Comment by getnormality 11 hours ago
A decade ago, IBM was spending enormous amounts of money to tell me stuff like "cognitive finance is here" in big screen-hogging ads on nytimes.com. They were advertising Watson, vaporware which no one talks about today. Are they bitter that someone else has actually made the AI hype take off?
Xerox was also famously early with a lot of things but failed to create proper products out of it.
Google falls somewhere in the middle. They have great R&D but just can’t make products. It took OpenAI to show them how to do it, and the managed to catch up fast.
"They have great R&D but just can’t make products"
Is this just something you repeat without thinking? It seems to be a popular sentiment here on Hacker News, but really makes no sense if you think about it.
Products: Search, Gmail, Chrome, Android, Maps, Youtube, Workspace (Drive, Docs, Sheets, Calendar, Meet), Photos, Play Store, Chromebook, Pixel ... not to mention Cloud, Waymo, and Gemini ...
So many widely adopted products. How many other companies can say the same?
What am I missing?
I don't think Google is bad at building products. They definitely are excellent at scaling products.
But I reckon part of the sentiment stems from many of the more famous Google products being acquisitions orignally (Android, YouTube, Maps, Docs, Sheets, DeepMind) or originally built by individual contributors internally (Gmail).
Then here were also several times where Google came out with multiple different products with similar names replacing each other. Like when they had I don't know how many variants of chat and meeting apps replacing each other in a short period of time. And now the same thing with all the different confusing Gemini offerings. Which leads to the impression that they don't know what they are doing product wise.
Those are all free products, some of them are pretty good. But free is the best business strategy to get a product to the top of the market. Are others better, are you willing to spend money to find out? Clearly, most people are not interested. The fact that they can destroy the market for many different types of software by giving it away and still stay profitable is amazing. But that's all they are doing. If they started charging for everything there would be better competition and innovation. You could move a whole lot of okay-but-not-great cars, top every market segment you want, if you gave them away for free. Only enthusiasts would remain to pay for slightly more interesting and specific features. Literally no business model can survive when their primary product is competing with good-enough free products.
> Products: Search, Gmail, Chrome, Android, Maps, Youtube, Workspace (Drive, Docs, Sheets, Calendar, Meet), Photos, Play Store, Chromebook, Pixel ... not to mention Cloud, Waymo, and Gemini ...
Many of those are acquisitions. In-house developed ones tend to be the most marginal on that list, and many of their most visibly high-effort in-house products have been dramatic failures (e.g. Google+, Glass, Fiber).
They come up with tons and tons of products like Google Glass and Google+ and so on and immediately abandon them. It is easy to see that there is no real vision. They make money off AdSense and their cloud services. That's about it.
I think the sentiment is usually paired with discussion about those products as long-lasting, revenue-generating things. Many of those ended up feeding back into Search and Ads. As an exercise, out of the list you described, how many of those are meaningfully-revenue-generating, without ads?
A phrasing I've heard is "Google regularly kills billion-dollar businesses because that doesn't move the needle compared to an extra 1% of revenue on ads."
And, to be super pedantic about it, Android and YouTube were not products that Google built but acquired.
And to my point, it took Apple to make the iPhone for Google to make Android.
It took OpenAI for Google to finally understand make a product out of their years if not decades of AI research.
YouTube and Maps are both acquisitions indeed.
Google had less incentive. Their incentive was to keep API bottled up and in brewing as long as possible so their existing moats in search, YouTube can extend in other areas. With openai they are forced to compete or perish.
Even with gemini in lead, its only till they extinguish or make chatgpt unviable for openai as business. OpenAI may loose the talent war and cease to be leader in this domain against google (or Facebook) , but in longer term their incentive to break fresh aligns with average user requirements . With Chinese AI just behind, may be google/microsoft have no choice either
Google was especially well positioned to catch up because they have a lot of the hardware and expertise and they have a captive audience in gsuite and at google.com.
Neither cloud computing nor AI are good long term businesses. Yes, there's money to be made in the short term but only because there's more demand than there is supply for high-end chips and bleeding edge AI models. Once supply chains catch up and the open models get good enough to do everything we need them for, everyone will be able to afford to compute on prem. It could be well over a decade before that happens but it won't be forever.
This is my thinking too. Local is going to be huge when it happens.
Once we have sufficient VRAM and speed, we're going to fly - not run - to a whole new class of applications. Things that just don't work in the cloud for one reason or another.
- The true power of a "World Model" like Genie 2 will never happen with latency. That will have to run locally. We want local AI game engines [1] we can step into like holodecks.
- Nobody is going to want to call OpenAI or Grok with personal matters. People want a local AI "girlfriend" or whatever. That shit needs to stay private for people.
- Image and video gen is a never ending cycle of "Our Content Filters Have Detected Harmful Prompts". You can't make totally safe for work images or videos of kids, men in atypical roles (men with their children = abuse!), women in atypical roles (woman in danger = abuse!), LGBT relationships, world leaders, celebs, popular IPs, etc. Everyone I interact with constantly brings these issues up.
- Robots will have to be local. You can't solve 6+DOF, dance routines, cutting food, etc. with 500ms latency.
- The RIAA is going door to door taking down each major music AI service. Suno just recently had two Billboard chart-topping songs? Congrats - now the RIAA lawyers have sued them and reached a settlement. Suno now won't let you download the music you create. They're going to remove the existing models and replace them with "officially licensed" musicians like Katy Perry® and Travis Scott™. You won't retain rights to anything you mix. This totally sucks and music models need to be 100% local and outside of their reach.
[1] Also, you have to see this mind-blowing interactive browser demo from 2022. It still makes my jaw drop: https://madebyoll.in/posts/game_emulation_via_dnn/
It is very misleading or outright perverse to write "they were selling software as a service in the IBM 360 days" when there was no public network that could be used to the deliver the service. (There were wide-area networks, but each one was used by a single organization and possibly a few of its most important customers and suppliers, hence the qualifier "public" above.)
But anyways, my question to you is, was there any software that IBM charged money for as opposed to providing the software at no additional cost with the purchase or rental of a computer?
I do know that no one sold software software (i.e., commercial off-the-shelf software) in the 1960s: the legal framework that allowed software owners to bring lawsuits for copyright violations appeared in the early 1980s.
There was an organization named SHARE composed of customers of IBM whereby one customer could obtain software written by other other customers (much like the open-source ecosystem) but I don't recall money ever changing hands for any of this software except a very minimal fee (orders of magnitude lower than the rental or purchase price of a System/360, which started at about $660,000 in 2025 dollars).
Also, IIUC most owners or renters of a System/360 had to employ programmers to adapt the software IBM provided. There is software with that quality these days, too (.e.g, ERP software for large enterprises) but no one calls that a software as a service.
> but it just wasn't IBM's software that people ended up buying.
Well, I mean, WebSphere was pretty big at the time; and IBM VisualAge became Eclipse.
And I know there were a bunch of LoB applications built on AS/400 (now called "System i") that had "real" web-frontends (though in practice, they were only suitable for LAN and VPN access, not public web; and were absolutely horrible on the inside, e.g. Progress OpenEdge).
...had IBM kept up the pretense of investment, and offered a real migration path to Java instead of a rewrite, then perhaps today might be slightly different?
I still have PTSD from how much Watson was being pushed by external consultants to C levels despite it being absolutely useless and incredibly expensive. A/B testing? Watson. Search engine? Watson. Analytics? Watson. No code? Watson.
I spent days, weeks arguing against it and ended up having to dedicate resources to build a PoC just to show it didn’t work, which could have been used elsewhere.
If anything, the fact they built such tooling might be why they're so sure it won't work. Don't get me wrong, I am incredibly not a fan of their entire product portfolio or business model (only Oracle really beats them out for "most hated enterprise technology company" for me), but these guys have tentacles just as deep into enterprises as Oracle and are coming up dry on the AI front. Their perspective shouldn't be ignored, though it should be considered in the wider context of their position in the marketplace.
Millions of people like ChatGPT. No one liked Watson.
IBM ostensibly failing with Watson (before Krishna was CEO for what it's worth) doesn't inherently invalidate his assessment here
It makes it suspect when combined with the obvious incentive to make the fact that IBM is basically non-existent in the AI space look like an intentional, sagacious choice to investors. It very may well be, but CEOs are fantastically unreliable narrators.
No, I don’t trust a word Sundar or Satya say about AI either. CEOs should be hyping anything they’re invested in, it’s literally their job. But convincing investors that every thing they don’t invest in heavily is worthless garbage is effectively part of their job too.
What is more convincing is when someone invests heavily (and is involved heavily) and then decides to stop sending good money after bad (in their estimation). Not that they’re automatically right, but is at least pay attention to their rationales. You learn very little about the real world by listening to the most motivated reasoner’s nearly fact-free bloviation.
Yeah I was going to say the same thing ha. I get what they’re (the commenter) saying, but one could also argue IBM is putting their money where their mouth is by not investing.
I suspect the reality is that they missed the boat, as they have missed tens of other boats since the mainframe market dried up. I guess you could argue they came to the boat too early with their pants on backwards (i.e. Watson), and then left before it showed up. But it’s hard to tell from the outside.
Maybe that will turn out to be a good decision and Microsoft/Google/etc. will be crushed under the weight of hundreds of billions of dollars in write-offs in a few years. But that doesn’t mean they did it intentionally, or for the right reasons.
> Are they bitter that someone else has actually made the AI hype take off?
Or they recognize that you may get an ROI on a (e.g.) $10M CapEx expenditure but not on a $100M or $1000M/$1B expenditure.
IBM has been "quietly" churning out their Granite models, with the latest of which performing quite well against LLaMa and DeepSeek. So not Anthropic-level hype but not sitting it out completely either. They also provide IP indemnification for their models, which is interesting (Google Cloud does the same).
I see Watson stuff at work. It’s not a direct to consumer product, like ChatGPT, but I see it being used in the enterprise, at least where I’m at. IBM gave up on consumer products a long time ago.
Just did some brief Wikipedia browsing and I'm assuming it's WatsonX and not Watson? It seems Watson has been pretty much discontinued and WatsonX is LLM based. If it is the old Watson, I'm curious what your impressions of it is. It was pretty cool and ahead of its time, but what it could actually do was way over promised and overhyped.
I’m not close enough to it to make any meaningful comments. I just see the name pop up fairly regularly. It is possible that some of it is WatsonX and everyone just says Watson for brevity.
One big ones used heavily is Watson AIOps. I think we started moving to it before the big LLM boom. My usage is very tangential, to the point where I don’t even know what the AI features are.
It's good we are building all this excess capacity which will be used for applications in other fields or research or open up new fields.
I think the dilemma I see with building so much data centers so fast is exactly like whether I should buy latest iPhone now or should wait few years when the specs or form factor improves later on. The thing is we have proven tech with current AI models so waiting for better tech to develop on small scale before scaling up is a bad strategy.
What related tech and what products, interesting to read about them
Such as? I'm curious because I know a bunch of people who did a lot of Watson-related work and it was all a dead end, but that was 2020-ish timeframe.
Not to be rude, but that didn't answer my question.
Taking a look at IBM's Watson page, https://www.ibm.com/watson, it appears to me that they basically started over with "watsonx" in 2023 (after ChatGPT was released) and what's there now is basically just a hat tip to their previous branding.
IBM makes WatsonX for corporate who want airgapped AI
Honestly I'm not even sure what IBM does these days. Seems like one company that has slowly been dying for decades.
but when I look at their stock, its at all time highs lol
no idea
Pretty sure they made all their money fighting the paperwork explosion.
They are in the business of international machinations.
My limited understanding (please take with a big grain of salt) is that they 1.) sell mainframes, 2.) sell mainframe compute time, 3.) sell mainframe support contracts, 4.) sell Red hat and Redhat support contracts, and 5.) buy out a lot of smaller software and hardware companies in a manner similar to private equity.
I can think of nothing more peak HN than criticizing a company worth $282 Billion with $6 billion in profit (for startup kids that means they have infinite runway and then some) that has existed for over 100 years with "I'm not even sure what they do these days". I mean the problem could be with IBM... what a loser company!
:) As much I love ragging on ridiculous HN comments, I think this one is rooted in some sensibility.
IBM doesn’t majorly market themselves to consumers. The overwhelming majority of devs just aren’t part of the demographic IBM intends to capture.
It’s no surprise people don’t know what they do. To be honest it does surprise me they’re such a strongly successful company, as little as I’ve knowingly encountered them over my career.
IBM is probably involved somewhere in the majority of things you interact with day to day
> Are they bitter that someone else has actually made the AI hype take off?
Does it matter? It’s still a scam.
I don't know that I'd trust IBM when they are pitching their own stuff. But if anybody has experience with the difficulty of making money off of cutting-edge technology, it's IBM. They were early to AI, early to cloud computing, etc. And yet they failed to capture market share and grow revenues sufficiently in those areas. Cool tech demos (like the Watson Jeopardy) mimic some AI demos today (6-second videos). Yeah, it's cool tech, but what's the product that people will actually pay money for?
I attended a presentation in the early 2000s where an IBM executive was trying to explain to us how big software-as-a-service was going to be and how IBM was investing hundreds of millions into it. IBM was right, but it just wasn't IBM's software that people ended up buying.