IBM reported its first quarter earnings last week, missing the Street’s estimate for the first time in nearly 8 years. The news sent IBM’s stock tumbling down, and forced CEO Virginia Rometty to reassign one of her top execs. The exec also released an “unusually blunt” video memo in which she chided the company’s 434,000 employees, the Wall Street Journal reported.

Rodney Adkins, the former head of IBM’s Systems and Technology Group, is now the company’s senior vice president for corporate strategy. Tom Rosamilia, who, up until recently, served as vice president of Corporate Strategy and general manager of Enterprise Initiatives, is stepping into Adkins’ shoes.

The move is hardly surprising. During last week’s earnings call IBM CFO Mark Loughridge called out the hardware unit, which saw revenue decline by 17 percent in the first quarter. This massive slump was blamed on the group’s failure to finalize numerous multi-million dollar mainframe deals in a timely fashion.

Wikibon co-founder and chief analyst Dave Vellante pointed out that on its earnings call IBM blamed poor sales execution. Vellante questioned the move to replace Adkins, the divisional GM saying, “I’m not sure replacing Rod Adkins with another long time exec with similar background will change anything.” He commented that in order to succeed, “IBM needs to completely remake its hardware business and bring hyperscale-like capabilities to the enterprise and bring flash as a memory extension to the market. Also IBM needs to take a page out of its Linux playbook and bring a value add on top of open source mindset to systems and storage.”

In her video message, Rometty told employees that “where we haven’t transformed rapidly enough, we struggled. We were too slow to understand the value and then engage on the approval and the sign-off process. The result? It didn’t get done.”

Historically, IBM has been quick to respond to changes in the marketplace. The company sold its PC business to Lenovo nearly 10 years ago, long before mobile devices starting chipping away at the industry, and now rumor has it that it’s planning to get rid of its x86 server business, a move that while many on Wall Street applaud, some analysts call into question. One insider we spoke with on the condition of anonymity indicated this move might placate financial analysts but it cuts against the grain of the server industry which has largely moved to virtualized x/86 servers.

Wikibon CTO David Floyer agrees. He says the move to PCIe as a high speed interconnect on x/86 servers would provide an opportunity for IBM to integrate flash storage and add proprietary value on top of such a system design. On a Breaking Analysis call this week Floyer flat out said that IBM selling its x/86 server business to Lenovo would be a mistake. He points out in this video below that IBM’s recent announcement to invest $1B in flash is an opportunity to integrate flash with x/86 servers and add value on top. He contends that selling its x/86 server business would tie one hand behind IBM’s back and limit IBM’s potential to compete in the fast-growing hyperscale market.