Iowa Spent $50M to Lure IBM. Then the Firings Started(bloomberg.com)
bloomberg.com
Iowa Spent $50M to Lure IBM. Then the Firings Started
http://www.bloomberg.com/news/articles/2015-05-19/iowa-spent-50-million-to-lure-ibm-then-the-firings-started
71 comments
> Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent.
Indeed -- and just one of the most painfully obvious illustrations of why the "high taxes with favored big companies getting tax breaks" strategy is a lot less fair and efficient than the "medium-low taxes for everybody" strategy. (Of course, the latter doesn't give the politicians any chances to dole out favors and toot his own horn for getting his constituents jobs!!!, so expect ongoing cronyism well into the future. why capitalism gets a bad name...)
Indeed -- and just one of the most painfully obvious illustrations of why the "high taxes with favored big companies getting tax breaks" strategy is a lot less fair and efficient than the "medium-low taxes for everybody" strategy. (Of course, the latter doesn't give the politicians any chances to dole out favors and toot his own horn for getting his constituents jobs!!!, so expect ongoing cronyism well into the future. why capitalism gets a bad name...)
The city should just embrace sunk costs, I mean, double down, and invest in helping the laid off workers create a startup scene. That at least has a hope in hell of achieving something
Most of the people in that IBM operation were probably help desk or equivalent. There's not the base skills to create a startup there. If they had the skills, they'd have moved, not taken a 46k/yr (mean) jobs from IBM.
That's the recurring story with just about any small rural place. You need a critical mass to get going and it's just not available locally. Maybe given a large university with a strong tech program you can jumpstart that but Dubuque has got only small liberal arts university run by churches...
I say this as someone living half the time in a rural place (PEI)... I work remotely for a Montreal company however when I'm there.
That's the recurring story with just about any small rural place. You need a critical mass to get going and it's just not available locally. Maybe given a large university with a strong tech program you can jumpstart that but Dubuque has got only small liberal arts university run by churches...
I say this as someone living half the time in a rural place (PEI)... I work remotely for a Montreal company however when I'm there.
I hear you, and I probably agree, but the entrepreneurial spirit can be found in the most unlikely of places, and whatever the je ne sais quoi is that makes a great founder might well be as common among "help desk or equivalent". Many people with great skills are in unlikely places because other factors in their lives are reducing their choices. I worked for a bootstrapped startup in rural England that made a successful exit (acquisition by Microsoft), you never know.
Unicorns will happen. My partner is working with a PEI-based startup (spun off from local Uni) that has a good many clients, a well established niche and probably more programmers working for them then any other company on the island that isn't a body shop.
Doesn't stop them from being special snowflakes rather than a thriving ecosystem. Contrast with a place like NYC or SF where there's funding, support, mentoring available and a wide pool for hiring. In PEI, the second biggest challenge after finding someone is retaining them lest they leave the island to make 50-70% more in TO.
Doesn't stop them from being special snowflakes rather than a thriving ecosystem. Contrast with a place like NYC or SF where there's funding, support, mentoring available and a wide pool for hiring. In PEI, the second biggest challenge after finding someone is retaining them lest they leave the island to make 50-70% more in TO.
Most of the people in that IBM operation were probably help desk or equivalent.
The IBM help desk (such as it is) is in India.
The IBM help desk (such as it is) is in India.
There's a multitude of interpretations there, but to me the obvious(TM) takeaway is that corporate taxes should be zeroed out for everyone, and income/consumption/environmental taxes (take your pick of weighting) increased to make up for it.
>>corporate taxes should be zeroed out for everyone
I'm probably stepping into a pre-existing argument, but forming a corporation allows me to gain benefits that would be difficult or impossible to obtain as an ordinary person. (e.g. limited liability, special tax treatment) It's not unreasonable that a corporation's owners pay additional taxes.
I'm probably stepping into a pre-existing argument, but forming a corporation allows me to gain benefits that would be difficult or impossible to obtain as an ordinary person. (e.g. limited liability, special tax treatment) It's not unreasonable that a corporation's owners pay additional taxes.
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The company fucked over the communities is received tax breaks from, so they should be rewarded with simply not having to pay taxes at all? What kind of backwards ass thinking is that? If I don't pay my taxes next year, can I get the same deal?
> The company fucked over the communities is received tax breaks from, so they should be rewarded with simply not having to pay taxes at all?
More like: "the politicians responsible for setting tax policy routinely end up abusing small companies with high taxes while rewarding big companies with low taxes and claims of Jobs Jobs Jobs (re-elect me!). the jobs are frequently a lie so mostly the big companies just get unfair advantages. this is manifestly unfair to small companies and to communities. maybe politicians shouldn't tax corporate activity at all -- besides the problems mentioned already it reduces incentives to invest and to have jobs in a location -- and we should get our taxes from economic activity once the money's left the corporation, like the executives' property, or a sales tax that penalizes excessive consumption, or carbon taxes -- which might also help the environment! and then maybe we should charge companies fees for the services that they use instead of general-fund spending so that companies have a harder time offloading costs onto the jurisdictions where they're hosted."
This is a fairly common economically-conservative public-policy position. It can be debated as desirable or undesirable, but!!! it is consistent and coherent and does attempt to achieve equity under the law. It's probably hardest to implement in a place like the US where there are multiple jurisdictions involved and the revenue from a sales tax or property tax could end up far away from the communities where the corporations impose costs (though the fee-for-services model does mitigate that).
More like: "the politicians responsible for setting tax policy routinely end up abusing small companies with high taxes while rewarding big companies with low taxes and claims of Jobs Jobs Jobs (re-elect me!). the jobs are frequently a lie so mostly the big companies just get unfair advantages. this is manifestly unfair to small companies and to communities. maybe politicians shouldn't tax corporate activity at all -- besides the problems mentioned already it reduces incentives to invest and to have jobs in a location -- and we should get our taxes from economic activity once the money's left the corporation, like the executives' property, or a sales tax that penalizes excessive consumption, or carbon taxes -- which might also help the environment! and then maybe we should charge companies fees for the services that they use instead of general-fund spending so that companies have a harder time offloading costs onto the jurisdictions where they're hosted."
This is a fairly common economically-conservative public-policy position. It can be debated as desirable or undesirable, but!!! it is consistent and coherent and does attempt to achieve equity under the law. It's probably hardest to implement in a place like the US where there are multiple jurisdictions involved and the revenue from a sales tax or property tax could end up far away from the communities where the corporations impose costs (though the fee-for-services model does mitigate that).
Dubuquer here. This was totally the City of Dubuque's attempt to grow (establish?) a tech scene. Dubuque doesn't have enough computer science graduates to support it. I'm at the biggest "software" company in the city, and we can't find quality talent within an hour commute.
As others in the thread have stated, this place was a glorified call center. No research or development going on. I have friends who still work there, and I've watched their careers completely stagnate.
In Dubuque, IBM was where you went when you couldn't get a tech job elsewhere in the city. Not anymore. The article says that the average pay at IBM was $46,000 but I don't know anyone who actually made that much. IBM said they'd bring 1300 jobs, but they barely cracked 1000.
Anyone who thinks they'll still be here in 10 years is kidding themselves.
As others in the thread have stated, this place was a glorified call center. No research or development going on. I have friends who still work there, and I've watched their careers completely stagnate.
In Dubuque, IBM was where you went when you couldn't get a tech job elsewhere in the city. Not anymore. The article says that the average pay at IBM was $46,000 but I don't know anyone who actually made that much. IBM said they'd bring 1300 jobs, but they barely cracked 1000.
Anyone who thinks they'll still be here in 10 years is kidding themselves.
I'm at the biggest "software" company in the city, and we can't find quality talent within an hour commute.
This is your company?... http://www.cartegraph.com/careers
Had I stumbled upon your website on my own, I would get the distinct impression that you are presently NOT looking for any developers, since the only jobs listed are in sales.
If you'd consider hiring someone to work remotely 3-4 days a week and drive in to Dubuque 1-2 days a week, I'd think you'd get some hits from Cedar Rapids, which might be enough to broaden your options.
This is your company?... http://www.cartegraph.com/careers
Had I stumbled upon your website on my own, I would get the distinct impression that you are presently NOT looking for any developers, since the only jobs listed are in sales.
If you'd consider hiring someone to work remotely 3-4 days a week and drive in to Dubuque 1-2 days a week, I'd think you'd get some hits from Cedar Rapids, which might be enough to broaden your options.
I should've clarified that we aren't exactly HURTING for developers, but when positions are open they stay open for awhile.
We're generally looking for people already up to speed on our stack (which isn't to say this is an explicit requirement) with a few (2+) years experience. We generally hire interns during the summer and many of them have go on to become FTEs.
We have remote employees (in Iowa) and a second office in Colorado, but being just a medium size company, it's hard for us to compete with McKesson (across the street from us), Rockwell Collins, Deere, etc for such a small talent pool.
We're generally looking for people already up to speed on our stack (which isn't to say this is an explicit requirement) with a few (2+) years experience. We generally hire interns during the summer and many of them have go on to become FTEs.
We have remote employees (in Iowa) and a second office in Colorado, but being just a medium size company, it's hard for us to compete with McKesson (across the street from us), Rockwell Collins, Deere, etc for such a small talent pool.
Or heaven forbid just hire me to work remotely. Why do I need to pretend I'm some local by coming in 2x a week?
Areas without talent that need devs and are anti-telework deserve to be punished, imo. The 1950's ideal of everyone being in the office is antiquated and a competitive failure.
Areas without talent that need devs and are anti-telework deserve to be punished, imo. The 1950's ideal of everyone being in the office is antiquated and a competitive failure.
That too. :-) Though I thought my suggested approach might be more palatable to anyone initially opposed to remote working.
> I'm at the biggest "software" company in the city, and we can't find quality talent...
> the average pay at IBM was $46,000
I think I can solve your talent problem, and I won't even charge you for the insight: Pay more.
Presumably you're in a high-margin (software!) industry. If revenues are reasonable, then you can afford to pay higher salaries. Given the untethered lifestyle of younger generations, you're effectively competing with the entire nation. Even SFBA, with its absurd cost of living, offers a better pay-to-living situation than $46k in Iowa.
But there's good news! With housing in Mountain View at all time highs (yes, a 2 bdrm home runs ~$800k)... there's lots of good software engineers who spend a few years here and then look to the MidWest. The classic relocations are to Austin TX and Boulder CO. Pay up, and you might have an easier time recruiting people heading back to the MidWest. (BTW: I'm from Nebraska.)
> the average pay at IBM was $46,000
I think I can solve your talent problem, and I won't even charge you for the insight: Pay more.
Presumably you're in a high-margin (software!) industry. If revenues are reasonable, then you can afford to pay higher salaries. Given the untethered lifestyle of younger generations, you're effectively competing with the entire nation. Even SFBA, with its absurd cost of living, offers a better pay-to-living situation than $46k in Iowa.
But there's good news! With housing in Mountain View at all time highs (yes, a 2 bdrm home runs ~$800k)... there's lots of good software engineers who spend a few years here and then look to the MidWest. The classic relocations are to Austin TX and Boulder CO. Pay up, and you might have an easier time recruiting people heading back to the MidWest. (BTW: I'm from Nebraska.)
Exactly! There is not an engineering talent shortage- if you paid as much as medicine, you'd get plenty.
"Engineering talent shortage for cheap developers who have high skill levels"
> Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent
Could be they are geniuses: banking on IBM laying off tech workers in order to get the startup scene going in the wake. Scratch that. Having seen some of these legislative bodies at work, that's too advanced.
Could be they are geniuses: banking on IBM laying off tech workers in order to get the startup scene going in the wake. Scratch that. Having seen some of these legislative bodies at work, that's too advanced.
They were trying to create a tech ecosystem, of which IBM and startups would be parts of. Not creating startups from luring IBM. But yes, this was totally predictable.
I can't believe no one mentioned this gem:
"Grassley, a Republican, wrote to Rometty on April 16 to express concern about “reports of mass layoffs” even as IBM requested H-1B work visas to allow 5,800 foreign employees to be authorized to work for the company in the U.S."
"Grassley, a Republican, wrote to Rometty on April 16 to express concern about “reports of mass layoffs” even as IBM requested H-1B work visas to allow 5,800 foreign employees to be authorized to work for the company in the U.S."
I saw that too and was going to comment on it.
I'm starting to see a lot more companies who are starting to outsource their work to H1-B's and even moving a lot of their work to India.
My sister worked at Cargill for 20 years and just recently found out her entire department (enterprise application development) with all her developers were being canned and the jobs sent over to India.
Hell, the current project I'm on, we have a team of 23 people and myself and one BA are the only American born people on the team. The rest are all from India and have to go back in a few months when their H1-B visas expire.
Two years ago, I found out Thomson Reuters were in the process of outsourcing 80% of their development in a combination of H1-B's and work going directly to India.
I always thought as a developer my job would be relatively safe and I could work in a nice stable corporate environment - guess I was wrong.
I'm starting to see a lot more companies who are starting to outsource their work to H1-B's and even moving a lot of their work to India.
My sister worked at Cargill for 20 years and just recently found out her entire department (enterprise application development) with all her developers were being canned and the jobs sent over to India.
Hell, the current project I'm on, we have a team of 23 people and myself and one BA are the only American born people on the team. The rest are all from India and have to go back in a few months when their H1-B visas expire.
Two years ago, I found out Thomson Reuters were in the process of outsourcing 80% of their development in a combination of H1-B's and work going directly to India.
I always thought as a developer my job would be relatively safe and I could work in a nice stable corporate environment - guess I was wrong.
H1B is not outsourcing. They are full time local workers by definition.
It's amazing companies can get away with firing people and then hiring H1Bs, who, by the government requirements, can't take a citizen's job place.
It's amazing companies can get away with firing people and then hiring H1Bs, who, by the government requirements, can't take a citizen's job place.
The problem with H1B is that it is half-sourcing. Sure, they are full time local workers, but they also lack the ability to quit and stay in the USA. So they aren't truly part of the local job scene either.
The system needs to be changed so that a tech worker who gets pulled over can quickly get residency and a path to citizenship.
I'd also make sure that anyone graduating from an decent American university gets permanent residency. If we are going to let Stanford or UIUC charge these people 40k a year to go to school and become some of the finest engineers, they should be able to be American Engineers.
The system needs to be changed so that a tech worker who gets pulled over can quickly get residency and a path to citizenship.
I'd also make sure that anyone graduating from an decent American university gets permanent residency. If we are going to let Stanford or UIUC charge these people 40k a year to go to school and become some of the finest engineers, they should be able to be American Engineers.
H-1B status is a form of slavery for the visa-holder, unless they are smart and get a second visa somehow. If an H-1B is terminated, they must leave the country immediately - the employer's final responsibility to the visa-holder is to buy them a plane ticket hom. They could potentially sue their employer for wrongful termination but if they cannot stay in the country to pursue their case, this is extremely difficult.
What is all means is that for an abusive employer, H-1B employees are perfect. They are supposed to get paid more than the prevailing wage, but can be worked to death, and effectively deported if they won't and can't do what they're told to do.
What is all means is that for an abusive employer, H-1B employees are perfect. They are supposed to get paid more than the prevailing wage, but can be worked to death, and effectively deported if they won't and can't do what they're told to do.
Sure, they are full time local workers, but they also lack the ability to quit and stay in the USA.
As long as they find a new job before they quit, they are fine. Every prospective H1B I've ever met knew this and was completely willing to jump ship if their first US-based job sucked.
As long as they find a new job before they quit, they are fine. Every prospective H1B I've ever met knew this and was completely willing to jump ship if their first US-based job sucked.
H1B is not outsourcing.
By definition perhaps, but not in practice. When a company replaces long term employees with H1B's, the H1B's are (in my experience) typically employed by a third party such as a foreign based service provider. Most of the largest users of H1B's are outsourcing agencies.
By definition perhaps, but not in practice. When a company replaces long term employees with H1B's, the H1B's are (in my experience) typically employed by a third party such as a foreign based service provider. Most of the largest users of H1B's are outsourcing agencies.
But didn't you know there was a massive STEM worker shortage?!
If you read the labor department site on H1B, "not replacing an American job" is actually not a requirement. Highly skilled, yes. But the part about the resume needing to perfectly suit just the H1B application (which, I've heard about for years, and even seen it done) actually I couldn't find it in the law. Seems like it's folk lore.
>>If you read the labor department site on H1B, "not replacing an American job" is actually not a requirement.
It's an implicit requirement. In order for the H1B application to be approved, the company needs to demonstrate that American workers with equal skill were not available to fill that position. The amount of paperwork required for this process is insane. The application needs to show things like job postings on local newspapers, online ads, etc. as well as a list of who applied and why they got denied (or got offers but rejected them).
It's an implicit requirement. In order for the H1B application to be approved, the company needs to demonstrate that American workers with equal skill were not available to fill that position. The amount of paperwork required for this process is insane. The application needs to show things like job postings on local newspapers, online ads, etc. as well as a list of who applied and why they got denied (or got offers but rejected them).
The requirement is that the alien must be paid a prevailing wage. I'm not sure what an "implicit" requirement is, but if you can find anywhere it actually says "you must try to hire an American first" I would love to see it...
[1] - http://www.uscis.gov/eir/visa-guide/h-1b-specialty-occupatio...
[1] - http://www.uscis.gov/eir/visa-guide/h-1b-specialty-occupatio...
You are looking in the wrong place. The requirement I mentioned is enforced by the Department of Labor, not USCIS. It's part of the "labor certification" process, which is a pre-requisite to the H1B application. See this page:
http://www.dol.gov/compliance/guide/h1b.htm
Specifically:
>>H-1B dependent employers and willful violator employers must attest to the following three elements addressing non-displacement and recruitment of U.S. workers:
>>-- The employer will not displace any similarly employed U.S. worker within 90 days before or after applying for H-1B status, or an extension of status for any H-1B worker;
>>-- ...
>>-- The employer, before applying for H-1B status for any alien worker pursuant to an H-1B LCA, took good faith steps to recruit U.S. workers for the job for which the alien worker is sought, at wages at least equal to those offered to the H-1B worker. Also, the employer will offer the job to any U.S. worker who applies and is equally or better qualified than the H-1B worker. This attestation does not apply if the H-1B worker is a "priority worker" (see Section 203(b) (1) (A), (B), or (C) of the INA).
http://www.dol.gov/compliance/guide/h1b.htm
Specifically:
>>H-1B dependent employers and willful violator employers must attest to the following three elements addressing non-displacement and recruitment of U.S. workers:
>>-- The employer will not displace any similarly employed U.S. worker within 90 days before or after applying for H-1B status, or an extension of status for any H-1B worker;
>>-- ...
>>-- The employer, before applying for H-1B status for any alien worker pursuant to an H-1B LCA, took good faith steps to recruit U.S. workers for the job for which the alien worker is sought, at wages at least equal to those offered to the H-1B worker. Also, the employer will offer the job to any U.S. worker who applies and is equally or better qualified than the H-1B worker. This attestation does not apply if the H-1B worker is a "priority worker" (see Section 203(b) (1) (A), (B), or (C) of the INA).
Thank you so much for pointing that out! So these requirements apply specifically for "H-1B dependent employers" and "willful violator employers".
I found this flier [1] defining "H-1B dependent employers".
I have to believe the requirement must not apply... because any good faith effort to hire a U.S. worker for the 95th percentile H-1B job would result in a U.S. worker being hired. If it actually did apply in most H-1B cases, then I want to sign up for the class action suing basically every tech company there is that has ever hired an H-1B.
EDIT: Thinking more on the 15% threshold for large companies... that is incredibly high. Seems like it's off from where it reasonably should be by more than an order of magnitude!
EDIT 2: Also, there is this: "H-1B dependent employers who wish to hire only H-1B workers who are paid at least $60,000 per year or have a master's degree or higher in a specialty related to the employment, can be exempted from these additional rules."
[1] - http://www.dol.gov/whd/regs/compliance/FactSheet62/whdfs62C....
I found this flier [1] defining "H-1B dependent employers".
An employer is considered H-1B-dependent if it has:
• 25 or fewer full-time equivalent employees and at least
eight H-1B nonimmigrant workers; or
• 26 - 50 full-time equivalent employees and at least 13 H-1B
nonimmigrant workers; or
• 51 or more full-time equivalent employees of whom 15 percent or
more are H-1B nonimmigrant workers.
I have to believe the requirement must not apply... because any good faith effort to hire a U.S. worker for the 95th percentile H-1B job would result in a U.S. worker being hired. If it actually did apply in most H-1B cases, then I want to sign up for the class action suing basically every tech company there is that has ever hired an H-1B.
EDIT: Thinking more on the 15% threshold for large companies... that is incredibly high. Seems like it's off from where it reasonably should be by more than an order of magnitude!
EDIT 2: Also, there is this: "H-1B dependent employers who wish to hire only H-1B workers who are paid at least $60,000 per year or have a master's degree or higher in a specialty related to the employment, can be exempted from these additional rules."
[1] - http://www.dol.gov/whd/regs/compliance/FactSheet62/whdfs62C....
>> who, by the government requirements, can't take a citizen's job place.
The ironic part of my project is now my manager is under pressure because they want to start converting people to full-time and I'm the only one eligible since the rest of the team all have to go back to India soon.
In my 1:1 meeting's my manager is always frustrated since the executives want more full time people, but keep bringing in H1-B's. They just don't get it.
The ironic part of my project is now my manager is under pressure because they want to start converting people to full-time and I'm the only one eligible since the rest of the team all have to go back to India soon.
In my 1:1 meeting's my manager is always frustrated since the executives want more full time people, but keep bringing in H1-B's. They just don't get it.
This sounds like Cargill warped back to 2004.
>reports of mass layoffs
Whatever happened to the Cringley reported mass layoffs?
http://www.cringely.com/2015/01/22/ibms-reorg-hell-launches-...
IBM’s big layoff-cum-reorganization called Project Chrome kicks-off next week when 26 percent of IBM employees will get calls from their managers followed by thick envelopes on their doorsteps. By the end of February all 26 percent will be gone. I’m told this has been in the planning for months and I first heard about it back in November.
Whatever happened to the Cringley reported mass layoffs?
http://www.cringely.com/2015/01/22/ibms-reorg-hell-launches-...
IBM’s big layoff-cum-reorganization called Project Chrome kicks-off next week when 26 percent of IBM employees will get calls from their managers followed by thick envelopes on their doorsteps. By the end of February all 26 percent will be gone. I’m told this has been in the planning for months and I first heard about it back in November.
http://www.forbes.com/sites/benkepes/2015/01/28/the-ibm-axe-...
https://gigaom.com/2015/01/28/looks-like-those-ibm-layoffs-h...
https://gigaom.com/2015/01/28/looks-like-those-ibm-layoffs-h...
Those articles are from January, and Cringley said 25% of the workforce would be gone by Feb. It never happened. There have been layoff, and one day in the future it might amount to 100k, but nothing like 100k people in a month, or 5. Typical Cringley "take this little fact, coat thickly with histrionics and invective to drive clicks, and declare yourself a genius insider when the little fact turns out to be true".
'Spent' is an interesting word here, given that this was entirely done in tax breaks. It's not as if the state's coffers have $50m less than if they hadn't done this deal at all - in fact it was still likely a net + for them.
If they hadn't given the tax breaks then IBM wouldn't have come at all - bringing zero dollars with them. At least this way there are hundreds of people employed, land being rented, utilities being used etc.
Oh, and according to the article the tax breaks were suspended when the number of employees dropped too low - perhaps that minimum number could have been set higher?
Obviously this didn't turn out as well as the state wanted it to, but it's not like it actually cost them any real dollars in the long run...
If they hadn't given the tax breaks then IBM wouldn't have come at all - bringing zero dollars with them. At least this way there are hundreds of people employed, land being rented, utilities being used etc.
Oh, and according to the article the tax breaks were suspended when the number of employees dropped too low - perhaps that minimum number could have been set higher?
Obviously this didn't turn out as well as the state wanted it to, but it's not like it actually cost them any real dollars in the long run...
"Instead, Ross found herself toiling on what she described as a new-age assembly line -- each employee solving a narrowly focused part of a corporate customer’s technical problem and then passing the baton to the next person."
Can anyone decipher the above and explain what kind of work IBM employees in these kinds of offices perform?
Can anyone decipher the above and explain what kind of work IBM employees in these kinds of offices perform?
Mostly operations, I imagine: OS, database & storage administration.
While other companies were investing in their employee base, IBM was cutting costs. Much like a farmer who eats his seed corn and then has nothing to plant while others steward their resources carefully and see a bumper crop, IBM is seeing the results of over a decade of underinvestment: who here would choose an IBM cloud solution over AWS, Google, DigitalOcean or Linode?
While those companies were hiring smart people to design & implement well-crafted systems, IBM was cutting, cutting, cutting, using human beings to do work which is better scripted, underinvesting in automation and generally setting itself up for failure.
While other companies were investing in their employee base, IBM was cutting costs. Much like a farmer who eats his seed corn and then has nothing to plant while others steward their resources carefully and see a bumper crop, IBM is seeing the results of over a decade of underinvestment: who here would choose an IBM cloud solution over AWS, Google, DigitalOcean or Linode?
While those companies were hiring smart people to design & implement well-crafted systems, IBM was cutting, cutting, cutting, using human beings to do work which is better scripted, underinvesting in automation and generally setting itself up for failure.
> who here would choose an IBM cloud solution over AWS, Google, DigitalOcean or Linode?
Why do you think IBM bought Softlayer?
Why do you think IBM bought Softlayer?
Who?
http://softlayer.com
Surprised you haven't heard of them -- they're a pretty big player in the datacenter space. Also, I know for a fact that a good chunk of Linode's servers are actually hosted at Softlayer DCs (e.g. any Linode server hosted in Dallas is physically at Softlayer's DAL-2 location, which used to be called The Planet).
My best friend is a tech there, he joined right after the acquisition, and he tells me that the word around the office is "IBM wanted to have a good cloud business, so they bought one".
Surprised you haven't heard of them -- they're a pretty big player in the datacenter space. Also, I know for a fact that a good chunk of Linode's servers are actually hosted at Softlayer DCs (e.g. any Linode server hosted in Dallas is physically at Softlayer's DAL-2 location, which used to be called The Planet).
My best friend is a tech there, he joined right after the acquisition, and he tells me that the word around the office is "IBM wanted to have a good cloud business, so they bought one".
Yup. Between Softlayer as an IaaS provider and BlueMix as a PaaS provider, IBM has top-shelf (not the best, but close) cloud talent and tooling.
They aren't sexy, which is probably why they don't get much play on HN, but they're important and influential.
They aren't sexy, which is probably why they don't get much play on HN, but they're important and influential.
> who here would choose an IBM cloud solution over AWS, Google, DigitalOcean or Linode
I'd pick CloudFoundry over any of those at a large enterprise shop, and BlueMix is a legit implementation. (As is Pivotal, if that's your bag.)
I'd pick CloudFoundry over any of those at a large enterprise shop, and BlueMix is a legit implementation. (As is Pivotal, if that's your bag.)
With the 100% uptime I have with digital ocean (so far), i'd never go anywhere else.
I had a job once where I provisioned storage. As in, log into a filer/array (NetApps in my case), create a volume, hand it off typically to system admins that would then create a VM or use the volume for something else. That was it, my portion was mostly "create volume 500G" and sometimes a few extra configuration steps, like mirroring or setting up replication.
I don't know what that IBM office was doing specifically, but I can easily imagine the situation described in the article!
I looked into moving up the stack, so to speak, as soon as I could because that job was so hyperspecialized it was essentially non-transferable.
I don't know what that IBM office was doing specifically, but I can easily imagine the situation described in the article!
I looked into moving up the stack, so to speak, as soon as I could because that job was so hyperspecialized it was essentially non-transferable.
Astonishing. Did you realize what your responsibilities would be when you were hired? Could only imagine having to do a full blown tech interview to find out the position was mundane and could be scripted.
No, the interview was fairly vague and thus partly my fault for not getting a better description.
To be fair, the other areas within that office were hardware related (setting up SANs, configuring and cabling them up) so had I stayed I would have learned that.
I described it like this to friends who asked: what I wanted was "The Unix/Linux System Administrators Handbook", what I got was "Chapter 8: Storage" or even just the "Disk Partitioning" subsection of Chapter 8 of that book. ;)
To be fair, the other areas within that office were hardware related (setting up SANs, configuring and cabling them up) so had I stayed I would have learned that.
I described it like this to friends who asked: what I wanted was "The Unix/Linux System Administrators Handbook", what I got was "Chapter 8: Storage" or even just the "Disk Partitioning" subsection of Chapter 8 of that book. ;)
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Call center?
I live in Dubuque Iowa, and I'll say this, everyone knew IBM was only coming for a short period of time. This was expected from everyone here.
Dubuque has a long history of trying to lure people here, and it's horrible. First it was luring blacks from Chicago with free housing and prepaid credit cards to up the minority count so the city could qualify for grants. Then it was IBM.
Not much smart people here.
Dubuque has a long history of trying to lure people here, and it's horrible. First it was luring blacks from Chicago with free housing and prepaid credit cards to up the minority count so the city could qualify for grants. Then it was IBM.
Not much smart people here.
"cloud computing, which allows IBM’s corporate customers to fix problems online rather than deal with human beings"
That's a new definition of "cloud computing". And you'd think that Bloomberg would have figured it out by now, since the term has been around for years.
That's a new definition of "cloud computing". And you'd think that Bloomberg would have figured it out by now, since the term has been around for years.
Cloud, as in Blowing Smoke.
If city officials bothered with a little research (assuming they don't already know), they'd find several examples of Big Co. entering and leaving small cities and towns without creating economic value equivalent to the huge incentives used to lure them in. Very similar to how officials chase Olympic hosting bids, even when history clearly shows that the legacy is additional debt and underutilized facilities (e.g. purpose-built stadiums/villages that only get used during the occasion).
Everytime I read of such schemes, I can't help but wonder how much lasting value could have been created by using just a minute fraction of the money wasted to foster the local startup/small business scene instead.
Everytime I read of such schemes, I can't help but wonder how much lasting value could have been created by using just a minute fraction of the money wasted to foster the local startup/small business scene instead.
Or even just leaving the money in people's pockets. I'm not a person who thinks that all government destroys value, but this is a pretty clear example of a time when the government extracted millions of dollars of productive resources and poured it into an idiotic scheme.
Everyone would be better off today (except IBM's investors) if the city officials responsible for this fiasco had just been given a free lifelong vacation starting the day they started planning it.
Everyone would be better off today (except IBM's investors) if the city officials responsible for this fiasco had just been given a free lifelong vacation starting the day they started planning it.
Why do you think any money was actually spent on this? These were tax breaks - a reduction or elimination of tax payments that IBM wouldn't have made is they hadn't moved in anyway. How is that taking money out of people's pockets?
Tax breaks are just some of the incentives. E.g. Dubuque also renovated a historic building for IBM, which cost money upfront.
That said, I think tax breaks ultimately cost money, especially when the locals hired earn less than projected (thus, contributing less in income tax to city and less in spending to local industries) while company enjoys little to no tax, makes money and uses other municipal resources without adequate contribution.
That said, I think tax breaks ultimately cost money, especially when the locals hired earn less than projected (thus, contributing less in income tax to city and less in spending to local industries) while company enjoys little to no tax, makes money and uses other municipal resources without adequate contribution.
It was basically just a call center with sys admins that would remote into servers and give them a kick when needed. Oh an a handful of developers. It was clear as day they weren't going to stick around, since the more interesting positions were being held in other IBM offices. It's a bit of a shame really, there's plenty of smart/technical kids from Dubuque, they just go to Des Moines and Cedar rapids to work at places like John Deere and Rockwell Collins -- because even with IBM, there was no reason to stay.
Still waiting for a state's voters to pass a ballot measure that constitutionally prohibits the state or any municipality within it from establishing preferential/discriminatory tax regimes. If you want to put this pandering to bed, it's surprisingly easy to do. Just be sure you're prepared for the corporate money flooding in from all points of the compass to defeat you with scare ads. Megalocorp knows it can't afford to let even one state do this; then their game will be up.
> “Four years is light years in technology,” [the local official] said.
I wonder whether the journalist purposely used this as the article's final sentence to demonstrate that politicians don't "get" science/technology... or maybe relating a length of time to a distance slipped past the writer and editor(s) as well.
I wonder whether the journalist purposely used this as the article's final sentence to demonstrate that politicians don't "get" science/technology... or maybe relating a length of time to a distance slipped past the writer and editor(s) as well.
I thought that was a bit ignorant to throw in there too, but sadly, have gotten used to seeing nonsense like that in "serious" articles.
Motorola basically did the same thing in a Northern Illinois community. I think the massive site stayed open a little more than a year. It still today remains a huge empty space sitting in the prairie some fifteen year on.
Similar outcome, but happened for different reasons. The CEO lived in McHenry and, essentially, wanted work to be closer to his house. When the plant was closed, it was because Motorola had been fundamentally mismanaged, which is different from IBM's cost-cutting to maintain its successful strategy.
I am in the Rockford area and saw a lot of friends suffer financially because of Motorola's missteps. Rockford also competed with Dubuque to get IBM, and for the same reasons (vague intentions to anchor a tech scene), but was disqualified early in the selection process because it didn't have a minimum threshold of college graduates.
I am in the Rockford area and saw a lot of friends suffer financially because of Motorola's missteps. Rockford also competed with Dubuque to get IBM, and for the same reasons (vague intentions to anchor a tech scene), but was disqualified early in the selection process because it didn't have a minimum threshold of college graduates.
It's the same for small suppliers as well, not just locations, depending on large companies for business.
If the large company takes their business away, trauma normally ensues for the small supplier/location.
I worked for an oil major who wouldn't do business with small suppliers for this reason.
If the large company takes their business away, trauma normally ensues for the small supplier/location.
I worked for an oil major who wouldn't do business with small suppliers for this reason.
incentives to lure Big Blue in the hopes of attracting other technology firms and incubating a startup scene
Based on unsatisfied ex-IBM employees? :-) they surely have the numbers.
Based on unsatisfied ex-IBM employees? :-) they surely have the numbers.
Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent.
> Instead, Ross found herself toiling on what she described as a new-age assembly line — each employee solving a narrowly focused part of a corporate customer’s technical problem and then passing the baton to the next person. As a result, said some of IBM’s Dubuque workers, they became experts only in a narrow set of skills that weren’t easily transferable.
That's exactly IBM's MO: try to solve problems with a smart process executed by low-skilled people. Never mind that a process can never execute judgement, and that low-skilled people executing a process never get the experience needed to develop their own judgement. Never mind that deep knowledge is necessary to solve complex problems.
From IBM's perspective, it's good to have low-skilled people who can't easily find jobs elsewhere: it means lower wages and less turnover (and when there is turnover, imparting a few low skills to new hires is easy!). Never mind that if other places wouldn't want to hire them, then one probably doesn't have a reason to hire them either. Never mind that if one's company is composed of low-skilled employees, then customers don't have much reason to use one's services.