IBM: Getting Smarter

Rob Enderle

I'm at the annual analyst meeting for IBM's STG organization this week. The core message is its smarter computing initiative and there are some things about this IBM initiative that stand out for me. One is that IBM is actually using itself as a test bed for this concept and it is arguing that the concept has had a massive positive impact on the company's bottom line. The other thing that stood out is that the concept behind the Smarter Planet initiative is, well, smart.


Let me explain.

Not Your Grandfather's IBM

One of the things about the old IBM - the IBM that existed in the '80s and up to the early 2000s - was it talked the talk but didn't walk the walk. Or, in other words, it didn't use what it sold. Like the cobbler's children, the technology that ran the company was ancient and not at all reflective of what IBM was doing for other firms. The end result was that while IBM was able to sell, it didn't really believe operationally in its solution and that conflicted the company and made it less efficient than it otherwise would have been. It was also hard to explain that if IBM's systems were as good as IBM said they were, in terms of cost savings, why didn't IBM use them internally?

This changed last decade under Sam Palmisano, who, unlike his predecessor Louis Gerstner, came from inside IBM and recognized that IBM needed to exemplify what it sold, and by so doing would not only understand the shortcomings of its solutions better, and address them over time, but the very real improvements would also benefit IBM's bottom line. Under Palmisano, IBM's performance strengthened significantly and it ended its first century of existence at the top of its game as a result. IBM's new CEO, Virginia Rometty, who has been handpicked to take this concept to the next step, even her selection highlights this "smart" approach.


What I find particularly interesting is that somewhere in the middle of this process, IBM realized that the way it looked at technology internally was outdated and thus the way it sold technology was equally outdated. The traditional way of selling hardware and software was on the benefits of the individual component and that was the way it was managed. Silos of products were sold outside and they were managed as silos inside, but this caused both internal purchases and external sales to be about throwing technology and hoping it hit problems. Or, if this were tools, the screwdriver guy would pitch screwdrivers to fix stuff, the hammer guy would pitch hammers, and the pliers guy would pitch pliers, but none of the tools were matched well to even simple problems, let alone complex issues. And we are in a world of complex issues.

Smarter forced IBM to rethink internally and externally. It is a much more complex process where much of the time is spent defining what needs to be done. Then from the problem a solution is crafted and optimized to best match a blended set of products including servers, software, systems management, storage, networking and often includes third-party offerings into something that is uniquely created to both increase efficiency and lower costs.

This has forced organizational changes inside IBM and, as you would expect, there is still some ongoing resistance to these changes, but the end result was the "smarter" initiative, which has to do with buying more intelligently rather than just buying more. Now, the solution, rather than just server software, reports up through STG, which is no longer a product division; it is a smarter division and maybe the "s" should mean "smarter" rather than "systems" now. In effect, the Systems and Technology Group is becoming the Smarter Technology Group and I think that is a good thing.

Wrapping Up: Smarter?

It is funny but I look back at my years in technology and how often problems were addressed by simply adding another server, software tool, storage device or additional network capability. This simple approach to problem solving generally resulted in a mess of mismatched products that almost always underperformed customer expectations, used more labor than we had and collectively were unreliable. If we had just stopped to take a breath and to develop a long-range plan, we could have done far more with far less and the end result would have been far better. This wasn't a technology problem - like the old joke about the kid who walked his bicycle to school because he didn't have time to get on - we just didn't have the time to plan, or to step back from the Frankenstein monster we were building to consider something more elegant.

Whether you buy into IBM's Smarter Planet initiative or not, now is a good time to step back and address the mess that has been created and consider IT an art. The parts then drop in importance against what they do as a system and how well they will match current and future needs. IBM showcased account after account and, even more important, its own financial success, which has come out of this approach and I think it is time that we all get on board and become more intelligent. Or, in other words, contribute more strongly to a smarter planet starting with ourselves.

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