IBM’s Reputation Rating Collapses

IBM is among the great American business failures of the past several decades. In 1980, IBM was the eighth largest corporation in the country, according to the Fortune 500. It was bigger than General Electric. No other tech company was in the top 30 companies on the list. In the current Fortune list, IBM ranks 49th. It is miles behind Alphabet, Amazon, Apple and a small army of other tech companies. By any measure, IBM is big tech’s largest failure. A recent survey by Axios Harris shows how far its reputation has fallen. (These companies have the best reputations.)

In The Axios Harris Poll 100 2023 Corporate Reputation Rankings, IBM’s ranking fell 19 places to 30th. It received particularly poor grades for “citizenship” and “vision.” The researchers polled 16,310 Americans between March 13 and March 28. First, the poll determined the 100 most visible companies in the United States. People are then asked which two companies have the worst reputations and which have the best. Companies receive a score between 100 and 0. IBM’s overall score was 77.8.

Several tech companies had better scores than IBM. Samsung ranked seventh with a score of 81.0. Amazon ranked eighth with a score of 80.7. Apple ranked 10th with a score of 80.6 and Microsoft 15th with a score of 79.7.

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The gulf between Microsoft and IBM is an example of what has happened to the older company. IBM’s latest earnings report showed it had revenue of $14.2 billion. This was barely up from the same period a year ago. Net income, at $927 million, did better. A year ago, the figure was $733 million. By comparison, in its most recently reported quarter, Microsoft’s revenue was $52.7 billion, up only slightly. It made $16.4 billion. Its cloud-computed business drove revenue and is second only to Amazon’s in market share.

IBM often talks about its cloud business, which is small compared to Amazon and Microsoft. IBM Chief Executive Officer Arvind Krishna said its earnings were successful because of “our unique combination of an open hybrid cloud platform, enterprise-focused AI, and business expertise.” He cannot make a case that his business in these areas is anywhere near the industry leaders.

IBM’s reputation is slipping, which almost certainly will continue as the gulf between it and larger tech companies widens.

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