I ended up seeing the registry as a sort of developer sanctioned virus running inside the OS, constantly changing and going deeper and deeper into the OS with every iteration and as a result, progressively putting an end to the possibility of knowing/controlling what was going on inside your box/the OS.

Years later, when I learned about the existence of systemd (I was already running Ubuntu) and read up on what it did and how it did it, it dawned on me that systemd was nothing more than a registry class virus and it was infecting Linux_land at the behest of the developers involved.

So I moved from Ubuntu to PCLinuxOS and then on to Devuan.

Call me paranoid but I am convinced that there are people both inside and outside IT that actually want this and are quite willing to pay shitloads of money for it to happen.

I don't see this MS cozying up to Linux in various ways lately as a coincidence: these things do not happen just because or on a senior manager's whim.

What I do see (YMMV) is systemd being a sort of convergence of Linux with Windows, which will not be good for Linux and may well be its undoing.

Cheers,

O.

Rich 2 , 4 days
Re: Old is good

"Also: he refusal to accept patches to let it work on non-Linux Unix is just plain nasty"

Thank goodness this crap is unlikely to escape from Linux!

By the way, for a systemd-free Linux, try void - it's rather good.

Michael Wojcik , 3 days
Re: Old is good

Much as I like the venerable init: it did need replacing.

For some use cases, perhaps. Not for any of mine. SysV init, or even BSD init, does everything I need a Linux or UNIX init system to do. And I don't need any of the other crap that's been built into or hung off systemd, either.

Orv , 3 days
Re: Old is good

BSD init and SysV init work pretty darn well for their original purpose -- servers with static IP addresses that are rebooted no more than once in a fortnight. Anything more dynamic starts to give it trouble.

Chairman of the Bored , 6 days
Too bad Linus swore off swearing

Situations like this go beyond a little "golly gee, I screwed up some C"...

jake , 6 days
Re: Too bad Linus swore off swearing

Linus doesn't care. systemd has nothing to do with the kernel ... other than the fact that the lead devs for systemd have been banned from working on the kernel because they don't play nice with others.

JLV , 6 days
how did it get to this?

I've been using runit, because I am too lazy and clueless to write init scripts reliably. It's very lightweight, runs on a bunch of systems and really does one thing - keep daemons up.

I am not saying it's the best - but it looks like it has a very small codebase, it doesn't do much and generally has not bugged me after I configured each service correctly. I believe other systems also exist to avoid using init scripts directly. Not Monit, as it relies on you configuring the daemon start/stop commands elsewhere.

On the other hand, systemd is a massive sprawl, does a lot of things - some of them useful, like dependencies and generally has needed more looking after. Twice I've had errors on a Django server that, after a lot of looking around ended up because something had changed in the, Chef-related, code that's exposed to systemd and esoteric (not emitted by systemd) errors resulted when systemd could not make sense of the incorrect configuration.

I don't hate it - init scripts look a bit antiquated to me and they seem unforgiving to beginners - but I don't much like it. What I certainly do hate is how, in an OS that is supposed to be all about choice, sometime excessively so as in the window manager menagerie, we somehow ended up with one mandatory daemon scheduler on almost all distributions. Via, of all types of dependencies, the GUI layer. For a window manager that you may not even have installed.

Talk about the antithesis of the Unix philosophy of do one thing, do it well.

Oh, then there are also the security bugs and the project owner is an arrogant twat. That too.

Doctor Syntax , 6 days
Re: how did it get to this?

"init scripts look a bit antiquated to me and they seem unforgiving to beginners"

Init scripts are shell scripts. Shell scripts are as old as Unix. If you think that makes them antiquated then maybe Unix-like systems are not for you. In practice any sub-system generally gets its own scripts installed with the rest of the S/W so if being unforgiving puts beginners off tinkering with them so much the better. If an experienced Unix user really needs to modify one of the system-provided scripts their existing shell knowledge will let them do exactly what's needed. In the extreme, if you need to develop a new init script then you can do so in the same way as you'd develop any other script - edit and test from the command line.

33 4
onefang , 6 days
Re: how did it get to this?

"Init scripts are shell scripts."

While generally true, some sysv init style inits can handle init "scripts" written in any language.

sed gawk , 6 days
Re: how did it get to this?

I personally like openrc as an init system, but systemd is a symptom of the tooling problem.

It's for me a retrograde step but again, it's linux, one can, as you and I do, just remove systemd.

There are a lot of people in the industry now who don't seem able to cope with shell scripts nor are minded to research the arguments for or against shell as part of a unix style of system design.

In conclusion, we are outnumbered, but it will eventually collapse under its own weight and a worthy successor shall rise, perhaps called SystemV, might have to shorten that name a bit.

AdamWill , 6 days
Just about nothing actually uses networkd

"In addition to Ubuntu and Red Hat Enterprise Linux, Systemd has been adopted as a service manager for Debian, Fedora, CoreOS, Mint, and SUSE Linux Enterprise Server. We're told RHEL 7, at least, does not use the vulnerable component by default."

I can tell you for sure that no version of Fedora does, either, and I'm fairly sure that neither does Debian, SLES or Mint. I don't know anything much about CoreOS, but https://coreos.com/os/docs/latest/network-config-with-networkd.html suggests it actually *might* use systemd-networkd.

systemd-networkd is not part of the core systemd init daemon. It's an optional component, and most distros use some other network manager (like NetworkManager or wicd) by default.

Christian Berger , 5 days
The important word here is "still"

I mean commercial distributions seem to be particularly interested in trying out new things that can increase their number of support calls. It's probably just that networkd is either to new and therefore not yet in the release, or still works so badly even the most rudimentary tests fail.

There is no reason to use that NTP daemon of systemd, yet more and more distros ship with it enabled, instead of some sane NTP-server.

NLCSGRV , 6 days
The Curse of Poettering strikes again.
_LC_ , 6 days
Now hang on, please!

Ser iss no neet to worry, systemd will becum stable soon after PulseAudio does.

Ken Hagan , 6 days
Re: Now hang on, please!

I won't hold my breath, then. I have a laptop at the moment that refuses to boot because (as I've discovered from looking at the journal offline) pulseaudio is in an infinite loop waiting for the successful detection of some hardware that, presumably, I don't have.

I imagine I can fix it by hacking the file-system (offline) so that fuckingpulse is no longer part of the boot configuration, but I shouldn't have to. A decent init system would be able to kick of everything else in parallel and if one particular service doesn't come up properly then it just logs the error. I *thought* that was one of the claimed advantages of systemd, but apparently that's just a load of horseshit.

26 0
Obesrver1 , 5 days
Reason for disabling IVP6

That it punches thru NAT routers enabling all your little goodies behind them as directly accessible.

MS even supplies tunneling (Ivp4 to Ivp6) so if using Linux in a VM on a MS system you may still have it anyway.

NAT was always recommended to be used in hardening your system, I prefer to keep all my idIoT devices behind one.

As they are just Idiot devices.

In future I will need a NAT that acts as a DNS and offers some sort of solution to keeping Ivp4.

Orv , 3 days
Re: Reason for disabling IVP6

My NAT router statefully firewalls incoming IPv6 by default, which I consider equivalently secure. NAT adds security mostly by accident, because it de-facto adds a firewall that blocks incoming packets. It's not the address translation itself that makes things more secure, it's the inability to route in from the outside.

dajames , 3 days
Re: Reason for disabling IVP6

You can use NAT with IPv6.

You can, but why would you want to.

NAT is schtick for connecting a whole LAN to a WAN using a single IPv4 address (useful with IPv4 because most ISPs don't give you a /24 when you sign up). If you have a native IPv6 address you'll have something like 2^64 addresses, so machines on your LAN can have an actual WAN-visible address of their own without needing a trick like NAT.

Using NAT with IPv6 is just missing the point.

JohnFen , 3 days
Re: Reason for disabling IVP6

"so machines on your LAN can have an actual WAN-visible address of their own without needing a trick like NAT."

Avoiding that configuration is exactly the use case for using NAT with IPv6. As others have pointed out, you can accomplish the same thing with IPv6 router configuration, but NAT is easier in terms of configuration and maintenance. Given that, and assuming that you don't want to be able to have arbitrary machines open ports that are visible to the internet, then why not use NAT?

Also, if your goal is to make people more likely to move to IPv6, pointing out IPv4 methods that will work with IPv6 (even if you don't consider them optimal) seems like a really, really good idea. It eases the transition.

Destroy All Monsters , 5 days
Please El Reg these stories make ma rage at breakfast, what's this?

The bug will come as another argument against Systemd as the Linux management tool continues to fight for the hearts and minds of admins and developers alike.

Less against systemd (which should get attacked on the design & implementation level) or against IPv6 than against the use of buffer-overflowable languages in 2018 in code that processes input from the Internet (it's not the middle ages anymore) or at least very hard linting of the same.

But in the end, what did it was a violation of the Don't Repeat Yourself principle and lack of sufficently high-level datastructures. Pointer into buffer, and the remaining buffer length are two discrete variables that need to be updated simultaneously to keep the invariant and this happens in several places. This is just a catastrophe waiting to happen. You forget to update it once, you are out! Use structs and functions updating the structs correctly.

And use assertions in the code , this stuff all seems disturbingly assertion-free.

Excellent explanation by Felix Wilhelm:

https://bugs.launchpad.net/ubuntu/+source/systemd/+bug/1795921

The function receives a pointer to the option buffer buf, it's remaining size buflen and the IA to be added to the buffer. While the check at (A) tries to ensure that the buffer has enough space left to store the IA option, it does not take the additional 4 bytes from the DHCP6Option header into account (B). Due to this the memcpy at (C) can go out-of-bound and *buflen can underflow [i.e. you suddenly have a gazillion byte buffer, Ed.] in (D) giving an attacker a very powerful and largely controlled OOB heap write starting at (E).

TheSkunkyMonk , 5 days
Init is 1026 lines of code in one file and it works great.
Anonymous Coward , 5 days
"...and Poettering's occasionally controversial management of the tool."

Shouldn't that be "...Potterings controversial management as a tool."?

clocKwize , 4 days
Re: Contractor rights

why don't we stop writing code in languages that make it easy to screw up so easily like this?

There are plenty about nowadays, I'd rather my DHCP client be a little bit slower at processing packets if I had more confidence it would not process then incorrectly and execute code hidden in said packets...

Anonymous Coward , 4 days
Switch, as easy as that

The circus that is called "Linux" have forced me to Devuan and the likes however the circus is getting worse and worse by the day, thus I have switched to the BSD world, I will learn that rather than sit back and watch this unfold As many of us have been saying, the sudden switch to SystemD was rather quick, perhaps you guys need to go investigate why it really happened, don't assume you know, go dig and you will find the answers, it's rather scary, thus I bid the Linux world a farewell after 10 years of support, I will watch the grass dry out from the other side of the fence, It was destined to fail by means of infiltration and screw it up motive(s) on those we do not mention here.

oiseau , 3 days
Re: Switch, as easy as that

Hello:

As many of us have been saying, the sudden switch to SystemD was rather quick, perhaps you guys need to go investigate why it really happened, don't assume you know, go dig and you will find the answers, it's rather scary ...

Indeed, it was rather quick and is very scary.

But there's really no need to dig much, just reason it out.

It's like a follow the money situation of sorts.

I'll try to sum it up in three short questions:

Q1: Hasn't the Linux philosophy (programs that do one thing and do it well) been a success?

A1: Indeed, in spite of the many init systems out there, it has been a success in stability and OS management. And it can easily be tested and debugged, which is an essential requirement.

Q2: So what would Linux need to have the practical equivalent of the registry in Windows for?

A2: So that whatever the registry does in/to Windows can also be done in/to Linux.

Q3: I see. And just who would want that to happen? Makes no sense, it is a huge step backwards.

A3: ....

Cheers,

O.

Dave Bell , 4 days
Reporting weakness

OK, so I was able to check through the link you provided, which says "up to and including 239", but I had just installed a systemd update and when you said there was already a fix written, working it's way through the distro update systems, all I had to do was check my log.

Linux Mint makes it easy.

But why didn't you say something such as "reported to affect systemd versions up to and including 239" and then give the link to the CVE? That failure looks like rather careless journalism.

W.O.Frobozz , 3 days
Hmm.

/sbin/init never had these problems. But then again /sbin/init didn't pretend to be the entire operating system.

[Nov 01, 2018] IBM was doing their best to demoralize their staff (and contractors) and annoy their customers as much as possible!

Notable quotes:
"... I worked as a contractor for IBM's IGS division in the late '90s and early 2000s at their third biggest customer, and even then, IBM was doing their best to demoralize their staff (and contractors) and annoy their customers as much as possible! ..."
"... IBM charged themselves 3x the actual price to customers for their ThinkPads at the time! This meant that I never had a laptop or desktop PC from IBM in the 8 years I worked there. If it wasn't for the project work I did I would not have had a PC to work on! ..."
"... What was strange is that every single time I got a pay cut, IBM would then announce that they had bought a new company! I would have quit long before I did, but I was tied to them while waiting for my Green Card to be approved. I know that raises are few in the current IBM for normal employees and that IBM always pleads poverty for any employee request. Yet, they somehow manage to pay billions of dollars for a new company. Strange that, isn't it? ..."
"... I moved to the company that had won the contract and regret not having the chance to tell that IBM manager what I thought about him and where he could stick the new laptop. ..."
"... After that experience I decided to never work for them in any capacity ever again. I feel pity for the current Red Hat employees and my only advice to them is to get out while they can. "DON'T FOLLOW THE RED HAT TO HELL" ..."
Nov 01, 2018 | theregister.co.uk

Edwin Tumblebunny Ashes to ashes, dust to dust - Red Hat is dead.

Red Hat will be a distant memory in a few years as it gets absorbed by the abhorrent IBM culture and its bones picked clean by the IBM beancounters. Nothing good ever happens to a company bought by IBM.

I worked as a contractor for IBM's IGS division in the late '90s and early 2000s at their third biggest customer, and even then, IBM was doing their best to demoralize their staff (and contractors) and annoy their customers as much as possible!

Some examples:

The on-site IBM employees (and contractors) had to use Lotus Notes for email. That was probably the worst piece of software I have ever used - I think baboons on drugs could have done a better design job. IBM set up a T1 (1.54 Mbps) link between the customer and the local IBM hub for email, etc. It sounds great until you realize there were over 150 people involved and due to the settings of Notes replication, it could often take over an hour to actually download email to read.

To do my job I needed to install some IBM software. My PC did not have enough disk space for this software as well as the other software I needed. Rather than buy me a bigger hard disk I had to spend 8 hours a week installing and reinstalling software to do my job.

I waited three months for a $50 stick of memory to be approved. When it finally arrived my machine had been changed out (due to a new customer project) and the memory was not compatible! Since I worked on a lot of projects I often had machines supplied by the customer on my desk. So, I would use one of these as my personal PC and would get an upgrade when the next project started!

I was told I could not be supplied with a laptop or desktop from IBM as they were too expensive (my IBM division did not want to spend money on anything). IBM charged themselves 3x the actual price to customers for their ThinkPads at the time! This meant that I never had a laptop or desktop PC from IBM in the 8 years I worked there. If it wasn't for the project work I did I would not have had a PC to work on!

IBM has many strange and weird processes that allow them to circumvent the contract they have with their preferred contractor companies. This meant that for a number of years I ended up getting a pay cut. What was strange is that every single time I got a pay cut, IBM would then announce that they had bought a new company! I would have quit long before I did, but I was tied to them while waiting for my Green Card to be approved. I know that raises are few in the current IBM for normal employees and that IBM always pleads poverty for any employee request. Yet, they somehow manage to pay billions of dollars for a new company. Strange that, isn't it?

Eventually I was approved to get a laptop and excitedly watched it move slowly through the delivery system. I got confused when it was reported as delivered to Ohio rather than my work (not in Ohio). After some careful searching I discovered that my manager and his wife both worked for IBM from their home in, yes you can guess, Ohio. It looked like he had redirected my new laptop for his own use and most likely was going to send me his old one and claim it was a new one. I never got the chance to confront him about it, though, as IBM lost the contract with the customer that month and before the laptop should have arrived IBM was out! I moved to the company that had won the contract and regret not having the chance to tell that IBM manager what I thought about him and where he could stick the new laptop.

After that experience I decided to never work for them in any capacity ever again. I feel pity for the current Red Hat employees and my only advice to them is to get out while they can. "DON'T FOLLOW THE RED HAT TO HELL"

Certain Hollywood stars seem to be psychic types : https://twitter.com/JimCarrey/status/1057328878769721344

rmstock , 2 days

Re: "DON'T FOLLOW THE RED HAT TO HELL"

I sense that a global effort is ongoing to shutdown open source software by brute force. First, the enforcement of the EU General Data Protection Regulation (GDPR) by ICANN.org to enable untraceable takeovers of domains. Microsoft buying github. Linus Torvalds forced out of his own Linux kernel project because of the Code of Conduct and now IBM buying RedHat. I wrote the following at https://lulz.com/linux-devs-threaten-killswitch-coc-controversy-1252/ "Torvalds should lawyer up. The problems are the large IT Tech firms who platinum donated all over the place in Open Source land. When IBM donated with 1 billion USD to Linux in 2000 https://itsfoss.com/ibm-invest-1-billion-linux/ a friend who vehemently was against the GPL and what Torvalds was doing, told me that in due time OSS would simply just go away.

These Community Organizers, not Coders per se, are on a mission to overtake and control the Linux Foundation, and if they can't, will search and destroy all of it, even if it destroys themselves. Coraline is merely a expendable pion here. Torvalds is now facing unjust confrontations and charges resembling the nomination of Judge Brett Kavanaugh. Looking at the CoC document it even might have been written by a Google executive, who themselves currently are facing serious charges and lawsuits from their own Code of Conduct. See theintercept.com, their leaked video the day after the election of 2016. They will do anything to pursue this. However to pursue a personal bias or agenda furnishing enactments or acts such as to, omit contradicting facts (code), commit perjury, attend riots and harassments, cleanse Internet archives and search engines of exculpatory evidence and ultimately hire hit-men to exterminate witnesses of truth (developers), in an attempt to elevate bias as fabricated fact (code) are crimes and should be prosecuted accordingly."

[Nov 01, 2018] Will Red Hat Survive IBM Ownership

It does not matter if somebody "stresses independence word are cheap. The mere fact that this is not IBM changes relationships. also IBM executives need to show "leadership" and that entails some "general direction" for Red Hat from now on. At least with Microsoft and HP relationship will be much cooler, then before.
Also IBM does not like "charity" projects like CentOS and that will be affected too, no matter what executives tell you right now. Paradoxically this greatly strengthen the position of Oracle Linux.
The status of IBM software in corporate world 9outside finance companies) is low and their games with licenses (licensing products per core, etc) are viewed by most of their customers as despicable. This was one of the reasons IBM lost it share in enterprise software. For example, greed in selling Tivoli more or less killed the software. All credits to Lou Gerstner who initially defined this culture of relentless outsource and cult of the "bottom line" (which was easy for his because he does not understood technology at all). His successor was even more active in driving company into the ground. R ampant cost-arbitrage driven offshoring has left a legacy of dissatisfied customers. Most projects are over priced. and most of those which were priced more or less on industry level had bad quality results and costs overruns.
IBM cut severance pay to 1 month, is firing people left and right and is insensitive to the fired employees and the result is enormous negativity for them. Good people are scared to work for them and people are asking tough questions.
It's strategy since Gerstner. Palmisano (this guys with history diploma witched into Cybersecurity after retirement in 2012 and led Obama cybersecurity commission) & Ginni Rometty was completely neoliberal mantra "share holder value", grow earnings per share at all costs. They all manage IBM for financial appearance rather than the quaility products. There was no focus on breakthrough-innovation, market leadership in mega-trends (like cloud computing) or even giving excellent service to customers.
Ginni Rometty accepted bonuses during times of layoffs and outsourcing.
When company have lost it architectural talent the brand will eventually die. IBM still has very high number of patents every year. It is still a very large company in terms of revenue and number of employees. However, there are strong signs that its position in the technology industry might deteriorate further.
Nov 01, 2018 | www.itprotoday.com

Cormier also stressed Red Hat independence when we asked how the acquisition would affect ongoing partnerships in place with Amazon Web Services, Microsoft Azure, and other public clouds.

"One of the things you keep seeing in this is that we're going to run Red Hat as a separate entity within IBM," he said. "One of the reasons is business. We need to, and will, remain Switzerland in terms of how we interact with our partners. We're going to continue to prioritize what we do for our partners within our products on a business case perspective, including IBM as a partner. We're not going to do unnatural things. We're going to do the right thing for the business, and most importantly, the customer, in terms of where we steer our products."

Red Hat promises that independence will extend to Red Hat's community projects, such as its freely available Fedora Linux distribution which is widely used by developers. When asked what impact the sale would have on Red Hat maintained projects like Fedora and CentoOS, Cormier replied, "None. We just came from an all-hands meeting from the company around the world for Red Hat, and we got asked this question and my answer was that the day after we close, I don't intend to do anything different or in any other way than we do our every day today. Arvind, Ginnie, Jim, and I have talked about this extensively. For us, it's business as usual. Whatever we were going to do for our road maps as a stand alone will continue. We have to do what's right for the community, upstream, our associates, and our business."

This all sounds good, but as they say, talk is cheap. Six months from now we'll have a better idea of how well IBM can walk the walk and leave Red Hat alone. If it can't and Red Hat doesn't remain clearly distinct from IBM ownership control, then Big Blue will have wasted $33 billion it can't afford to lose and put its future, as well as the future of Red Hat, in jeopardy.

[Oct 30, 2018] Red Hat hired the CentOS developers 4.5-years ago

Oct 30, 2018 | linux.slashdot.org

quantaman ( 517394 ) , Sunday October 28, 2018 @04:22PM ( #57550805 )

Re:Well at least we'll still have Cent ( Score: 4 , Informative)
Fedora is fully owned by Red Hat and CentOS requires the availability of the Red Hat repositories which they aren't obliged to make public to non-customers..

Fedora is fully under Red Hat's control. It's used as a bleeding edge distro for hobbyists and as a testing ground for code before it goes into RHEL. I doubt its going away since it does a great job of establishing mindshare but no business in their right mind is going to run Fedora in production.

But CentOS started as a separate organization with a fairly adversarial relationship to Red Hat since it really is free RHEL which cuts into their actual customer base. They didn't need Red Hat repos back then, just the code which they rebuilt from scratch (which is why they were often a few months behind).

If IBM kills CentOS a new one will pop up in a week, that's the beauty of the GPL.

Luthair ( 847766 ) , Sunday October 28, 2018 @04:22PM ( #57550799 )
Re:Well at least we'll still have Cent ( Score: 3 )

Red Hat hired the CentOS developers 4.5-years ago.

[Oct 30, 2018] We run just about everything on CentOS around here, downstream of RHEL. Should we be worried?

Oct 30, 2018 | arstechnica.com

Muon , Ars Scholae Palatinae 6 hours ago Popular

We run just about everything on CentOS around here, downstream of RHEL. Should we be worried? 649 posts | registered 1/26/2009
brandnewmath , Smack-Fu Master, in training et Subscriptor 6 hours ago Popular
We'll see. Companies in an acquisition always rush to explain how nothing will change to reassure their customers. But we'll see.
Kilroy420 , Ars Tribunus Militum 6 hours ago Popular
Perhaps someone can explain this... Red Hat's revenue and assets barely total about $5B. Even factoring in market share and capitalization, how the hey did IBM come up with $34B cash being a justifiable purchase price??

Honestly, why would Red Hat have said no? 1648 posts | registered 4/3/2012

dorkbert , Ars Tribunus Militum 6 hours ago Popular
My personal observation of IBM over the past 30 years or so is that everything it acquires dies horribly.
barackorama , Smack-Fu Master, in training 6 hours ago
...IBM's own employees see it as a company in free fall. This is not good news.

In other news, property values in Raleigh will rise even more...

Moodyz , Ars Centurion 6 hours ago Popular
Quote:
This is fine

Looking back at what's happened with many of IBM's past acquisitions, I'd say no, not quite fine.
I am not your friend , Wise, Aged Ars Veteran et Subscriptor 6 hours ago Popular
I just can't comprehend that price. Cloud has a rich future, but I didn't even know Red Hat had any presence there, let alone $35 billion worth.
jandrese , Ars Tribunus Angusticlavius et Subscriptor 6 hours ago Popular
50me12 wrote:
Will IBM even know what to do with them?

IBM has been fumbling around for a while. They didn't know how to sell Watson as they sold it like a weird magical drop in service and it failed repeatedly, where really it should be a long term project that you bring customer's along for the ride...

I had a buddy using their cloud service and they went to spin up servers and IBM was all "no man we have to set them up first".... like that's not cloud IBM...

If IBM can't figure out how to sell its own services I'm not sure the powers that be are capable of getting the job done ever. IBM's own leadership seems incompatible with the state of the world.

IBM basically bought a ton of service contracts for companies all over the world. This is exactly what the suits want: reliable cash streams without a lot of that pesky development stuff.

IMHO this is perilous for RHEL. It would be very easy for IBM to fire most of the developers and just latch on to the enterprise services stuff to milk it till its dry.

skizzerz , Wise, Aged Ars Veteran et Subscriptor 6 hours ago
toturi wrote:
I can only see this as a net positive - the ability to scale legacy mainframes onto "Linux" and push for even more security auditing.

I would imagine the RHEL team will get better funding but I would be worried if you're a centos or fedora user.

I'm nearly certain that IBM's management ineptitude will kill off Fedora and CentOS (or at least severely gimp them compared to how they currently are), not realizing how massively important both of these projects are to the core RHEL product. We'll see RHEL itself suffer as a result.

I normally try to understand things with an open mindset, but in this case, IBM has had too long of a history of doing things wrong for me to trust them. I'll be watching this carefully and am already prepping to move off of my own RHEL servers once the support contract expires in a couple years just in case it's needed.

Iphtashu Fitz , Ars Scholae Palatinae 6 hours ago Popular
50me12 wrote:
Will IBM even know what to do with them?

My previous job (6+ years ago now) was at a university that was rather heavily invested in IBM for a high performance research cluster. It was something around 100 or so of their X-series blade servers, all of which were running Red Hat Linux. It wouldn't surprise me if they decided to acquire Red Hat in large part because of all these sorts of IBM systems that run Red Hat on them.

TomXP411 , Ars Tribunus Angusticlavius 6 hours ago Popular
Iphtashu Fitz wrote:
50me12 wrote:
blockquote> Will IBM even know what to do with them?

My previous job (6+ years ago now) was at a university that was rather heavily invested in IBM for a high performance research cluster. It was something around 100 or so of their X-series blade servers, all of which were running Red Hat Linux. It wouldn't surprise me if they decided to acquire Red Hat in large part because of all these sorts of IBM systems that run Red Hat on them.

That was my thought. IBM wants to own an operating system again. With AIX being relegated to obscurity, buying Red Hat is simpler than creating their own Linux fork.

anon_lawyer , Wise, Aged Ars Veteran 6 hours ago Popular
Valuing Red Hat at $34 billion means valuing it at more than 1/4 of IBMs current market cap. From my perspective this tells me IBM is in even worse shape than has been reported.
dmoan , Ars Centurion 6 hours ago
I am not your friend wrote:
I just can't comprehend that price. Cloud has a rich future, but I didn't even know Red Hat had any presence there, let alone $35 billion worth.

Redhat made 258 million in income last year so they paid over 100 times its net income that's crazy valuation here...

[Oct 30, 2018] I have worked at IBM 17 years and have worried about being layed off for about 11 of them. Moral is in the toilet. Bonuses for the rank and file are in the under 1% range while the CEO gets millions

Notable quotes:
"... Adjusting for inflation, I make $6K less than I did my first day. My group is a handful of people as at least 1/2 have quit or retired. To support our customers, we used to have several people, now we have one or two and if someone is sick or on vacation, our support structure is to hope nothing breaks. ..."
Oct 30, 2018 | features.propublica.org

Buzz , Friday, March 23, 2018 12:00 PM

I've worked there 17 years and have worried about being layed off for about 11 of them. Moral is in the toilet. Bonuses for the rank and file are in the under 1% range while the CEO gets millions. Pay raises have been non existent or well under inflation for years.

Adjusting for inflation, I make $6K less than I did my first day. My group is a handful of people as at least 1/2 have quit or retired. To support our customers, we used to have several people, now we have one or two and if someone is sick or on vacation, our support structure is to hope nothing breaks.

We can't keep millennials because of pay, benefits and the expectation of being available 24/7 because we're shorthanded. As the unemployment rate drops, more leave to find a different job, leaving the old people as they are less willing to start over with pay, vacation, moving, selling a house, pulling kids from school, etc.

The younger people are generally less likely to be willing to work as needed on off hours or to pull work from a busier colleague.

I honestly have no idea what the plan is when the people who know what they are doing start to retire, we are way top heavy with 30-40 year guys who are on their way out, very few of the 10-20 year guys due to hiring freezes and we can't keep new people past 2-3 years. It's like our support business model is designed to fail.

[Oct 30, 2018] Will systemd become standard on mainframes as well?

It will be interesting to see what happens in any case.
Oct 30, 2018 | theregister.co.uk

Doctor Syntax , 1 day

So now it becomes Blue Hat. Will systemd become standard on mainframes as well?
DCFusor , 15 hrs
@Doctor

Maybe we get really lucky and they RIF Lennart Poettering or he quits? I hear IBM doesn't tolerate prima donnas and cults of personality quite as much as RH?

Anonymous Coward , 15 hrs
I hear IBM doesn't tolerate prima donnas and cults of personality quite as much as RH?

Quite the contrary. IBM is run and managed by prima donnas and personality cults.

Waseem Alkurdi , 18 hrs
Re: Poettering

OS/2 and Poettering? Best joke I've ever heard!

(It'd be interesting if somebody locked them both up in an office and see what happens!)

Glen Turner 666 , 16 hrs
Re: Patents

IBM already had access to Red Hat's patents, including for patent defence purposes. Look up "open innovation network".

This acquisition is about: (1) IBM needing growth, or at least a plausible scenario for growth. (2) Red Hat wanting an easy expansion of its sales channels, again for growth. (3) Red Hat stockholders being given an offer they can't refuse.

This acquisition is not about: cultural change at IBM. Which is why the acquisition will 'fail'. The bottom line is that engineering matters at the moment (see: Google, Amazon), and IBM sacked their engineering culture across the past two decades. To be successful IBM need to get that culture back, and acquiring Red Hat gives IBM the opportunity to create a product-building, client-service culture within IBM. Except that IBM aren't taking the opportunity, so there's a large risk the reverse will happen -- the acquisition will destroy Red Hat's engineering- and service-oriented culture.

Anonymous Coward , 1 day
The kraken versus the container ship

This could be interesting: will the systemd kraken manage to wrap its tentacles around the big blue container ship and bring it to a halt, or will the container ship turn out to be well armed and fatally harpoon the kraken (causing much rejoicing in the rest of the Linux world)?

Sitaram Chamarty , 1 day
disappointed...

Honestly, this is a time for optimism: if they manage to get rid of Lennart Poettering, everything else will be tolerable!

dbtx , 1 day
*if*

you can change the past so that a "proper replacement" isn't automatically expected to do lots of things that systemd does. That damage is done. We got "better is worse" and enough people liked it-- good luck trying to go back to "worse is better"

tfb , 13 hrs
I presume they were waiting to see what happened to Solaris. When Oracle bought Sun (presumably the only other company who might have bought them was IBM) there were really three enterprise unixoid platforms: Solaris, AIX and RHEL (there were some smaller ones and some which were clearly dying like HPUX). It seemed likely at the time, but not yet certain, that Solaris was going to die (I worked for Sun at the time this happened and that was my opinion anyway). If Solaris did die, then if one company owned both AIX and RHEL then that company would own the enterprise unixoid market. If Solaris didn't die on the other hand then RHEL would be a lot less valuable to IBM as there would be meaningful competition. So, obviously, they waited to see what would happen.

Well, Solaris is perhaps not technically quite dead yet but certainly is moribund, and IBM now owns both AIX and RHEL & hence the enterprise unixoid market. As an interesting side-note, unless Oracle can keep Solaris on life-support this means that IBM own all-but own Oracle's OS as well ('Oracle Linux' is RHEL with, optionally, some of their own additions to the kernel).

[Oct 30, 2018] IBM's Red Hat acquisition is a 'desperate deal,' says analyst

Notable quotes:
"... "It's a desperate deal by a company that missed the boat for the last five years," the managing director at BTIG said on " Closing Bell ." "I'm not surprised that they bought Red Hat , I'm surprised that it took them so long. They've been behind the cloud eight ball." ..."
Oct 30, 2018 | www.cnbc.com
IBM's $34 billion acquisition of Red Hat is a last-ditch effort by IBM to play catch-up in the cloud industry, analyst Joel Fishbein told CNBC on Monday.

"It's a desperate deal by a company that missed the boat for the last five years," the managing director at BTIG said on " Closing Bell ." "I'm not surprised that they bought Red Hat , I'm surprised that it took them so long. They've been behind the cloud eight ball."

This is IBM's largest deal ever and the third-biggest tech deal in the history of the United States. IBM is paying more than a 60 percent premium for the software maker, but CEO Ginni Rometty told CNBC earlier in the day it was a "fair price."

[Oct 30, 2018] Sam Palmisano now infamous Roadmap 2015 ran the company into the ground through its maniacal focus on increasing EPS at any and all costs. Literally.

Oct 30, 2018 | features.propublica.org

GoingGone , Friday, April 13, 2018 6:06 PM

As a 25yr+ vet of IBM, I can confirm that this article is spot-on true. IBM used to be a proud and transparent company that clearly demonstrated that it valued its employees as much as it did its stock performance or dividend rate or EPS, simply because it is good for business. Those principles helped make and keep IBM atop the business world as the most trusted international brand and business icon of success for so many years. In 2000, all that changed when Sam Palmisano became the CEO. Palmisano's now infamous "Roadmap 2015" ran the company into the ground through its maniacal focus on increasing EPS at any and all costs. Literally.

Like, its employees, employee compensation, benefits, skills, and education opportunities. Like, its products, product innovation, quality, and customer service.

All of which resulted in the devastation of its technical capability and competitiveness, employee engagement, and customer loyalty. Executives seemed happy enough as their compensation grew nicely with greater financial efficiencies, and Palisano got a sweet $270M+ exit package in 2012 for a job well done.

The new CEO, Ginni Rometty has since undergone a lot of scrutiny for her lack of business results, but she was screwed from day one. Of course, that doesn't leave her off the hook for the business practices outlined in the article, but what do you expect: she was hand picked by Palmisano and approved by the same board that thought Palmisano was golden.

People (and companies) who have nothing to hide, hide nothing. People (and companies) who are proud of their actions, share it proudly. IBM believes it is being clever and outsmarting employment discrimination laws and saving the company money while retooling its workforce. That may end up being so (but probably won't), but it's irrelevant. Through its practices, IBM has lost the trust of its employees, customers, and ironically, stockholders (just ask Warren Buffett), who are the very(/only) audience IBM was trying to impress. It's just a huge shame.

HiJinks , Sunday, March 25, 2018 3:07 AM
I agree with many who state the report is well done. However, this crap started in the early 1990s. In the late 1980s, IBM offered decent packages to retirement eligible employees. For those close to retirement age, it was a great deal - 2 weeks pay for every year of service (capped at 26 years) plus being kept on to perform their old job for 6 months (while collecting retirement, until the government stepped in an put a halt to it). Nobody eligible was forced to take the package (at least not to general knowledge). The last decent package was in 1991 - similar, but not able to come back for 6 months. However, in 1991, those offered the package were basically told take it or else. Anyone with 30 years of service or 15 years and 55 was eligible and anyone within 5 years of eligibility could "bridge" the difference. They also had to sign a form stating they would not sue IBM in order to get up to a years pay - not taxable per IRS documents back then (but IBM took out the taxes anyway and the IRS refused to return - an employee group had hired lawyers to get the taxes back, a failed attempt which only enriched the lawyers). After that, things went downhill and accelerated when Gerstner took over. After 1991, there were still a some workers who could get 30 years or more, but that was more the exception. I suspect the way the company has been run the past 25 years or so has the Watsons spinning in their graves. Gone are the 3 core beliefs - "Respect for the individual", "Service to the customer" and "Excellence must be a way of life".
ArnieTracey , Saturday, March 24, 2018 7:15 PM
IBM's policy reminds me of the "If a citizen = 30 y.o., then mass execute such, else if they run then hunt and kill them one by one" social policy in the Michael York movie "Logan's Run."

From Wiki, in case you don't know: "It depicts a utopian future society on the surface, revealed as a dystopia where the population and the consumption of resources are maintained in equilibrium by killing everyone who reaches the age of 30. The story follows the actions of Logan 5, a "Sandman" who has terminated others who have attempted to escape death, and is now faced with termination himself."

Jr Jr , Saturday, March 24, 2018 4:37 PM
Corporate loyalty has been gone for 25 years. This isnt surprising. But this age discrimination is blatantly illegal.

[Oct 30, 2018] This might just be the deal that kills IBM because there's no way that they don't do a writedown of 90% of the value of this acquisition within 5 years.

Oct 30, 2018 | arstechnica.com

afidel, 2018-10-29T13:17:22-04:00

tipoo wrote:
Kilroy420 wrote:
Perhaps someone can explain this... Red Hat's revenue and assets barely total about $5B. Even factoring in market share and capitalization, how the hey did IBM come up with $34B cash being a justifiable purchase price??

Honestly, why would Red Hat have said no?

You don't trade at your earnings, you trade at your share price, which for Red Hat and many other tech companies can be quite high on Price/Earnings. They were trading at 52 P/E. Investors factor in a bunch of things involving future growth, and particularly for any companies in the cloud can quite highly overvalue things.

A 25 year old company trading at a P/E of 52 was already overpriced, buying at more than 2x that is insane. This might just be the deal that kills IBM because there's no way that they don't do a writedown of 90% of the value of this acquisition within 5 years.

[Oct 30, 2018] The insttuinaliuzed stupidity of IBM brass is connected with the desire to get bonuses

Oct 30, 2018 | arstechnica.com

3 hours ago afidel wrote: show nested quotes Kilroy420 wrote: Perhaps someone can explain this... Red Hat's revenue and assets barely total about $5B. Even factoring in market share and capitalization, how the hey did IBM come up with $34B cash being a justifiable purchase price??

Honestly, why would Red Hat have said no?

You don't trade at your earnings, you trade at your share price, which for Red Hat and many other tech companies can be quite high on Price/Earnings. They were trading at 52 P/E. Investors factor in a bunch of things involving future growth, and particularly for any companies in the cloud can quite highly overvalue things.
A 25 year old company trading at a P/E of 52 was already overpriced, buying at more than 2x that is insane. This might just be the deal that kills IBM because there's no way that they don't do a writedown of 90% of the value of this acquisition within 5 years.

OK. I did 10 years at IBM Boulder..

The problem isn't the purchase price or the probable write-down later.

The problem is going to be with the executives above it. One thing I noticed at IBM is that the executives needed to put their own stamp on operations to justify their bonuses. We were on a 2 year cycle of execs coming in and saying "Whoa.. things are too centralized, we need to decentralize", then the next exec coming in and saying "things are too decentralized, we need to centralize".

No IBM exec will get a bonus if they are over RedHat and exercise no authority over it. "We left it alone" generates nothing for the PBC. If they are in the middle of a re-org, then the specific metrics used to calculate their bonus can get waived. (Well, we took an unexpected hit this year on sales because we are re-orging to better optimize our resources). With that P/E, no IBM exec is going to get a bonus based on metrics. IBM execs do *not* care about what is good for IBM's business. They are all about gaming the bonuses. Customers aren't even on the list of things they care about.

I am reminded of a coworker who quit in frustration back in the early 2000's due to just plain bad management. At the time, IBM was working on Project Monterey. This was supposed to be a Unix system across multiple architectures. My coworker sent his resignation out to all hands basically saying "This is stupid. we should just be porting Linux". He even broke down the relative costs. Billions for Project Monterey vs thousands for a Linux port. Six months later, we get an email from on-high announcing this great new idea that upper management had come up with. It would be far cheaper to just support Linux than write a new OS.. you'd think that would be a great thing, but the reality is that all it did was create the AIX 5L family, which was AIX 5 with an additional CD called Linux ToolBox, which was loaded with a few Linux programs ported to a specific version of AIX, but never kept current. IBM can make even great decisions into bad decisions.

In May 2007, IBM announced the transition to LEAN. Sounds great, but this LEAN was not on the manufacturing side of the equation. It was in e-Business under Global Services. The new procedures were basically call center operations. Now, prior to this, IBM would have specific engineers for specific accounts. So, Major Bank would have that AIX admin, that Sun admin, that windows admin, etc. They knew who to call and those engineers would have docs and institutional knowledge of that account. During the LEAN announcement, Bob Moffat described the process. Accounts would now call an 800 number and the person calling would open a ticket. This would apply to *any* work request as all the engineers would be pooled and whoever had time would get the ticket. So, reset a password - ticket. So, load a tape - ticket. Install 20 servers - ticket.

Now, the kicker to this was that the change was announced at 8AM and went live at noon. IBM gave their customers who represented over $12 Billion in contracts 4 *hours* notice that they were going to strip their support teams and treat them like a call center. (I will leave it as an exercise to the reader to determine if they would accept that kind of support after spending hundreds of millions on a support contract).

(The pilot program for the LEAN process had its call center outsourced overseas, if that helps you try to figure out why IBM wanted to get rid of dedicated engineers and move to a call-center operation).

[Oct 30, 2018] Presumably the acquisition will have to jump various regulatory hurdles before it is set in stone. If it is successful, Red Hat will be absorbed into IBM's Hybrid Cloud unit

IBM will have to work hard to overcome RH customers' natural (and IMHO largely justified) suspicion of Big Blue.
Notable quotes:
"... focused its workforce on large "hub" cities where graduate engineers prefer to live – New York City, San Francisco, and Austin, in the US for instance – which allowed it to drive out older, settled staff who refused to move closer to the office. ..."
"... The acquisition of Sun Microsystems by Oracle comes to mind there. ..."
"... When Microsoft bought out GitHub, they made a promise to let it run independently and now IBM's given a similar pledge in respect of RedHat. They ought to abide by that promise because the alternatives are already out there in the form of Ubuntu and SUSE Linux Enterprise Server. ..."
Oct 30, 2018 | theregister.co.uk

...That transformation has led to accusations of Big Blue ditching its older staff for newer workers to somehow spark some new energy within it. It also cracked down on remote employees , and focused its workforce on large "hub" cities where graduate engineers prefer to live – New York City, San Francisco, and Austin, in the US for instance – which allowed it to drive out older, settled staff who refused to move closer to the office.

Ledswinger, 1 day

Easy, the same way they deal with their existing employees. It'll be the IBM way or the highway. We'll see the usual repetitive and doomed IBM strategy of brutal downsizings accompanied by the earnest IBM belief that a few offshore wage slaves can do as good a job as anybody else.

The product and service will deteriorate, pricing will have to go up significantly to recover the tens of billions of dollars of "goodwill" that IBM have just splurged, and in five years time we'll all be saying "remember how the clueless twats at IBM bought Red Hat and screwed it up?"

One of IBM's main problems is lack of revenue, and yet Red Hat only adds about $3bn to their revenue. As with most M&A the motivators here are a surplus of cash and hopeless optimism, accompanied by the suppression of all common sense.

Well done Gini, it's another winner.

TVU, 12 hrs
Re: "they will buy a lot of talent."

"What happens over the next 12 -- 24 months will be ... interesting. Usually the acquisition of a relatively young, limber outfit with modern product and service by one of the slow-witted traditional brontosaurs does not end well"

The acquisition of Sun Microsystems by Oracle comes to mind there.

When Microsoft bought out GitHub, they made a promise to let it run independently and now IBM's given a similar pledge in respect of RedHat. They ought to abide by that promise because the alternatives are already out there in the form of Ubuntu and SUSE Linux Enterprise Server.

[Oct 30, 2018] About time: Red Hat support was bad alread

Oct 30, 2018 | theregister.co.uk
Anonymous Coward, 15 hrs

and the support goes bad already...

Someone (RH staff, or one of the Gods) is unhappy with the deal: Red Hat's support site has been down all day.

https://status.redhat.com

[Oct 30, 2018] Purple rain will fall from that blue cloud

Notable quotes:
"... IBM was already "working on Linux." For decades. With multiple hundreds of full-time Linux developers--more than any other corporate contributor--around the world. And not just on including IBM-centric function into Linux, but on mainstream community projects. There have been lots of Linux people in IBM since the early-90's. ..."
"... From a customer standpoint the main thing RedHat adds is formal support. There are still a lot of companies who are uncomfortable deploying an OS that has product support only from StackExchange and web forums ..."
"... You would do better to look at the execution on the numbers - RedHat is not hitting it's targets and there are signs of trouble. These two businesses were both looking for a prop and the RedHat shareholders are getting out while the business is near it's peak. ..."
Oct 30, 2018 | theregister.co.uk

Anonymous Coward , 6 hrs

Re: So exactly how is IBM going to tame employees that are used to going to work in shorts...

Purple rain will fall from that cloud...

asdf , 5 hrs
Wow bravo brutal and accurate. +1
I can't believe its not butter , 1 day
Redhat employees - get out now

You're utterly fucked. Run away now as you have zero future in IBM.

Anonymous Coward , 1 day
Re: Redhat employees - get out now

You're utterly fucked. Run away now as you have zero future in IBM.

That was my immediate thought upon hearing this. I've already worked for IBM, swore never to do it again. Time to dust off & update the resume.

Jove , 19 hrs
Re: Redhat employees - get out now

Another major corporate splashes out a fortune on a star business only to find the clash of cultures destroys substantial value.

W@ldo , 1 day
Re: At least is isnt oracle or M$

Sort of the lesser of evils---do you want to be shot or hung by the neck? No good choice for this acquisition.

Anonymous Coward , 1 day
Re: At least is isnt oracle or M$

honestly, MS would be fine. They're big into Linux and open source and still a heavily pro-engineering company.

Companies like Oracle and IBM are about nothing but making money. Which is why they're both going down the tubes. No-one who doesn't already have them goes near them.

Uncle Ron , 14 hrs
Re: At least is isnt oracle or M$

IBM was already "working on Linux." For decades. With multiple hundreds of full-time Linux developers--more than any other corporate contributor--around the world. And not just on including IBM-centric function into Linux, but on mainstream community projects. There have been lots of Linux people in IBM since the early-90's.

Orv , 9 hrs
Re: At least it is not Oracle or M$

The OS is from Linus and chums, Redhat adds a few storage bits and some Redhat logos and erm.......

From a customer standpoint the main thing RedHat adds is formal support. There are still a lot of companies who are uncomfortable deploying an OS that has product support only from StackExchange and web forums. This market is fairly insensitive to price, which is good for a company like RedHat. (Although there has been an exodus of higher education customers as the price has gone up; like Sun did back in the day, they've been squeezing out that market. Two campuses I've worked for have switched wholesale to CentOS.)

Jove , 11 hrs
RedHat take-over IBM - @HmmmYes

"Just compare the share price of RH v IBM"

You would do better to look at the execution on the numbers - RedHat is not hitting it's targets and there are signs of trouble. These two businesses were both looking for a prop and the RedHat shareholders are getting out while the business is near it's peak.

[Oct 30, 2018] Pay your licensing fee

Oct 30, 2018 | linux.slashdot.org

red crab ( 1044734 ) , Monday October 29, 2018 @12:10AM ( #57552797 )

Re:Pay your licensing fee ( Score: 4 , Interesting)

Footnote: $699 License Fee applies to your systemP server running RHEL 7 with 4 cores activated for one year.

To activate additional processor cores on the systemP server, a fee of $199 per core applies. systemP offers a new Semi-Activation Mode now. In systemP Semi-Activation Mode, you will be only charged for all processor calls exceeding 258 MIPS, which will be processed by additional semi-activated cores on a pro-rata basis.

RHEL on systemP servers also offers a Partial Activation Mode, where additional cores can be activated in Inhibited Efficiency Mode.

To know more about Semi-Activation Mode, Partial Activation Mode and Inhibited Efficiency Mode, visit http://www.ibm.com/systemp [ibm.com] or contact your IBM systemP Sales Engineer.

[Oct 30, 2018] $34B? I was going to say this is the biggest tech acquisition ever, but it's second after Dell buying EMC

Notable quotes:
"... I'm not too sure what IBM is going to do with that, but congrats to whoever is getting the money... ..."
Oct 30, 2018 | theregister.co.uk

ratfox , 1 day

$34B? I was going to say this is the biggest tech acquisition ever, but it's second after Dell buying EMC. I'm not too sure what IBM is going to do with that, but congrats to whoever is getting the money...

[Oct 30, 2018] "OMG" comments rests on three assumptions: Red Hat is 100% brilliant and speckless, IBM is beyond hope and unchangeable, this is a hostile takeover

Notable quotes:
"... But I do beg to differ about the optimism, because, as my boss likes to quote, "culture eats strategy for breakfast". ..."
"... So the problem is that IBM have bought a business whose competencies and success factors differ from the IBM core. Its culture is radically different, and incompatible with IBM. ..."
"... Many of its best employees will be hostile to IBM ..."
"... And just like a gas giant, IBM can be considered a failed star ..."
Oct 30, 2018 | theregister.co.uk

LeoP , 1 day

Less pessimistic here

Quite a lot of the "OMG" moments rests on three assumptions:

I beg to differ on all counts. Call me beyond hope myself because of my optimism, but I do think what IBM bought most is a way to run a business. RH is just too big to be borged into a failing giant without leaving quite a substantial mark.

Ledswinger , 1 day
Re: Less pessimistic here

I beg to differ on all counts.

Note: I didn't downvote you, its a valid argument. I can understand why you think that, because I'm in the minority that think the IBM "bear" case is overdone. They've been cleaning their stables for some years now, and that means dropping quite a lot of low margin business, and seeing the topline shrink. That attracts a lot of criticism, although it is good business sense.

But I do beg to differ about the optimism, because, as my boss likes to quote, "culture eats strategy for breakfast".

And (speaking as a strategist) that's 100% true, and 150% true when doing M&A.

So the problem is that IBM have bought a business whose competencies and success factors differ from the IBM core. Its culture is radically different, and incompatible with IBM.

Many of its best employees will be hostile to IBM . RedHat will be borged, and it will leave quite a mark. A bit like Shoemaker-Levi did on Jupiter. Likewise there will be lots of turbulence, but it won't endure, and at the end of it all the gas giant will be unchanged (just a bit poorer). And just like a gas giant, IBM can be considered a failed star .

[Oct 30, 2018] If IBM buys Redhat then what will happen to CentOS?

Notable quotes:
"... As long as IBM doesn't close-source RH stuff -- most of which they couldn't if they wanted to -- CentOS will still be able to do builds of it. The only thing RH can really enforce control over is the branding and documentation. ..."
"... Might be a REALLY good time to fork CentOS before IBM pulls an OpenSolaris on it. Same thing with Fedora. ..."
"... I used to be a Solaris admin. Now I am a linux admin in a red hat shop. Sun was bought by Oracle and more or less died a death. Will the same happen now? I know that Sun and RH are _very_ differeht beasts but I am thinking that now is the time to stop playing on the merry go round called systems administration. ..."
Oct 30, 2018 | theregister.co.uk

Orv , 9 hrs

Re: If IBM buys Redhat then what will happen to CentOS?

If IBM buys Redhat then what will happen to CentOS?

As long as IBM doesn't close-source RH stuff -- most of which they couldn't if they wanted to -- CentOS will still be able to do builds of it. The only thing RH can really enforce control over is the branding and documentation.

Anonymous Coward , 9 hrs
Re: "they will buy a lot of talent."

"I found that those with real talent that matched IBM needs are well looked after."

The problem is that when you have served your need you tend to get downsized as the expectation is that the cheaper offshore bodies can simply take over support etc after picking up the skills they need over a few months !!!

This 'Blue meets Red and assimilates' will be very interesting to watch and will need lots and lots of popcorn on hand !!!

:)

FrankAlphaXII , 1 day
Might be a REALLY good time to fork CentOS before IBM pulls an OpenSolaris on it. Same thing with Fedora.

Kind of sad really, when I used Linux CentOS and Fedora were my go-to distros.

Missing Semicolon , 1 day
Goodbye Centos

Centos is owned by RedHat now. So why on earth would IBM bother keeping it?

Plus, of course, all the support and coding will be done in India now.....

Doctor Syntax , 17 hrs
Re: Goodbye Centos

"Centos is owned by RedHat now."

RedHat is The Upstream Vendor of Scientific Linux. What happens to them if IBM turn nasty?

Anonymous Coward , 16 hrs
Re: Scientific Linux

Scientific Linux is a good idea in theory, dreadful in practice.

The idea of a research/academic-software-focused distro is a good one: unfortunately (I say unfortunately, but it's certainly what I would do myself), increasing numbers of researchers are now developing their pet projects on Debian or Ubuntu, and so therefore often only make .deb packages available.

Anyone who has had any involvement in research software knows that if you find yourself in the position of needing to compile someone else's pet project from source, you are often in for an even more bumpy ride than usual.

And the lack of compatible RPM packages just encourages more and more researchers to go where the packages (and the free-ness) are, namely Debian and friends, which continue to gather momentum, while Red Hat continues to stagnate.

Red Hat may be very stable for running servers (as long as you don't need anything reasonably new (not bleeding edge, but at least newer than three years old)), but I have never really seen the attraction in it myself (especially as there isn't much of a "community" feeling around it, as its commercial focus gets in the way).

Roger Kynaston , 1 day
another buy out of my bread and butter

I used to be a Solaris admin. Now I am a linux admin in a red hat shop. Sun was bought by Oracle and more or less died a death. Will the same happen now? I know that Sun and RH are _very_ differeht beasts but I am thinking that now is the time to stop playing on the merry go round called systems administration.

Anonymous Coward , 1 day
Don't become a Mad Hatter

Dear Red Hatters, welcome to the world of battery hens, all clucking and clicking away to produce the elusive golden egg while the axe looms over their heads. Even if your mental health survives, you will become chicken feed by the time you are middle aged. IBM doesn't have a heart; get out while you can. Follow the example of IBMers in Australia who are jumping ship in their droves, leaving behind a crippled, demoralised workforce. Don't become a Mad Hatter.

[Oct 30, 2018] Kind of surprising since IBM was aligned with SUSE for so many years.

Oct 30, 2018 | arstechnica.com

tgx Ars Centurion reply 5 hours ago

Kind of surprising since IBM was aligned with SUSE for so many years.

IBM is an awful software company. OS/2, Lotus Notes, AIX all withered on the vine.

Doesn't bode well for RedHat.

[Oct 30, 2018] Hello, we are mandating some new policies, git can no longer be used, we must use IBM synergy software with rational rose

Oct 30, 2018 | arstechnica.com

lordofshadows , Smack-Fu Master, in training 6 hours ago

Hello, we are mandating some new policies, git can no longer be used, we must use IBM synergy software with rational rose.

All open source software is subject to corporate approval first, we know we know, to help streamline this process we have approved GNU CC and are looking into this Mak file program.

We are very pleased with systemd, we wish to further expand it's dhcp capabilities and also integrate IBM analytics -- We are also going through a rebranding operation as we feel the color red is too jarring for our customers, we will now be known as IBM Rational Hat and will only distribute through our retail channels to boost sales -- Look for us at walmart, circuit city, and staples

[Oct 30, 2018] And RH customers will want to check their contracts...

Oct 30, 2018 | arstechnica.com

CousinSven , Smack-Fu Master, in training et Subscriptor 4 hours ago New Poster

IBM are paying around 12x annual revenue for Red Hat which is a significant multiple so they will have to squeeze more money out of the business somehow. Either they grow customers or they increase margins or both.

IBM had little choice but to do something like this. They are in a terminal spiral thanks to years of bad leadership. The confused billing of the purchase smacks of rush, so far I have seen Red Hat described as a cloud company, an info sec company, an open source company...

So IBM are buying Red Hat as a last chance bid to avoid being put through the PE threshing machine. Red Hat get a ludicrous premium so will take the money.

And RH customers will want to check their contracts...

[Oct 30, 2018] IBM To Buy Red Hat, the Top Linux Distributor, For $34 Billion

Notable quotes:
"... IBM license fees are predatory. Plus they require you to install agents on your servers for the sole purpose of calculating use and licenses. ..."
"... IBM exploits workers by offshoring and are slow to fix bugs and critical CVEs ..."
Oct 30, 2018 | linux.slashdot.org

Anonymous Coward , Sunday October 28, 2018 @03:34PM ( #57550555 )

Re: Damn. ( Score: 5 , Insightful)

IBM license fees are predatory. Plus they require you to install agents on your servers for the sole purpose of calculating use and licenses.

IBM exploits workers by offshoring and are slow to fix bugs and critical CVEs (WAS and DB2 especially)

The Evil Atheist ( 2484676 ) , Sunday October 28, 2018 @04:13PM ( #57550755 ) Homepage
Re:Damn. ( Score: 4 , Insightful)

IBM buys a company, fires all the transferred employees and hopes they can keep selling their acquired software without further development. If they were serious, they'd have improved their own Linux contribution efforts.

But they literally think they can somehow keep selling software without anyone with knowledge of the software, or for transferring skills to their own employees.

They literally have no interest in actual software development. It's all about sales targets.

Anonymous Coward , Monday October 29, 2018 @01:00AM ( #57552963 )
Re:Damn. ( Score: 3 , Informative)

My advice to Red Hat engineers is to get out now. I was an engineer at a company that was acquired by IBM. I was fairly senior so I stayed on and ended up retiring from the IBM, even though I hated my last few years working there. I worked for several companies during my career, from startups to fortune 100 companies. IBM was the worst place I worked by far. Consider every bad thing you've ever heard about IBM. I've heard those things too, and the reality was much worse.

IBM hasn't improved their Linux contribution efforts because it wouldn't know how. It's not for lack of talented engineers. The management culture is simply pathological. No dissent is allowed. Everyone lives in fear of a low stack ranking and getting laid off. In the end it doesn't matter anyway. Eventually the product you work on that they originally purchased becomes unprofitable and they lay you off anyway. They've long forgotten how to develop software on their own. Don't believe me? Try to think of an IBM branded software product that they built from the ground up in the last 25 years that has significant market share. Development managers chase one development fad after another hoping to find the silver bullet that will allow them to continue the relentless cost cutting regime made necessary in order to make up revenue that has been falling consistently for over a decade now.

As far as I could tell, IBM is good at two things:

  1. Financial manipulation to disguise there shrinking revenue
  2. Buying software companies and mining them for value

Yes, there are still some brilliant people that work there. But IBM is just not good at turning ideas into revenue producing products. They are nearly always unsuccessful when they try and then the go out and buy a company the succeeded in bring to market the kind of product that they tried and failed to build themselves.

They used to be good at customer support, but that is mainly lip service now. Just before I left the company I was tapped to deliver a presentation at a customer seminar. The audience did not care much about my presentation. The only thing they wanted to talk about was how much they had invested millions in re-engineering their business to use our software and now IBM appeared to be wavering in their long term commitment to supporting the product. It was all very embarrassing because I knew what they didn't, that the amount of development and support resources currently allocated to the product line were a small fraction of what they once were. After having worked there I don't know why anyone would ever want to buy a license for any of their products.

gtall ( 79522 ) , Sunday October 28, 2018 @03:59PM ( #57550691 )
Re:A Cloudy argument. ( Score: 5 , Insightful)

So you are saying that IBM has been asleep at the wheel for the last 8 years. Buying Red Hat won't save them, IBM is IBM's enemy.

Aighearach ( 97333 ) writes:
Re: ( Score: 3 )

They're already one of the large cloud providers, but you don't know that because they only focus on big customers.

The Evil Atheist ( 2484676 ) , Sunday October 28, 2018 @04:29PM ( #57550829 ) Homepage
Re:A Cloudy argument. ( Score: 5 , Insightful)

IBM engineers aren't actually crappy. It's the fucking MBAs in management who have no clue about how to run a software development company. Their engineers will want to do good work, but management will worry more about headcount and sales.

The Evil Atheist ( 2484676 ) , Sunday October 28, 2018 @03:57PM ( #57550679 ) Homepage
Goodbye Redhat. ( Score: 5 , Insightful)

IBM acquisitions never go well. All companies acquired by IBM go through a process of "Blue washing", in which the heart and soul of the acquired company is ripped out, the body burnt, and the remaining ashes to be devoured and defecated by its army of clueless salesmen and consultants. It's a sad, and infuriating, repeated pattern. They no longer develop internal talent. They drive away the remaining people left over from the time when they still did develop things. They think they can just buy their way into a market or technology, somehow completely oblivious to the fact that their strategy of firing all their acquired employees/knowledge and hoping to sell software they have no interest in developing would somehow still retain customers. They literally could have just reshuffled and/or hired more developers to work on the kernel, but the fact they didn't shows they have no intention of actually contributing.

Nkwe ( 604125 ) , Sunday October 28, 2018 @04:26PM ( #57550819 )
Cha-Ching ( Score: 3 )

Red Hat closed Friday at $116.68 per share, looks like the buy out is for $190. Not everyone will be unhappy with this. I hope the Red Hat employees that won't like the upcoming cultural changes have stock and options, it may soften the blow a bit.

DougDot ( 966387 ) writes: < dougr@parrot-farm.net > on Sunday October 28, 2018 @05:43PM ( #57551189 ) Homepage
AIX Redux ( Score: 5 , Interesting)

Oh, good. Now IBM can turn RH into AIX while simultaneously suffocating whatever will be left of Redhat's staff with IBM's crushing, indifferent, incompetent bureaucracy.

This is what we call a lose - lose situation. Well, except for the president of Redhat, of course. Jim Whitehurst just got rich.

Tough Love ( 215404 ) writes: on Sunday October 28, 2018 @10:55PM ( #57552583 )
Re:AIX Redux ( Score: 2 )

Worse than Redhat's crushing, indifferent, incompetent bureaucracy? Maybe, but it's close.

ArchieBunker ( 132337 ) , Sunday October 28, 2018 @06:01PM ( #57551279 ) Homepage
Re:AIX Redux ( Score: 5 , Insightful)

Redhat is damn near AIX already. AIX had binary log files long before systemd.

Antique Geekmeister ( 740220 ) , Monday October 29, 2018 @05:51AM ( #57553587 )
Re:Please God No ( Score: 4 , Informative)

The core CentOS leadership are now Red Hat employees. They're not clear of nor uninvolved in this purchase.

alvinrod ( 889928 ) , Sunday October 28, 2018 @03:46PM ( #57550623 )
Re:Please God No ( Score: 5 , Insightful)

Depends on the state. Non-compete clauses are unenforceable in some jurisdictions. IBM would want some of the people to stick around. You can't just take over a complex system from someone else and expect everything to run smoothly or know how to fix or extend it. Also, not everyone who works at Red Hat gets anything from the buyout unless they were regularly giving employees stock. A lot of people are going to want the stable paycheck of working for IBM instead of trying to start a new company.

However, some will inevitably get sick of working at IBM or end up being laid off at some point. If these people want to keep doing what they're doing, they can start a new company. If they're good at what they do, they probably won't have much trouble attracting some venture capital either.

wyattstorch516 ( 2624273 ) , Sunday October 28, 2018 @04:41PM ( #57550887 )
Re:Please God No ( Score: 2 )

Red Hat went public in 1999, they are far from being a start-up. They have acquired several companies themselves so they are just as corporate as IBM although significantly smaller.

Anonymous Coward , Sunday October 28, 2018 @05:10PM ( #57551035 )
Re:Please God No ( Score: 5 , Funny)

Look on the bright side: Poettering works for Red Hat. (Reposting because apparently Poettering has mod points.)

Anonymous Coward , Monday October 29, 2018 @09:24AM ( #57554491 )
Re: It all ( Score: 5 , Interesting)

My feelings exactly. As a former employee for both places, I see this as the death knell for Red Hat. Not immediately, not quickly, but eventually Red Hat's going to go the same way as every other company IBM has acquired.

Red Hat's doom (again, all IMO) started about 10 years ago or so when Matt Szulik left and Jim Whitehurst came on board. Nothing against Jim, but he NEVER seemed to grasp what F/OSS was about. Hell, when he came onboard he wouldn't (and never did) use Linux at all: instead he used a Mac, and so did the rest of the EMT (executive management team) over time. What company is run by people who refuse to use its own product except for one that doesn't have faith. The person on top of the BRAND AND PEOPLE team "needed" an iPad, she said, to do her work (quoting a friend in the IT dept who was asked to get it and set it up for her).

Then when they (the EMTs) wanted to move away from using F/OSS internally to outsourcing huge aspects of our infrastructure (like no longer using F/OSS for email and instead contracting with GOOGLE to do our email, calendaring and document sharing) is when, again for me, the plane started to spiral. How can we sell to OUR CUSTOMERS the idea that "Red Hat and F/OSS will suit all of your corporate needs" when, again, the people running the ship didn't think it would work for OURS? We had no special email or calendar needs, and if we did WE WERE THE LEADERS OF OPEN SOURCE, couldn't we make it do what we want? Hell, I was on an internal (but on our own time) team whose goal was to take needs like this and incubate them with an open source solution to meet that need.

But the EMTs just didn't want to do that. They were too interested in what was "the big thing" (at the time Open Shift was where all of our hiring and resources were being poured) to pay attention to the foundations that were crumbling.

And now, here we are. Red Hat is being subsumed by the largest closed-source company on the planet, one who does their job sub-optimally (to be nice). This is the end of Red Hat as we know it. Without 5-7 years Red Hat will go the way of Tivoli and Lotus: it will be a brand name that lacks any of what made the original company what it was when it was acquired.

[Oct 30, 2018] Why IBM did do the same as Oracle?

Notable quotes:
"... Just fork it, call it Blue Hat Linux, and rake in those sweet support dollars. ..."
Oct 30, 2018 | arstechnica.com

Twilight Sparkle , Ars Scholae Palatinae 4 hours ago

Why would you pay even 34 dollars for software worth $0?

Just fork it, call it Blue Hat Linux, and rake in those sweet support dollars.

[Oct 30, 2018] Soon after I started, the company fired hundreds of 50-something employees and put we "kids" in their jobs. Seeing that employee loyalty was a one way street at that place, I left after a couple of years. Best career move I ever made.

Oct 30, 2018 | features.propublica.org

Al Romig , Wednesday, April 18, 2018 5:20 AM

As a new engineering graduate, I joined a similar-sized multinational US-based company in the early '70s. Their recruiting pitch was, "Come to work here, kid. Do your job, keep your nose clean, and you will enjoy great, secure work until you retire on easy street".

Soon after I started, the company fired hundreds of 50-something employees and put we "kids" in their jobs. Seeing that employee loyalty was a one way street at that place, I left after a couple of years. Best career move I ever made.

GoingGone , Friday, April 13, 2018 6:06 PM
As a 25yr+ vet of IBM, I can confirm that this article is spot-on true. IBM used to be a proud and transparent company that clearly demonstrated that it valued its employees as much as it did its stock performance or dividend rate or EPS, simply because it is good for business. Those principles helped make and keep IBM atop the business world as the most trusted international brand and business icon of success for so many years. In 2000, all that changed when Sam Palmisano became the CEO. Palmisano's now infamous "Roadmap 2015" ran the company into the ground through its maniacal focus on increasing EPS at any and all costs. Literally. Like, its employees, employee compensation, benefits, skills, and education opportunities. Like, its products, product innovation, quality, and customer service. All of which resulted in the devastation of its technical capability and competitiveness, employee engagement, and customer loyalty. Executives seemed happy enough as their compensation grew nicely with greater financial efficiencies, and Palisano got a sweet $270M+ exit package in 2012 for a job well done. The new CEO, Ginni Rometty has since undergone a lot of scrutiny for her lack of business results, but she was screwed from day one. Of course, that doesn't leave her off the hook for the business practices outlined in the article, but what do you expect: she was hand picked by Palmisano and approved by the same board that thought Palmisano was golden.
Paul V Sutera , Tuesday, April 3, 2018 7:33 PM
In 1994, I saved my job at IBM for the first time, and survived. But I was 36 years old. I sat down at the desk of a man in his 50s, and found a few odds and ends left for me in the desk. Almost 20 years later, it was my turn to go. My health and well-being is much better now. Less money but better health. The sins committed by management will always be: "I was just following orders".

[Oct 30, 2018] IBM age discrimination

Notable quotes:
"... Correction, March 24, 2018: Eileen Maroney lives in Aiken, South Carolina. The name of her city was incorrect in the original version of this story. ..."
Oct 30, 2018 | features.propublica.org

Consider, for example, a planning presentation that former IBM executives said was drafted by heads of a business unit carved out of IBM's once-giant software group and charged with pursuing the "C," or cloud, portion of the company's CAMS strategy.

The presentation laid out plans for substantially altering the unit's workforce. It was shown to company leaders including Diane Gherson, the senior vice president for human resources, and James Kavanaugh, recently elevated to chief financial officer. Its language was couched in the argot of "resources," IBM's term for employees, and "EP's," its shorthand for early professionals or recent college graduates.

Among the goals: "Shift headcount mix towards greater % of Early Professional hires." Among the means: "[D]rive a more aggressive performance management approach to enable us to hire and replace where needed, and fund an influx of EPs to correct seniority mix." Among the expected results: "[A] significant reduction in our workforce of 2,500 resources."

A slide from a similar presentation prepared last spring for the same leaders called for "re-profiling current talent" to "create room for new talent." Presentations for 2015 and 2016 for the 50,000-employee software group also included plans for "aggressive performance management" and emphasized the need to "maintain steady attrition to offset hiring."

IBM declined to answer questions about whether either presentation was turned into company policy. The description of the planned moves matches what hundreds of older ex-employees told ProPublica they believe happened to them: They were ousted because of their age. The company used their exits to hire replacements, many of them young; to ship their work overseas; or to cut its overall headcount.

Ed Alpern, now 65, of Austin, started his 39-year run with IBM as a Selectric typewriter repairman. He ended as a project manager in October of 2016 when, he said, his manager told him he could either leave with severance and other parting benefits or be given a bad job review -- something he said he'd never previously received -- and risk being fired without them.

Albert Poggi, now 70, was a three-decade IBM veteran and ran the company's Palisades, New York, technical center where clients can test new products. When notified in November of 2016 he was losing his job to layoff, he asked his bosses why, given what he said was a history of high job ratings. "They told me," he said, "they needed to fill it with someone newer."

The presentations from the software group, as well as the stories of ex-employees like Alpern and Poggi, square with internal documents from two other major IBM business units. The documents for all three cover some or all of the years from 2013 through the beginning of 2018 and deal with job assessments, hiring, firing and layoffs.

The documents detail practices that appear at odds with how IBM says it treats its employees. In many instances, the practices in effect, if not intent, tilt against the company's older U.S. workers.

For example, IBM spokespeople and lawyers have said the company never considers a worker's age in making decisions about layoffs or firings.

But one 2014 document reviewed by ProPublica includes dates of birth. An ex-IBM employee familiar with the process said executives from one business unit used it to decide about layoffs or other job changes for nearly a thousand workers, almost two-thirds of them over 50.

Documents from subsequent years show that young workers are protected from cuts for at least a limited period of time. A 2016 slide presentation prepared by the company's global technology services unit, titled "U.S. Resource Action Process" and used to guide managers in layoff procedures, includes bullets for categories considered "ineligible" for layoff. Among them: "early professional hires," meaning recent college graduates.

In responding to age-discrimination complaints that ex-employees file with the EEOC, lawyers for IBM say that front-line managers make all decisions about who gets laid off, and that their decisions are based strictly on skills and job performance, not age.

But ProPublica reviewed spreadsheets that indicate front-line managers hardly acted alone in making layoff calls. Former IBM managers said the spreadsheets were prepared for upper-level executives and kept continuously updated. They list hundreds of employees together with codes like "lift and shift," indicating that their jobs were to be lifted from them and shifted overseas, and details such as whether IBM's clients had approved the change.

An examination of several of the spreadsheets suggests that, whatever the criteria for assembling them, the resulting list of those marked for layoff was skewed toward older workers. A 2016 spreadsheet listed more than 400 full-time U.S. employees under the heading "REBAL," which refers to "rebalancing," the process that can lead to laying off workers and either replacing them or shifting the jobs overseas. Using the job search site LinkedIn, ProPublica was able to locate about 100 of these employees and then obtain their ages through public records. Ninety percent of those found were 40 or older. Seventy percent were over 50.

IBM frequently cites its history of encouraging diversity in its responses to EEOC complaints about age discrimination. "IBM has been a leader in taking positive actions to ensure its business opportunities are made available to individuals without regard to age, race, color, gender, sexual orientation and other categories," a lawyer for the company wrote in a May 2017 letter. "This policy of non-discrimination is reflected in all IBM business activities."

But ProPublica found at least one company business unit using a point system that disadvantaged older workers. The system awarded points for attributes valued by the company. The more points a person garnered, according to the former employee, the more protected she or he was from layoff or other negative job change; the fewer points, the more vulnerable.

The arrangement appears on its face to favor younger newcomers over older veterans. Employees were awarded points for being relatively new at a job level or in a particular role. Those who worked for IBM for fewer years got more points than those who'd been there a long time.

The ex-employee familiar with the process said a 2014 spreadsheet from that business unit, labeled "IBM Confidential," was assembled to assess the job prospects of more than 600 high-level employees, two-thirds of them from the U.S. It included employees' years of service with IBM, which the former employee said was used internally as a proxy for age. Also listed was an assessment by their bosses of their career trajectories as measured by the highest job level they were likely to attain if they remained at the company, as well as their point scores.

The tilt against older workers is evident when employees' years of service are compared with their point scores. Those with no points and therefore most vulnerable to layoff had worked at IBM an average of more than 30 years; those with a high number of points averaged half that.

Perhaps even more striking is the comparison between employees' service years and point scores on the one hand and their superiors' assessments of their career trajectories on the other.

Along with many American employers, IBM has argued it needs to shed older workers because they're no longer at the top of their games or lack "contemporary" skills.

But among those sized up in the confidential spreadsheet, fully 80 percent of older employees -- those with the most years of service but no points and therefore most vulnerable to layoff -- were rated by superiors as good enough to stay at their current job levels or be promoted. By contrast, only a small percentage of younger employees with a high number of points were similarly rated.

"No major company would use tools to conduct a layoff where a disproportionate share of those let go were African Americans or women," said Cathy Ventrell-Monsees, senior attorney adviser with the EEOC and former director of age litigation for the senior lobbying giant AARP. "There's no difference if the tools result in a disproportionate share being older workers."

In addition to the point system that disadvantaged older workers in layoffs, other documents suggest that IBM has made increasingly aggressive use of its job-rating machinery to pave the way for straight-out firings, or what the company calls "management-initiated separations." Internal documents suggest that older workers were especially targets.

Like in many companies, IBM employees sit down with their managers at the start of each year and set goals for themselves. IBM graded on a scale of 1 to 4, with 1 being top-ranked.

Those rated as 3 or 4 were given formal short-term goals known as personal improvement plans, or PIPs. Historically many managers were lenient, especially toward those with 3s whose ratings had dropped because of forces beyond their control, such as a weakness in the overall economy, ex-employees said.

But within the past couple of years, IBM appears to have decided the time for leniency was over. For example, a software group planning document for 2015 said that, over and above layoffs, the unit should seek to fire about 3,000 of the unit's 50,000-plus workers.

To make such deep cuts, the document said, executives should strike an "aggressive performance management posture." They needed to double the share of employees given low 3 and 4 ratings to at least 6.6 percent of the division's workforce. And because layoffs cost the company more than outright dismissals or resignations, the document said, executives should make sure that more than 80 percent of those with low ratings get fired or forced to quit.

Finally, the 2015 document said the division should work "to attract the best and brightest early professionals" to replace up to two-thirds of those sent packing. A more recent planning document -- the presentation to top executives Gherson and Kavanaugh for a business unit carved out of the software group -- recommended using similar techniques to free up money by cutting current employees to fund an "influx" of young workers.

In a recent interview, Poggi said he was resigned to being laid off. "Everybody at IBM has a bullet with their name on it," he said. Alpern wasn't nearly as accepting of being threatened with a poor job rating and then fired.

Alpern had a particular reason for wanting to stay on at IBM, at least until the end of last year. His younger son, Justin, then a high school senior, had been named a National Merit semifinalist. Alpern wanted him to be able to apply for one of the company's Watson scholarships. But IBM had recently narrowed eligibility so only the children of current employees could apply, not also retirees as it was until 2014.

Alpern had to make it through December for his son to be eligible.

But in August, he said, his manager ordered him to retire. He sought to buy time by appealing to superiors. But he said the manager's response was to threaten him with a bad job review that, he was told, would land him on a PIP, where his work would be scrutinized weekly. If he failed to hit his targets -- and his managers would be the judges of that -- he'd be fired and lose his benefits.

Alpern couldn't risk it; he retired on Oct. 31. His son, now a freshman on the dean's list at Texas A&M University, didn't get to apply.

"I can think of only a couple regrets or disappointments over my 39 years at IBM,"" he said, "and that's one of them."

'Congratulations on Your Retirement!'

Like any company in the U.S., IBM faces few legal constraints to reducing the size of its workforce. And with its no-disclosure strategy, it eliminated one of the last regular sources of information about its employment practices and the changing size of its American workforce.

But there remained the question of whether recent cutbacks were big enough to trigger state and federal requirements for disclosure of layoffs. And internal documents, such as a slide in a 2016 presentation titled "Transforming to Next Generation Digital Talent," suggest executives worried that "winning the talent war" for new young workers required IBM to improve the "attractiveness of (its) culture and work environment," a tall order in the face of layoffs and firings.

So the company apparently has sought to put a softer face on its cutbacks by recasting many as voluntary rather than the result of decisions by the firm. One way it has done this is by converting many layoffs to retirements.

Some ex-employees told ProPublica that, faced with a layoff notice, they were just as happy to retire. Others said they felt forced to accept a retirement package and leave. Several actively objected to the company treating their ouster as a retirement. The company nevertheless processed their exits as such.

Project manager Ed Alpern's departure was treated in company paperwork as a voluntary retirement. He didn't see it that way, because the alternative he said he was offered was being fired outright.

Lorilynn King, a 55-year-old IT specialist who worked from her home in Loveland, Colorado, had been with IBM almost as long as Alpern by May 2016 when her manager called to tell her the company was conducting a layoff and her name was on the list.

King said the manager told her to report to a meeting in Building 1 on IBM's Boulder campus the following day. There, she said, she found herself in a group of other older employees being told by an IBM human resources representative that they'd all be retiring. "I have NO intention of retiring," she remembers responding. "I'm being laid off."

ProPublica has collected documents from 15 ex-IBM employees who got layoff notices followed by a retirement package and has talked with many others who said they received similar paperwork. Critics say the sequence doesn't square well with the law.

"This country has banned mandatory retirement," said Seiner, the University of South Carolina law professor and former EEOC appellate lawyer. "The law says taking a retirement package has to be voluntary. If you tell somebody 'Retire or we'll lay you off or fire you,' that's not voluntary."

Until recently, the company's retirement paperwork included a letter from Rometty, the CEO, that read, in part, "I wanted to take this opportunity to wish you well on your retirement While you may be retiring to embark on the next phase of your personal journey, you will always remain a valued and appreciated member of the IBM family." Ex-employees said IBM stopped sending the letter last year.

IBM has also embraced another practice that leads workers, especially older ones, to quit on what appears to be a voluntary basis. It substantially reversed its pioneering support for telecommuting, telling people who've been working from home for years to begin reporting to certain, often distant, offices. Their other choice: Resign.

David Harlan had worked as an IBM marketing strategist from his home in Moscow, Idaho, for 15 years when a manager told him last year of orders to reduce the performance ratings of everybody at his pay grade. Then in February last year, when he was 50, came an internal video from IBM's new senior vice president, Michelle Peluso, which announced plans to improve the work of marketing employees by ordering them to work "shoulder to shoulder." Those who wanted to stay on would need to "co-locate" to offices in one of six cities.

Early last year, Harlan received an email congratulating him on "the opportunity to join your team in Raleigh, North Carolina." He had 30 days to decide on the 2,600-mile move. He resigned in June.

David Harlan worked for IBM for 15 years from his home in Moscow, Idaho, where he also runs a drama company. Early last year, IBM offered him a choice: Move 2,600 miles to Raleigh-Durham to begin working at an office, or resign. He left in June. (Rajah Bose for ProPublica)

After the Peluso video was leaked to the press, an IBM spokeswoman told the Wall Street Journal that the " vast majority " of people ordered to change locations and begin reporting to offices did so. IBM Vice President Ed Barbini said in an initial email exchange with ProPublica in July that the new policy affected only about 2,000 U.S. employees and that "most" of those had agreed to move.

But employees across a wide range of company operations, from the systems and technology group to analytics, told ProPublica they've also been ordered to co-locate in recent years. Many IBMers with long service said that they quit rather than sell their homes, pull children from school and desert aging parents. IBM declined to say how many older employees were swept up in the co-location initiative.

"They basically knew older employees weren't going to do it," said Eileen Maroney, a 63-year-old IBM product manager from Aiken, South Carolina, who, like Harlan, was ordered to move to Raleigh or resign. "Older people aren't going to move. It just doesn't make any sense." Like Harlan, Maroney left IBM last June.

Having people quit rather than being laid off may help IBM avoid disclosing how much it is shrinking its U.S. workforce and where the reductions are occurring.

Under the federal WARN Act , adopted in the wake of huge job cuts and factory shutdowns during the 1980s, companies laying off 50 or more employees who constitute at least one-third of an employer's workforce at a site have to give advance notice of layoffs to the workers, public agencies and local elected officials.

Similar laws in some states where IBM has a substantial presence are even stricter. California, for example, requires advanced notice for layoffs of 50 or more employees, no matter what the share of the workforce. New York requires notice for 25 employees who make up a third.

Because the laws were drafted to deal with abrupt job cuts at individual plants, they can miss reductions that occur over long periods among a workforce like IBM's that was, at least until recently, widely dispersed because of the company's work-from-home policy.

IBM's training sessions to prepare managers for layoffs suggest the company was aware of WARN thresholds, especially in states with strict notification laws such as California. A 2016 document entitled "Employee Separation Processing" and labeled "IBM Confidential" cautions managers about the "unique steps that must be taken when processing separations for California employees."

A ProPublica review of five years of WARN disclosures for a dozen states where the company had large facilities that shed workers found no disclosures in nine. In the other three, the company alerted authorities of just under 1,000 job cuts -- 380 in California, 369 in New York and 200 in Minnesota. IBM's reported figures are well below the actual number of jobs the company eliminated in these states, where in recent years it has shuttered, sold off or leveled plants that once employed vast numbers.

By contrast, other employers in the same 12 states reported layoffs last year alone totaling 215,000 people. They ranged from giant Walmart to Ostrom's Mushroom Farms in Washington state.

Whether IBM operated within the rules of the WARN act, which are notoriously fungible, could not be determined because the company declined to provide ProPublica with details on its layoffs.

A Second Act, But Poorer

W ith 35 years at IBM under his belt, Ed Miyoshi had plenty of experience being pushed to take buyouts, or early retirement packages, and refusing them. But he hadn't expected to be pushed last fall.

Miyoshi, of Hopewell Junction, New York, had some years earlier launched a pilot program to improve IBM's technical troubleshooting. With the blessing of an IBM vice president, he was busily interviewing applicants in India and Brazil to staff teams to roll the program out to clients worldwide.

The interviews may have been why IBM mistakenly assumed Miyoshi was a manager, and so emailed him to eliminate the one U.S.-based employee still left in his group.

"That was me," Miyoshi realized.

In his sign-off email to colleagues shortly before Christmas 2016, Miyoshi, then 57, wrote: "I am too young and too poor to stop working yet, so while this is good-bye to my IBM career, I fully expect to cross paths with some of you very near in the future."

He did, and perhaps sooner than his colleagues had expected; he started as a subcontractor to IBM about two weeks later, on Jan. 3.

Miyoshi is an example of older workers who've lost their regular IBM jobs and been brought back as contractors. Some of them -- not Miyoshi -- became contract workers after IBM told them their skills were out of date and no longer needed.

Employment law experts said that hiring ex-employees as contractors can be legally dicey. It raises the possibility that the layoff of the employee was not for the stated reason but perhaps because they were targeted for their age, race or gender.

IBM appears to recognize the problem. Ex-employees say the company has repeatedly told managers -- most recently earlier this year -- not to contract with former employees or sign on with third-party contracting firms staffed by ex-IBMers. But ProPublica turned up dozens of instances where the company did just that.

Only two weeks after IBM laid him off in December 2016, Ed Miyoshi of Hopewell Junction, New York, started work as a subcontractor to the company. But he took a $20,000-a-year pay cut. "I'm not a millionaire, so that's a lot of money to me," he says. (Demetrius Freeman for ProPublica)

Responding to a question in a confidential questionnaire from ProPublica, one 35-year company veteran from New York said he knew exactly what happened to the job he left behind when he was laid off. "I'M STILL DOING IT. I got a new gig eight days after departure, working for a third-party company under contract to IBM doing the exact same thing."

In many cases, of course, ex-employees are happy to have another job, even if it is connected with the company that laid them off.

Henry, the Columbus-based sales and technical specialist who'd been with IBM's "resiliency services" unit, discovered that he'd lost his regular IBM job because the company had purchased an Indian firm that provided the same services. But after a year out of work, he wasn't going to turn down the offer of a temporary position as a subcontractor for IBM, relocating data centers. It got money flowing back into his household and got him back where he liked to be, on the road traveling for business.

The compensation most ex-IBM employees make as contractors isn't comparable. While Henry said he collected the same dollar amount, it didn't include health insurance, which cost him $1,325 a month. Miyoshi said his paycheck is 20 percent less than what he made as an IBM regular.

"I took an over $20,000 hit by becoming a contractor. I'm not a millionaire, so that's a lot of money to me," Miyoshi said.

And lower pay isn't the only problem ex-IBM employees-now-subcontractors face. This year, Miyoshi's payable hours have been cut by an extra 10 "furlough days." Internal documents show that IBM repeatedly furloughs subcontractors without pay, often for two, three or more weeks a quarter. In some instances, the furloughs occur with little advance notice and at financially difficult moments. In one document, for example, it appears IBM managers, trying to cope with a cost overrun spotted in mid-November, planned to dump dozens of subcontractors through the end of the year, the middle of the holiday season.

Former IBM employees now on contract said the company controls costs by notifying contractors in the midst of projects they have to take pay cuts or lose the work. Miyoshi said that he originally started working for his third-party contracting firm for 10 percent less than at IBM, but ended up with an additional 10 percent cut in the middle of 2017, when IBM notified the contractor it was slashing what it would pay.

For many ex-employees, there are few ways out. Henry, for example, sought to improve his chances of landing a new full-time job by seeking assistance to finish a college degree through a federal program designed to retrain workers hurt by offshoring of jobs.

But when he contacted the Ohio state agency that administers the Trade Adjustment Assistance, or TAA, program, which provides assistance to workers who lose their jobs for trade-related reasons, he was told IBM hadn't submitted necessary paperwork. State officials said Henry could apply if he could find other IBM employees who were laid off with him, information that the company doesn't provide.

TAA is overseen by the Labor Department but is operated by states under individual agreements with Washington, so the rules can vary from state to state. But generally employers, unions, state agencies and groups of employers can petition for training help and cash assistance. Labor Department data compiled by the advocacy group Global Trade Watch shows that employers apply in about 40 percent of cases. Some groups of IBM workers have obtained retraining funds when they or their state have applied, but records dating back to the early 1990s show IBM itself has applied for and won taxpayer assistance only once, in 2008, for three Chicago-area workers whose jobs were being moved to India.

Teasing New Jobs

A s IBM eliminated thousands of jobs in 2016, David Carroll, a 52-year-old Austin software engineer, thought he was safe.

His job was in mobile development, the "M" in the company's CAMS strategy. And if that didn't protect him, he figured he was only four months shy of qualifying for a program that gives employees who leave within a year of their three-decade mark access to retiree medical coverage and other benefits.

But the layoff notice Carroll received March 2 gave him three months -- not four -- to come up with another job. Having been a manager, he said he knew the gantlet he'd have to run to land a new position inside IBM.

Still, he went at it hard, applying for more than 50 IBM jobs, including one for a job he'd successfully done only a few years earlier. For his effort, he got one offer -- the week after he'd been forced to depart. He got severance pay but lost access to what would have been more generous benefits.

Edward Kishkill, then 60, of Hillsdale, New Jersey, had made a similar calculation.

A senior systems engineer, Kishkill recognized the danger of layoffs, but assumed he was immune because he was working in systems security, the "S" in CAMS and another hot area at the company.

The precaution did him no more good than it had Carroll. Kishkill received a layoff notice the same day, along with 17 of the 22 people on his systems security team, including Diane Moos. The notice said that Kishkill could look for other jobs internally. But if he hadn't landed anything by the end of May, he was out.

With a daughter who was a senior in high school headed to Boston University, he scrambled to apply, but came up dry. His last day was May 31, 2016.

For many, the fruitless search for jobs within IBM is the last straw, a final break with the values the company still says it embraces. Combined with the company's increasingly frequent request that departing employees train their overseas replacements, it has left many people bitter. Scores of ex-employees interviewed by ProPublica said that managers with job openings told them they weren't allowed to hire from layoff lists without getting prior, high-level clearance, something that's almost never given.

ProPublica reviewed documents that show that a substantial share of recent IBM layoffs have involved what the company calls "lift and shift," lifting the work of specific U.S. employees and shifting it to specific workers in countries such as India and Brazil. For example, a document summarizing U.S. employment in part of the company's global technology services division for 2015 lists nearly a thousand people as layoff candidates, with the jobs of almost half coded for lift and shift.

Ex-employees interviewed by ProPublica said the lift-and-shift process required their extensive involvement. For example, shortly after being notified she'd be laid off, Kishkill's colleague, Moos, was told to help prepare a "knowledge transfer" document and begin a round of conference calls and email exchanges with two Indian IBM employees who'd be taking over her work. Moos said the interactions consumed much of her last three months at IBM.

Next Chapters

W hile IBM has managed to keep the scale and nature of its recent U.S. employment cuts largely under the public's radar, the company drew some unwanted attention during the 2016 presidential campaign, when then-candidate Donald Trump lambasted it for eliminating 500 jobs in Minnesota, where the company has had a presence for a half century, and shifting the work abroad.

The company also has caught flak -- in places like Buffalo, New York ; Dubuque, Iowa ; Columbia, Missouri , and Baton Rouge, Louisiana -- for promising jobs in return for state and local incentives, then failing to deliver. In all, according to public officials in those and other places, IBM promised to bring on 3,400 workers in exchange for as much as $250 million in taxpayer financing but has hired only about half as many.

After Trump's victory, Rometty, in a move at least partly aimed at courting the president-elect, pledged to hire 25,000 new U.S. employees by 2020. Spokesmen said the hiring would increase IBM's U.S. employment total, although, given its continuing job cuts, the addition is unlikely to approach the promised hiring total.

When The New York Times ran a story last fall saying IBM now has more employees in India than the U.S., Barbini, the corporate spokesman, rushed to declare, "The U.S. has always been and remains IBM's center of gravity." But his stream of accompanying tweets and graphics focused as much on the company's record for racking up patents as hiring people.

IBM has long been aware of the damage its job cuts can do to people. In a series of internal training documents to prepare managers for layoffs in recent years, the company has included this warning: "Loss of a job often triggers a grief reaction similar to what occurs after a death."

Most, though not all, of the ex-IBM employees with whom ProPublica spoke have weathered the loss and re-invented themselves.

Marjorie Madfis, the digital marketing strategist, couldn't land another tech job after her 2013 layoff, so she headed in a different direction. She started a nonprofit called Yes She Can Inc. that provides job skills development for young autistic women, including her 21-year-old daughter.

After almost two years of looking and desperate for useful work, Brian Paulson, the widely traveled IBM senior manager, applied for and landed a position as a part-time rural letter carrier in Plano, Texas. He now works as a contract project manager for a Las Vegas gaming and lottery firm.

Ed Alpern, who started at IBM as a Selectric typewriter repairman, watched his son go on to become a National Merit Scholar at Texas A&M University, but not a Watson scholarship recipient.

Lori King, the IT specialist and 33-year IBM veteran who's now 56, got in a parting shot. She added an addendum to the retirement papers the firm gave her that read in part: "It was never my plan to retire earlier than at least age 60 and I am not committing to retire. I have been informed that I am impacted by a resource action effective on 2016-08-22, which is my last day at IBM, but I am NOT retiring."

King has aced more than a year of government-funded coding boot camps and university computer courses, but has yet to land a new job.

David Harlan still lives in Moscow, Idaho, after refusing IBM's "invitation" to move to North Carolina, and is artistic director of the Moscow Art Theatre (Too).

Ed Miyoshi is still a technical troubleshooter working as a subcontractor for IBM.

Ed Kishkill, the senior systems engineer, works part time at a local tech startup, but pays his bills as an associate at a suburban New Jersey Staples store.

This year, Paul Henry was back on the road, working as an IBM subcontractor in Detroit, about 200 miles from where he lived in Columbus. On Jan. 8, he put in a 14-hour day and said he planned to call home before turning in. He died in his sleep.

Correction, March 24, 2018: Eileen Maroney lives in Aiken, South Carolina. The name of her city was incorrect in the original version of this story.

Do you have information about age discrimination at IBM?

Let us know.

Peter Gosselin joined ProPublica as a contributing reporter in January 2017 to cover aging. He has covered the U.S. and global economies for, among others, the Los Angeles Times and The Boston Globe, focusing on the lived experiences of working people. He is the author of "High Wire: The Precarious Financial Lives of American Families."

Ariana Tobin is an engagement reporter at ProPublica, where she works to cultivate communities to inform our coverage. She was previously at The Guardian and WNYC. Ariana has also worked as digital producer for APM's Marketplace and contributed to outlets including The New Republic , On Being , the St. Louis Beacon and Bustle .

Production by Joanna Brenner and Hannah Birch . Art direction by David Sleight . Illustrations by Richard Borge .

[Oct 30, 2018] Cutting 'Old Heads' at IBM

Notable quotes:
"... I took an early retirement package when IBM first started downsizing. I had 30 years with them, but I could see the writing on the wall so I got out. I landed an exec job with a biotech company some years later and inherited an IBM consulting team that were already engaged. I reviewed their work for 2 months then had the pleasure of terminating the contract and actually escorting the team off the premises because the work product was so awful. ..."
"... Every former or prospective IBM employee is a potential future IBM customer or partner. How you treat them matters! ..."
"... I advise IBM customers now. My biggest professional achievements can be measured in how much revenue IBM lost by my involvement - millions. Favorite is when IBM paid customer to stop the bleeding. ..."
Oct 30, 2018 | features.propublica.org

I took an early retirement package when IBM first started downsizing. I had 30 years with them, but I could see the writing on the wall so I got out. I landed an exec job with a biotech company some years later and inherited an IBM consulting team that were already engaged. I reviewed their work for 2 months then had the pleasure of terminating the contract and actually escorting the team off the premises because the work product was so awful.

They actually did a presentation of their interim results - but it was a 52 slide package that they had presented to me in my previous job but with the names and numbers changed. see more

DarthVaderMentor dauwkus , Thursday, April 5, 2018 4:43 PM

Intellectual Capital Re-Use! LOL! Not many people realize in IBM that many, if not all of the original IBM Consulting Group materials were made under the Type 2 Materials clause of the IBM Contract, which means the customers actually owned the IP rights of the documents. Can you imagine the mess if just one customer demands to get paid for every re-use of the IP that was developed for them and then re-used over and over again?
NoGattaca dauwkus , Monday, May 7, 2018 5:37 PM
Beautiful! Yea, these companies so fast to push experienced people who have dedicated their lives to the firm - how can you not...all the hours and commitment it takes - way underestimate the power of the network of those left for dead and their influence in that next career gig. Memories are long...very long when it comes to experiences like this.
davosil North_40 , Sunday, March 25, 2018 5:19 PM
True dat! Every former or prospective IBM employee is a potential future IBM customer or partner. How you treat them matters!
Playing Defense North_40 , Tuesday, April 3, 2018 4:41 PM
I advise IBM customers now. My biggest professional achievements can be measured in how much revenue IBM lost by my involvement - millions. Favorite is when IBM paid customer to stop the bleeding.

[Oct 30, 2018] It s all about making the numbers so the management can present a Potemkin Village of profits and ever-increasing growth sufficient to get bonuses. There is no relation to any sort of quality or technological advancement, just HR 3-card monte

Notable quotes:
"... It's no coincidence whatsoever that Diane Gherson, mentioned prominently in the article, blasted out an all-employees email crowing about IBM being a great place to work according to (ahem) LinkedIn. I desperately want to post a link to this piece in the corporate Slack, but that would get me fired immediately instead of in a few months at the next "resource action." It's been a whole 11 months since our division had one, so I know one is coming soon. ..."
"... I used to say when I was there that: "After every defeat, they pin medals on the generals and shoot the soldiers". ..."
"... 1990 is also when H-1B visa rules were changed so that companies no longer had to even attempt to hire an American worker as long as the job paid $60,000, which hasn't changed since. This article doesn't even mention how our work visa system facilitated and even rewarded this abuse of Americans. ..."
"... Well, starting in the 1980s, the American management was allowed by Reagan to get rid of its workforce. ..."
"... It's all about making the numbers so the management can present a Potemkin Village of profits and ever-increasing growth sufficient to get bonuses. There is no relation to any sort of quality or technological advancement, just HR 3-card monte. They have installed air bearing in Old Man Watson's coffin as it has been spinning ever faster ..."
"... Corporate America executive management is all about stock price management. Their bonus's in the millions of dollars are based on stock performance. With IBM's poor revenue performance since Ginny took over, profits can only be maintained by cost reduction. Look at the IBM executive's bonus's throughout the last 20 years and you can see that all resource actions have been driven by Palmisano's and Rominetty's greed for extravagant bonus's. ..."
"... Also worth noting is that IBM drastically cut the cap on it's severance pay calculation. Almost enough to make me regret not having retired before that changed. ..."
"... Yeah, severance started out at 2 yrs pay, went to 1 yr, then to 6 mos. and is now 1 month. ..."
"... You need to investigate AT&T as well, as they did the same thing. I was 'sold' by IBM to AT&T as part of he Network Services operation. AT&T got rid of 4000 of the 8000 US employees sent to AT&T within 3 years. Nearly everyone of us was a 'senior' employee. ..."
Oct 30, 2018 | disqus.com

dragonflap• 7 months ago I'm a 49-year-old SW engineer who started at IBM as part of an acquisition in 2000. I got laid off in 2002 when IBM started sending reqs to Bangalore in batches of thousands. After various adventures, I rejoined IBM in 2015 as part of the "C" organization referenced in the article.

It's no coincidence whatsoever that Diane Gherson, mentioned prominently in the article, blasted out an all-employees email crowing about IBM being a great place to work according to (ahem) LinkedIn. I desperately want to post a link to this piece in the corporate Slack, but that would get me fired immediately instead of in a few months at the next "resource action." It's been a whole 11 months since our division had one, so I know one is coming soon.

Stewart Dean • 7 months ago ,

The lead-in to this piece makes it sound like IBM was forced into these practices by inescapable forces. I'd say not, rather that it pursued them because a) the management was clueless about how to lead IBM in the new environment and new challenges so b) it started to play with numbers to keep the (apparent) profits up....to keep the bonuses coming. I used to say when I was there that: "After every defeat, they pin medals on the generals and shoot the soldiers".

And then there's the Pig with the Wooden Leg shaggy dog story that ends with the punch line, "A pig like that you don't eat all at once", which has a lot of the flavor of how many of us saw our jobs as IBM die a slow death.

IBM is about to fall out of the sky, much as General Motors did. How could that happen? By endlessly beating the cow to get more milk.

IBM was hiring right through the Great Depression such that It Did Not Pay Unemployment Insurance. Because it never laid people off, Because until about 1990, your manager was responsible for making sure you had everything you needed to excel and grow....and you would find people that had started on the loading dock and had become Senior Programmers. But then about 1990, IBM starting paying unemployment insurance....just out of the goodness of its heart. Right.

CRAW Stewart Dean • 7 months ago ,

1990 is also when H-1B visa rules were changed so that companies no longer had to even attempt to hire an American worker as long as the job paid $60,000, which hasn't changed since. This article doesn't even mention how our work visa system facilitated and even rewarded this abuse of Americans.

DDRLSGC Stewart Dean • 7 months ago ,

Well, starting in the 1980s, the American management was allowed by Reagan to get rid of its workforce.

Georgann Putintsev Stewart Dean • 7 months ago ,

I found that other Ex-IBMer's respect other Ex-IBMer's work ethics, knowledge and initiative.

Other companies are happy to get them as a valueable resource. In '89 when our Palo Alto Datacenter moved, we were given two options: 1.) to become a Programmer (w/training) 2.) move to Boulder or 3.) to leave.

I got my training with programming experience and left IBM in '92, when for 4 yrs IBM offerred really good incentives for leaving the company. The Executives thought that the IBM Mainframe/MVS z/OS+ was on the way out and the Laptop (Small but Increasing Capacity) Computer would take over everything.

It didn't. It did allow many skilled IBMers to succeed outside of IBM and help built up our customer skill sets. And like many, when the opportunity arose to return I did. In '91 I was accidentally given a male co-workers paycheck and that was one of the reasons for leaving. During my various Contract work outside, I bumped into other male IBMer's that had left too, some I had trained, and when they disclosed that it was their salary (which was 20-40%) higher than mine was the reason they left, I knew I had made the right decision.

Women tend to under-value themselves and their capabilities. Contracting also taught me that companies that had 70% employees and 30% contractors, meant that contractors would be let go if they exceeded their quarterly expenditures.

I first contracted with IBM in '98 and when I decided to re-join IBM '01, I had (3) job offers and I took the most lucrative exciting one to focus on fixing & improving DB2z Qry Parallelism. I developed a targeted L3 Technical Change Team to help L2 Support reduce Customer problems reported and improve our product. The instability within IBM remained and I saw IBM try to eliminate aging, salaried, benefited employees. The 1.) find a job within IBM ... to 2.) to leave ... was now standard.

While my salary had more than doubled since I left IBM the first time, it still wasn't near other male counterparts. The continual rating competition based on salary ranged titles and timing a title raise after a round of layoffs, not before. I had another advantage going and that was that my changed reduced retirement benefits helped me stay there. It all comes down to the numbers that Mgmt is told to cut & save IBM. While much of this article implies others were hired, at our Silicon Valley Location and other locations, they had no intent to backfill. So the already burdened employees were laden with more workloads & stress.

In the early to mid 2000's IBM setup a counter lab in China where they were paying 1/4th U.S. salaries and many SVL IBMers went to CSDL to train our new world 24x7 support employees. But many were not IBM loyal and their attrition rates were very high, so it fell to a wave of new-hires at SVL to help address it.

Stewart Dean Georgann Putintsev • 7 months ago ,

It's all about making the numbers so the management can present a Potemkin Village of profits and ever-increasing growth sufficient to get bonuses. There is no relation to any sort of quality or technological advancement, just HR 3-card monte. They have installed air bearing in Old Man Watson's coffin as it has been spinning ever faster

IBM32_retiree • 7 months ago ,

Corporate America executive management is all about stock price management. Their bonus's in the millions of dollars are based on stock performance. With IBM's poor revenue performance since Ginny took over, profits can only be maintained by cost reduction. Look at the IBM executive's bonus's throughout the last 20 years and you can see that all resource actions have been driven by Palmisano's and Rominetty's greed for extravagant bonus's.

Dan Yurman • 7 months ago ,

Bravo ProPublica for another "sock it to them" article - journalism in honor of the spirit of great newspapers everywhere that the refuge of justice in hard times is with the press.

Felix Domestica • 7 months ago ,

Also worth noting is that IBM drastically cut the cap on it's severance pay calculation. Almost enough to make me regret not having retired before that changed.

RonF Felix Domestica • 7 months ago ,

Yeah, severance started out at 2 yrs pay, went to 1 yr, then to 6 mos. and is now 1 month.

mjmadfis RonF • 7 months ago ,

When I was let go in June 2013 it was 6 months severance.

Terry Taylor • 7 months ago ,

You need to investigate AT&T as well, as they did the same thing. I was 'sold' by IBM to AT&T as part of he Network Services operation. AT&T got rid of 4000 of the 8000 US employees sent to AT&T within 3 years. Nearly everyone of us was a 'senior' employee.

weelittlepeople Terry Taylor • 7 months ago ,

Good Ol Ma Bell is following the IBM playbook to a Tee

emnyc • 7 months ago ,

ProPublica deserves a Pulitzer for this article and all the extensive research that went into this investigation.

Incredible job! Congrats.

On a separate note, IBM should be ashamed of themselves and the executive team that enabled all of this should be fired.

WmBlake • 7 months ago ,

As a permanent old contractor and free-enterprise defender myself, I don't blame IBM a bit for wanting to cut the fat. But for the outright *lies, deception and fraud* that they use to break laws, weasel out of obligations... really just makes me want to shoot them... and I never even worked for them.

Michael Woiwood • 7 months ago ,

Great Article.

Where I worked, In Rochester,MN, people have known what is happening for years. My last years with IBM were the most depressing time in my life.

I hear a rumor that IBM would love to close plants they no longer use but they are so environmentally polluted that it is cheaper to maintain than to clean up and sell.

scorcher14 • 7 months ago ,

One of the biggest driving factors in age discrimination is health insurance costs, not salary. It can cost 4-5x as much to insure and older employee vs. a younger one, and employers know this. THE #1 THING WE CAN DO TO STOP AGE DISCRIMINATION IS TO MOVE AWAY FROM OUR EMPLOYER-PROVIDED INSURANCE SYSTEM. It could be single-payer, but it could also be a robust individual market with enough pool diversification to make it viable. Freeing employers from this cost burden would allow them to pick the right talent regardless of age.

DDRLSGC scorcher14 • 7 months ago ,

The American business have constantly fought against single payer since the end of World War II and why should I feel sorry for them when all of a sudden, they are complaining about health care costs? It is outrageous that workers have to face age discrimination; however, the CEOs don't have to deal with that issue since they belong to a tiny group of people who can land a job anywhere else.

pieinthesky scorcher14 • 7 months ago ,

Single payer won't help. We have single payer in Canada and just as much age discrimination in employment. Society in general does not like older people so unless you're a doctor, judge or pharmacist you will face age bias. It's even worse in popular culture never mind in employment.

OrangeGina scorcher14 • 7 months ago ,

I agree. Yet, a determined company will find other methods, explanations and excuses.

JohnCordCutter • 7 months ago ,

Thanks for the great article. I left IBM last year. USA based. 49. Product Manager in one of IBMs strategic initiatives, however got told to relocate or leave. I found another job and left. I came to IBM from an acquisition. My only regret is, I wish I had left this toxic environment earlier. It truely is a dreadful place to work.

60 Soon • 7 months ago ,

The methodology has trickled down to smaller companies pursuing the same net results for headcount reduction. The similarities to my experience were painful to read. The grief I felt after my job was "eliminated" 10 years ago while the Recession was at its worst and shortly after my 50th birthday was coming back. I never have recovered financially but have started writing a murder mystery. The first victim? The CEO who let me go. It's true. Revenge is best served cold.

donttreadonme9 • 7 months ago ,

Well written . people like me have experienced exactly what you wrote. IBM is a shadow of it's former greatness and I have advised my children to stay away from IBM and companies like it as they start their careers. IBM is a corrupt company. Shame on them !

annapurna • 7 months ago ,

I hope they find some way to bring a class action lawsuit against these assholes.

Mark annapurna • 7 months ago ,

I suspect someone will end up hunt them down with an axe at some point. That's the only way they'll probably learn. I don't know about IBM specifically, but when Carly Fiorina ran HP, she travelled with and even went into engineering labs with an armed security detail.

OrangeGina Mark • 7 months ago ,

all the bigwig CEOs have these black SUV security details now.

Sarahw • 7 months ago ,

IBM has been using these tactics at least since the 1980s, when my father was let go for similar 'reasons.'

Vin • 7 months ago ,

Was let go after 34 years of service. Mine Resource Action latter had additional lines after '...unless you are offered ... position within IBM before that date.' , implying don't even try to look for a position. They lines were ' Additional business controls are in effect to manage the business objectives of this resource action, therefore, job offers within (the name of division) will be highly unlikely.'.

Mark Vin • 7 months ago ,

Absolutely and utterly disgusting.

Greybeard • 7 months ago ,

I've worked for a series of vendors for over thirty years. A job at IBM used to be the brass ring; nowadays, not so much.

I've heard persistent rumors from IBMers that U.S. headcount is below 25,000 nowadays. Given events like the recent downtime of the internal systems used to order parts (5 or so days--website down because staff who maintained it were let go without replacements), it's hard not to see the spiral continue down the drain.

What I can't figure out is whether Rometty and cronies know what they're doing or are just clueless. Either way, the result is the same: destruction of a once-great company and brand. Tragic.

ManOnTheHill Greybeard • 7 months ago ,

Well, none of these layoffs/ageist RIFs affect the execs, so they don't see the effects, or they see the effects but attribute them to some other cause.

(I'm surprised the article doesn't address this part of the story; how many affected by layoffs are exec/senior management? My bet is very few.)

ExIBMExec ManOnTheHill • 7 months ago ,

I was a D-banded exec (Director-level) who was impacted and I know even some VPs who were affected as well, so they do spread the pain, even in the exec ranks.

ManOnTheHill ExIBMExec • 7 months ago ,

That's different than I have seen in companies I have worked for (like HP). There RIFs (Reduction In Force, their acronym for layoff) went to the director level and no further up.

[Oct 30, 2018] There are plenty of examples of people who were doing their jobs, IN SPADES, putting in tons of unpaid overtime, and generally doing whatever was humanly possible to make sure that whatever was promised to the customer was delivered within their span of control. As they grew older corporations threw them out like an empty can

Notable quotes:
"... The other alternative is a market-based life that, for many, will be cruel, brutish, and short. ..."
Oct 30, 2018 | features.propublica.org

Lorilynn King

Step back and think about this for a minute. There are plenty of examples of people who were doing their jobs, IN SPADES, putting in tons of unpaid overtime, and generally doing whatever was humanly possible to make sure that whatever was promised to the customer was delivered (within their span of control... I'm not going to get into a discussion of how IBM pulls the rug out from underneath contracts after they've been signed).

These people were, and still are, high performers, they are committed to the job and the purpose that has been communicated to them by their peers, management, and customers; and they take the time (their OWN time) to pick up new skills and make sure that they are still current and marketable. They do this because they are committed to doing the job to the best of their ability.... it's what makes them who they are.

IBM (and other companies) are firing these very people ***for one reason and one reason ONLY***: their AGE. They have the skills and they're doing their jobs. If the same person was 30 you can bet that they'd still be there. Most of the time it has NOTHING to do with performance or lack of concurrency. Once the employee is fired, the job is done by someone else. The work is still there, but it's being done by someone younger and/or of a different nationality.

The money that is being saved by these companies has to come from somewhere. People that are having to withdraw their retirement savings 20 or so years earlier than planned are going to run out of funds.... and when they're in nursing homes, guess who is going to be supporting them? Social security will be long gone, their kids have their own monetary challenges.... so it will be government programs.... maybe.

This is not just a problem that impacts the 40 and over crowd. This is going to impact our entire society for generations to come.

NoPolitician
The business reality you speak of can be tempered via government actions. A few things:

The other alternative is a market-based life that, for many, will be cruel, brutish, and short.

[Oct 30, 2018] Elimination of loyalty: what corporations cloak as weeding out the low performers tranparantly reveals catching the older workers in the net as well.

Oct 30, 2018 | features.propublica.org

Great White North, Thursday, March 22, 2018 11:29 PM

There's not a word of truth quoted in this article. That is, quoted from IBM spokespeople. It's the culture there now. They don't even realize that most of their customers have become deaf to the same crap from their Sales and Marketing BS, which is even worse than their HR speak.

The sad truth is that IBM became incapable of taking its innovation (IBM is indeed a world beating, patent generating machine) to market a long time ago. It has also lost the ability (if it ever really had it) to acquire other companies and foster their innovation either - they ran most into the ground. As a result, for nearly a decade revenues have declined and resource actions grown. The resource actions may seem to be the ugly problem, but they're only the symptom of a fat greedy and pompous bureaucracy that's lost its ability to grow and stay relevant in a very competitive and changing industry. What they have been able to perfect and grow is their ability to downsize and return savings as dividends (Big Sam Palmisano's "innovation"). Oh, and for senior management to line their pockets.

Nothing IBM is currently doing is sustainable.

If you're still employed there, listen to the pain in the words of your fallen comrades and don't knock yourself out trying to stay afloat. Perhaps learn some BS of your own and milk your job (career? not...) until you find freedom and better pastures.

If you own stock, do like Warren Buffett, and sell it while it still has some value.

Danllo , Thursday, March 22, 2018 10:43 PM
This is NOTHING NEW! All major corporations have and will do this at some point in their existence. Another industry that does this regularly every 3 to 5 years is the pharamaceutical industry. They'll decimate their sales forces in order to, as they like to put it, "right size" the company.

They'll cloak it as weeding out the low performers, but they'll try to catch the "older" workers in the net as well.

[Oct 30, 2018] American companies pay health insurance premiums based on their specific employee profiles

Notable quotes:
"... As long as companies pay for their employees' health insurance they will have an incentive to fire older employees. ..."
"... The answer is to separate health insurance from employment. Companies can't be trusted. Not only health care, but retirement is also sorely abused by corporations. All the money should be in protected employee based accounts. ..."
Oct 30, 2018 | features.propublica.org

sometimestheyaresomewhatright , Thursday, March 22, 2018 4:13 PM

American companies pay health insurance premiums based on their specific employee profiles. Insurance companies compete with each other for the business, but costs are actual. And based on the profile of the pool of employees. So American companies fire older workers just to lower the average age of their employees. Statistically this is going to lower their health care costs.

As long as companies pay for their employees' health insurance they will have an incentive to fire older employees. They have an incentive to fire sick employees and employees with genetic risks. Those are harder to implement as ways to lower costs. Firing older employees is simple to do, just look up their ages.

The answer is to separate health insurance from employment. Companies can't be trusted. Not only health care, but retirement is also sorely abused by corporations. All the money should be in protected employee based accounts.

By the way, most tech companies are actually run by older people. The goal is to broom out mid-level people based on age. Nobody is going to suggest to a sixty year old president that they should self fire, for the good of the company.

[Oct 30, 2018] Cutting Old Heads at IBM by Peter Gosselin and Ariana Tobin

Mar 22, 2018 | features.propublica.org

This story was co-published with Mother Jones.

F or nearly a half century, IBM came as close as any company to bearing the torch for the American Dream.

As the world's dominant technology firm, payrolls at International Business Machines Corp. swelled to nearly a quarter-million U.S. white-collar workers in the 1980s. Its profits helped underwrite a broad agenda of racial equality, equal pay for women and an unbeatable offer of great wages and something close to lifetime employment, all in return for unswerving loyalty.

How the Crowd Led Us to Investigate IBM

Our project started with a digital community of ex-employees. Read more about how we got this story.

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But when high tech suddenly started shifting and companies went global, IBM faced the changing landscape with a distinction most of its fiercest competitors didn't have: a large number of experienced and aging U.S. employees.

The company reacted with a strategy that, in the words of one confidential planning document, would "correct seniority mix." It slashed IBM's U.S. workforce by as much as three-quarters from its 1980s peak, replacing a substantial share with younger, less-experienced and lower-paid workers and sending many positions overseas. ProPublica estimates that in the past five years alone, IBM has eliminated more than 20,000 American employees ages 40 and over, about 60 percent of its estimated total U.S. job cuts during those years.

In making these cuts, IBM has flouted or outflanked U.S. laws and regulations intended to protect later-career workers from age discrimination, according to a ProPublica review of internal company documents, legal filings and public records, as well as information provided via interviews and questionnaires filled out by more than 1,000 former IBM employees.

Among ProPublica's findings, IBM:

Denied older workers information the law says they need in order to decide whether they've been victims of age bias, and required them to sign away the right to go to court or join with others to seek redress. Targeted people for layoffs and firings with techniques that tilted against older workers, even when the company rated them high performers. In some instances, the money saved from the departures went toward hiring young replacements. Converted job cuts into retirements and took steps to boost resignations and firings. The moves reduced the number of employees counted as layoffs, where high numbers can trigger public disclosure requirements. Encouraged employees targeted for layoff to apply for other IBM positions, while quietly advising managers not to hire them and requiring many of the workers to train their replacements. Told some older employees being laid off that their skills were out of date, but then brought them back as contract workers, often for the same work at lower pay and fewer benefits.

IBM declined requests for the numbers or age breakdown of its job cuts. ProPublica provided the company with a 10-page summary of its findings and the evidence on which they were based. IBM spokesman Edward Barbini said that to respond the company needed to see copies of all documents cited in the story, a request ProPublica could not fulfill without breaking faith with its sources. Instead, ProPublica provided IBM with detailed descriptions of the paperwork. Barbini declined to address the documents or answer specific questions about the firm's policies and practices, and instead issued the following statement:

"We are proud of our company and our employees' ability to reinvent themselves era after era, while always complying with the law. Our ability to do this is why we are the only tech company that has not only survived but thrived for more than 100 years."

With nearly 400,000 people worldwide, and tens of thousands still in the U.S., IBM remains a corporate giant. How it handles the shift from its veteran baby-boom workforce to younger generations will likely influence what other employers do. And the way it treats its experienced workers will eventually affect younger IBM employees as they too age.

Fifty years ago, Congress made it illegal with the Age Discrimination in Employment Act , or ADEA, to treat older workers differently than younger ones with only a few exceptions, such as jobs that require special physical qualifications. And for years, judges and policymakers treated the law as essentially on a par with prohibitions against discrimination on the basis of race, gender, sexual orientation and other categories.

In recent decades, however, the courts have responded to corporate pleas for greater leeway to meet global competition and satisfy investor demands for rising profits by expanding the exceptions and shrinking the protections against age bias .

"Age discrimination is an open secret like sexual harassment was until recently," said Victoria Lipnic, the acting chair of the Equal Employment Opportunity Commission, or EEOC, the independent federal agency that administers the nation's workplace anti-discrimination laws.

"Everybody knows it's happening, but often these cases are difficult to prove" because courts have weakened the law, Lipnic said. "The fact remains it's an unfair and illegal way to treat people that can be economically devastating."

Many companies have sought to take advantage of the court rulings. But the story of IBM's downsizing provides an unusually detailed portrait of how a major American corporation systematically identified employees to coax or force out of work in their 40s, 50s and 60s, a time when many are still productive and need a paycheck, but face huge hurdles finding anything like comparable jobs.

The dislocation caused by IBM's cuts has been especially great because until recently the company encouraged its employees to think of themselves as "IBMers" and many operated under the assumption that they had career-long employment.

When the ax suddenly fell, IBM provided almost no information about why an employee was cut or who else was departing, leaving people to piece together what had happened through websites, listservs and Facebook groups such as "Watching IBM" or "Geographically Undesirable IBM Marketers," as well as informal support groups.

Marjorie Madfis, at the time 57, was a New York-based digital marketing strategist and 17-year IBM employee when she and six other members of her nine-person team -- all women in their 40s and 50s -- were laid off in July 2013. The two who remained were younger men.

Since her specialty was one that IBM had said it was expanding, she asked for a written explanation of why she was let go. The company declined to provide it.

"They got rid of a group of highly skilled, highly effective, highly respected women, including me, for a reason nobody knows," Madfis said in an interview. "The only explanation is our age."

Brian Paulson, also 57, a senior manager with 18 years at IBM, had been on the road for more than a year overseeing hundreds of workers across two continents as well as hitting his sales targets for new services, when he got a phone call in October 2015 telling him he was out. He said the caller, an executive who was not among his immediate managers, cited "performance" as the reason, but refused to explain what specific aspects of his work might have fallen short.

It took Paulson two years to land another job, even though he was equipped with an advanced degree, continuously employed at high-level technical jobs for more than three decades and ready to move anywhere from his Fairview, Texas, home.

"It's tough when you've worked your whole life," he said. "The company doesn't tell you anything. And once you get to a certain age, you don't hear a word from the places you apply."

Paul Henry, a 61-year-old IBM sales and technical specialist who loved being on the road, had just returned to his Columbus home from a business trip in August 2016 when he learned he'd been let go. When he asked why, he said an executive told him to "keep your mouth shut and go quietly."

Henry was jobless more than a year, ran through much of his savings to cover the mortgage and health insurance and applied for more than 150 jobs before he found a temporary slot.

"If you're over 55, forget about preparing for retirement," he said in an interview. "You have to prepare for losing your job and burning through every cent you've saved just to get to retirement."

IBM's latest actions aren't anything like what most ex-employees with whom ProPublica talked expected from their years of service, or what today's young workers think awaits them -- or are prepared to deal with -- later in their careers.

"In a fast-moving economy, employers are always going to be tempted to replace older workers with younger ones, more expensive workers with cheaper ones, those who've performed steadily with ones who seem to be up on the latest thing," said Joseph Seiner, an employment law professor at the University of South Carolina and former appellate attorney for the EEOC.

"But it's not good for society," he added. "We have rules to try to maintain some fairness in our lives, our age-discrimination laws among them. You can't just disregard them."

[Oct 30, 2018] How do you say "Red Hat" in Hindi??

Oct 30, 2018 | theregister.co.uk

christie23356 , 14 hrs

Re: How do you say "Red Hat" in Hindi??

Hello)

[Oct 30, 2018] IBM must be borrowing a lot of cash to fund the acquisition. At last count it had about $12B in the bank. Layoffs are emminent in such situation as elimnation of headcount is one of the way to justify the price paid

Oct 30, 2018 | theregister.co.uk

Anonymous Coward 1 day

Borrowing $ at low rates

IBM must be borrowing a lot of cash to fund the acquisition. At last count it had about $12B in the bank... https://www.marketwatch.com/investing/stock/ibm/financials/balance-sheet.

Unlike everyone else - https://www.thestreet.com/story/14513643/1/apple-microsoft-google-are-sitting-on-crazy-amounts-of-cash.html

Jove
Over-paid ...

Looking at the Red Hat numbers, I would not want to be an existing IBM share-holder this morning; both companies missing market expectations and in need of each other to get out of the rut.

It is going to take a lot of effort to make that 63% premium pay-off. If it does not pay-off pretty quickly, the existing RedHat leadership with gone in 18 months.

P.S.

Apparently this is going to be financed by a mixture of cash and debt - increasing IBM's existing debt by nearly 50%. Possible credit rating downgrade on the way?

steviebuk
Goodbye...

...Red Hat.

No doubt IBM will scare off all the decent employees that make it what it is.

SecretSonOfHG
RH employees will start to jump ship

As soon as they have a minimum of experience with the terrible IBM change management processes, the many layers of bureocracy and management involved and the zero or negative value they add to anything at all.

IBM is a shinking ship, the only question being how long it will take to happen. Anyone thinkin RH has any future other than languish and disappear under IBM management is dellusional. Or a IBM stock owner.

Jove
Product lines EoL ...

What get's the chop because it either does not fit in with the Hybrid-Cloud model, or does not generate sufficient margin?

cloth
But *Why* did they buy them?

I'm still trying to figure out "why" they bought Red hat.

The only thing my not insignificant google trawling can find me is that Red Hat sell to the likes of Microsoft and google - now, that *is* interesting. IBM seem to be saying that they can't compete directly but they will sell upwards to their overlords - no ?

Anonymous Coward

Re: But *Why* did they buy them?

As far as I can tell, it is be part of IBM's cloud (or hybrid cloud) strategy. RH have become/are becoming increasingly successful in this arena.

If I was being cynical, I would also say that it will enable IBM to put the RH brand and appropriate open source soundbites on the table for deal-making and sales with or without the RH workforce and philosophy. Also, RH's subscription-base must figure greatly here - a list of perfect customers ripe for "upselling". bazza

Re: But *Why* did they buy them?

I'm fairly convinced that it's because of who uses RedHat. Certainly a lot of financial institutions do, they're in the market for commercial support (the OS cost itself is irrelevant). You can tell this by looking at the prices RedHat were charging for RedHat MRG - beloved by the high speed share traders. To say eye-watering, PER ANNUM too, is an understatement. You'd have to have got deep pockets before such prices became ignorable.

IBM is a business services company that just happens to make hardware and write OSes. RedHat has a lot of customers interested in business services. The ones I think who will be kicking themselves are Hewlett Packard (or whatever they're called these days).

tfb
Re: But *Why* did they buy them?

Because AIX and RHEL are the two remaining enterprise unixoid platforms (Solaris & HPUX are moribund and the other players are pretty small). Now both of those are owned by IBM: they now own the enterprise unixoid market.

theblackhand
Re: But *Why* did they buy them?

"I'm still trying to figure out "why" they bought Red hat."

What they say? It somehow helps them with cloud. Doesn't sound like much money there - certainly not enough to justify the significant increase in debt (~US$17B).

What could it be then? Well RedHat pushed up support prices and their customers didn't squeal much. A lot of those big enterprise customers moved from expensive hardware/expensive OS support over the last ten years to x86 with much cheaper OS support so there's plenty of scope for squeezing more.

[Oct 29, 2018] If I (hypothetically) worked for a company acquired by Big Blue

Oct 29, 2018 | arstechnica.com

MagicDot / Ars Praetorian reply 6 hours ago

If I (hypothetically) worked for a company acquired by Big Blue, I would offer the following:

...but this is all hypothetical. \

Belisarius , Ars Tribunus Angusticlavius et Subscriptor 5 hours ago

sviola wrote:
show nested quotes
I can see what each company will get out of the deal and how they might potentially benefit. However, Red Hat's culture is integral to their success. Both company CEOs were asked today at an all-hands meeting about how they intend to keep the promise of remaining distinct and maintaining the RH culture without IBM suffocating it. Nothing is supposed to change (for now), but IBM has a track record of driving successful companies and open dynamic cultures into the ground. Many, many eyes will be watching this.

Hopefully IBM current top Brass will be smart and give some autonomy to Red Hat and leave it to its own management style. Of course, that will only happen if they deliver IBM goals (and that will probably mean high double digit y2y growth) on regular basis...

One thing is sure, they'll probably kill any overlapsing product in the medium term (who will survive between JBOSS and Websphere is an open bet).

(On a dream side note, maybe, just maybe they'll move some of their software development to Red Hat)

Good luck. Every CEO thinks they're the latest incarnation of Adam Smith, and they're all dying to be seen as "doing something." Doing nothing, while sometimes a really smart thing and oftentimes the right thing to do, isn't looked upon favorably these days in American business. IBM will definitely do something with Red Hat; it's just a matter of what.

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Last modified: November 13, 2018