Cloud Computing: IBM and SAP – Victims of Creative Destruction in the IT Industry
July 17, 2014
Grazed from Forbes. Author: Thomas Landstreet.
When you read that IT spending is weak, as Gartner announced recently, don’t let it spook you – that’s the whole point of cloud computing. It dramatically lowers the cost of owning information technology. As more and more firms adopt cloud computing, legacy IT companies are left with bloated infrastructures and stale business models. I view cloud computing as a classic case of creative destruction with fat legacy software, hardware and IT services margins as the only victim.
As we approach earnings season, I want to highlight three companies that I think will report weak results driving their share prices lower. IBM IBM +2.05% and SAP report earnings tomorrow and CapGemini reports on July 31st. They’re all in the same boat but for slightly different reasons…
Even mighty Oracle ORCL -0.69% has missed expectations for 5 of the last 6 quarters. And Accenture guided down expectations citing lower margins. The bigger they are, the more vulnerable they are…
Read more from the source @ http://www.forbes.com/sites/thomaslandstreet/2014/07/16/ibm-and-sap-victims-of-creative-destruction-in-the-it-industry/