IBM’s New Four Pillars

Rob Enderle

IBM, for most of the time I’ve known and worked for the company, was defined by three pillars: hardware, software and services. For much of the last decade, IBM was flipping the priority to put software first, but those three pillars largely defined the company. Well, at IBM Interconnect last week, I really got the sense that IBM has fundamentally changed. It has pivoted from a focus on the core software, hardware and services tools to a very different and evolved tool set of cloud, blockchain, quantum computing and cognitive computing, with this last being the most powerful and inclusive. And I see another differentiator. While software, hardware and services were largely distinct practices and siloed IBM, none of these new pillars are exclusive; in fact, they are actually better as a blend, and one of them, quantum computing, is just being born.

This is a very different IBM and I think we should chat about that.

Almost Everyone Is Different

It strikes me that there has been a massive amount of change in the last few years. Dell is now a vastly larger company and arguably the most powerful after the EMC acquisition. HP went the other way and is now two very different firms. Lenovo has as much “old IBM” in it as it does “old Lenovo,” making it the only firm managed from the U.S. and China. And I’ve already pointed out IBM’s changes.

This suggests that we should be reevaluating our impressions of each company, depending on what we want to do and where we want to go. Given that all of these firms have changed, it might be time to figure out if those changes are in the right or wrong direction to where we need them to be and adjust our vendor mix accordingly. But, I expect, few will do that because we tend to lock in on an impression of a vendor and, unless that vendor fails, don’t adjust for reality. All vendors change and if we don’t change our perceptions in line with those real changes, we are likely to make decisions, for or against, that we’ll regret.

This is to point out that it isn’t just IBM that has changed and to point out that the world that existed last decade, with regard to these large vendors, doesn’t exist anymore.

IBM’s Pillars

IBM has done an impressive job reinventing itself, through acquisition and internal structural changes. The SoftLayer acquisition stands out as one of the most successful because, up until then, IBM really wasn’t a cloud player. Post-acquisition, it is now one of the most powerful in the enterprise-focused space.

Blockchain is already massively changing banking and how we effectively validate vendors and users. This is likely one of the most amazing transitions because it came from Bitcoin, and financial institutions seemed to want nothing to do with it, at least initially.


Quantum computing is IBM’s Hail Mary. It is currently the only vendor at its scale working to bring quantum computing to market and it is a long path. But given the performance and security benefits this technology potentially has, if it’s successful, this could be more disruptive than cloud.

Cognitive computing is the firm’s biggest short-term bet. This goes well beyond Watson and embraces what used to be OpenPower. IBM has clearly recognized that the value in analytics is in the result, not just in the data. Being seen as the leader in providing actionable information to executives without the need for data scientist intermediaries should be a massive competitive advantage at scale. In execution, this often pulls all of the elements of the company together and, if used internally, it could make IBM again into the most successful IT company in the world.

Wrapping Up: IBM’s Fundamental Shift

The enterprise technology market is vastly changed this decade, with virtually every enterprise technology company looking very little like it did last decade. IBM is perhaps the most different inside, moving from its old hardware, software and services base to a focus on cloud, blockchain, quantum computing and cognitive computing. This is a fundamental shift from tools to solutions, from being defined by what you build to what problems you solve, and from being a legacy company to being a firm focused more on the future than the past. Now I think that is a fascinating change.

 

Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm.  With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+


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