IBM Enterprise 2013: The Apple vs. IBM Approach to Products

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    At the IBM Enterprise 2013 conference, one of the more interesting discussions came at a round table at the end of day one. The question had to do with the number of different platforms IBM has. They appear to overlap, including the major branded platforms of Pure, Power and Z. The response got me thinking about how vendors often approach problems. Basically, there are two product-based approaches to a market. Apple has driven one exclusively: Create a few tools and drive customers to them. The other approach, represented by vendors like IBM and HP, is to build a lot of products with the belief that customers will find the right tool they need for a project.

    Both approaches have advantages. Apple’s approach, though, has proven difficult to execute without talent that doesn’t seem to gravitate to this market segment. That’s why Steve Jobs’ Apple stands as unique and more highly valued, even against the Apple of today.

    Advantages and Disadvantages of Few Products

    The advantages of few products come down to simplicity at both ends. The solution has far less complexity and that means that, typically, fewer things can go wrong, less cost is associated with training on the product and, as Apple demonstrated, when done right it can produce amazing profit margins. However, a limited line means it is far harder to match the product to the task and that means the task has to be forced more often to conform to the product.

    If you have an incredibly persuasive sales force (Oracle) or incredibly persuasive spokesman (Steve Jobs), this approach can certainly work, but it puts a lot of pressure on the organization to conform to the products that the limited vendor supplies. The end result may be simpler, and I say may because often complexity results at the business interface level as the round hole is reengineered to fit the vendor’s square peg. Actually, think of this as more like a Swiss Army knife: It will do more things but focused tools will generally do them better.

    Advantages and Disadvantages of Many Products

    Much like the difference between a Swiss Army knife and a mechanic’s tool kit, the advantage of having a full set of products means you are more likely to have one that best fits what the customer wants to do. This means the tools can more easily be implemented without changing the business or business process. However, the end result, by nature, is going to be more complex because you are using a variety of very different things to solve the same problem. But because these tools individually don’t need to be modified as much, the chance that someone who knows the tool set can come in and maintain the result is higher. Even though it is complex, it is less customized.

    Where Each Approach Works Best

    The simpler the problem and the less you know of it, the more likely the simple tool will work. Best is where the vendor defines the problem, which is what Apple did with the iPod, iPhone and iPad. Apple marketed the problem, then provided the tool to fix it. Consumer facing, very simple, and vendor defined.

    But if you understand the problem, the problem is complex (like most IT projects are), and you want to minimize the impact on the business, then a complex set of products will likely work better if they are sold by people who can both understand your problem and won’t force a solution. This last is important. Some companies employ focused sales people who don’t sell the entire line, only a subset of it. Those folks will attempt to sell a tool and try to force it to fit a situation where it doesn’t really fit. They won’t have the experience of a limited product company and this can end very badly.

    Wrapping Up: Keeping Customers Satisfied

    So Apple was successful with consumers but not IT, because it lacked Oracle’s sales force and the limited product approach wouldn’t scale to IT. However, Amazon Web Services is trying a very similar approach. Web services as a class is an incredibly flexible solution that is already becoming very disruptive in this segment. It is less forced than Oracle but, at least so far, it isn’t throwing off the same amount of profit, either.

    IBM’s multi-product approach has historically been far more successful here but only by evolving with the market, which it almost lost in the 1990s. You have to aggressively revisit the tool set, adding and subtracting as customer needs change. Product managers often fight aggressively to hold on to their products, making it far easier to acquire than to divest a particular product or tool.

    At its events, IBM typically showcases more satisfied customers than any peer vendor and that certainly suggests that IBM’s approach remains, for now, the best in this enterprise market. Its biggest risk, now as before, is less from a known competitor and more from a disruptive challenger like Amazon. In the end, IBM most benefits from the smartest of customers and as long as that condition remains, it will continue successfully.

    Rob Enderle
    Rob Enderle
    As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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