Main image of article IBM Lags Google, Amazon, Microsoft in Engineer Compensation

Earlier this month, IBM announced that it would spin off its legacy technology services into a separate company, in order to focus exclusively on the cloud. In theory, a streamlined, cloud-centric IBM will have an easier time competing with Amazon, Microsoft, and other tech giants that have made the cloud a priority in recent years.

But IBM has a hard road ahead. Amazon Web Services (AWS) and Microsoft’s Azure dominate the business-cloud market, with Google in third place but willing to devote enormous resources to its own offerings. Meanwhile, Oracle is doing the best it can to catch up, having wrangled high-profile deals with TikTok and Zoom

Can IBM win? Big Blue has managed to survive for more than a century in a fast-evolving industry, but past results aren’t a guarantee of future success. For starters, the company will need to convince businesses that its own cloud offerings are cost-effective and superior to what some of the biggest names in tech can offer.

Second, IBM needs the engineers and developers who can actually build those reliable, cutting-edge products that corporate customers want. And therein might lie the rub: According to, which crowdsources salary data from across the tech industry, IBM falls behind its cloud competitors when it comes to software engineer compensation. Check out the chart:

Whenever we’ve used in the past, we’ve generally focused on either entry-level or senior software engineering positions. This time around, we stuck with a slightly more experienced tier (i.e., those with a few years of experience at their respective companies, but who haven’t ascended into the upper levels of team leadership or management). These are the engineers who do much of the coding work behind some of the world’s most popular cloud products, and securing their services is critical if these companies want to succeed in the face of some fierce competition.

What this data shows is that IBM lags well behind its competitors when it comes to salary, bonus, and stock payouts. Even if you disagree with’s bottom-line conclusions (and to be fair, crowdsourcing isn’t the most scientific way of collecting reliable data), its numbers roughly align with what other sites offer, including Glassdoor (which also crowdsources its data). That could put IBM at something of a disadvantage in the war for talent.

In our previous analysis, we also saw that IBM’s senior software engineers don’t make very much in stock and bonuses compared to their biggest rivals. When it comes to some very senior and highly specialized talent (such as A.I. and machine-learning engineers), Big Blue has a history of paying extremely generous salaries—perhaps even millions of dollars—but for many engineers at all experience levels, it seems, rival firms might have more to offer. 

Of course, IBM can still make solid gains in the cloud—but when it comes to this particular battle, it’s the underdog. What it chooses to pay software engineers could make a huge difference in what it brings to the market. Let’s see if this compensation data shifts in the years ahead.