my asking three months ago, "At what point does IBM become overrated?" It wasn't meant as a slight against the tech giant. After all, there's no debate that IBM has earned every bit of respect that it gets. But I was nevertheless annoyed by the apparent double-standard under which the company operates. I won't argue that IBM continues to be a very profitable company. But I'm constantly in awe of the fact that despite IBM's lack of revenue growth over the past couple of years, the company's never really lost its bellwether status on Wall Street. It's as if the company is immune to criticism. This is despite having spent more than $16 billion over the past five years in acquisitions, trying to grow the top line. It hasn't worked. Nor has it seemed that Wall Street has cared. CRM), which has done an excellent job building itself into a leading software-as-a-service (SaaS) business, was winning market share from IBM. By contrast, Apple ( APPL), which, had posted exceptional growth during that same span, has had its valuation cut by almost in half from a high of $705 to a low of $385. Everyone was somehow ready to bury Apple but not IBM. I'm not blaming IBM for this, though. But still, I felt it was time to draw attention to these fundamental inequalities. And after IBM's second-quarter earnings report, I believe investors have finally gotten the memo; Big Blue needs to perform better for these shares to make sense.
Revenue, with which the company has long struggled, fell again by 3% -- missing analysts' estimates for the second consecutive quarter. If you believe that I'm being too hard on this company, understand that this quarter's 3% revenue drop preceded 4% decline in the April quarter, which then preceded a 2% drop in the January quarter. I'm sure by now you get the picture. I believe that if this was any other company not named IBM, say, BlackBerry ( BBRY) or Microsoft ( MSFT), there would have been a deluge of articles proclaiming the company's death. But not IBM. And when looking at the results on a segmental basis, there are even more reasons for concern. First, I don't like the fact that the company's usually strong service business was down 4% year over year. Service revenue has been IBM's "offsetting strength" -- supporting the company's perpetually weak hardware business, which was down again this quarter -- this time by 12%. It's time that investors face a new reality -- this company is no longer untouchable. It's going to be hard for IBM to maintain any sort of competitive advantage over Oracle ( ORCL) and Accenture ( ACN). Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.