The Trouble with IBM

A legendary American tech company faces new challenges, and new competition, in areas where it once dominated:

It would have been better to walk away. As the Government Accountability Office reviewed the award, documents showed the CIA’s opinion of IBM was tepid at best. The agency had “grave” concerns about the ability of IBM technology to scale up and down in response to usage spikes, and it rated the company’s technical demo as “marginal.” Overall, the CIA concluded, IBM was a high-risk choice. In a court filing, Amazon blasted the elder company as a “late entrant to the cloud computing market” with an “uncompetitive, materially deficient proposal.” A federal judge agreed, ruling in October that with the “overall inferiority of its proposal,” IBM “lacked any chance of winning” the contract. The corporate cliché of the 1970s and ’80s, that no one ever got fired for buying IBM, had never seemed less true. IBM withdrew its challenge.

Source: Businessweek
Published: May 23, 2014
Length: 13 minutes (3,251 words)
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