Business Management

IBM Needs to Show Elephants Can Dance in the Cloud

Over the 25 years or so I have watched the company, perceptions of IBM have swung from ‘bloated dinosaur of the mainframe era’ to ‘successful reinvention of computing’s grand marque and software and services comeback kid’ to ‘grey eminence of the digital age, buoyed by efficient R&D’. Today, Big Blue has another challenge on its hands as it wrestles with the ramifications of cloud computing.

You know a phenomenon is mainstream when it is referenced in the lead story of the Financial Times and the Pink ‘Un today splashed on IBM, saying it needs to recalibrate for the cloud after missing analyst estimates by a mile and seeing a 4% year-on-year revenue decline. The company statement wiped 7% off the company’s shares in the aftermath and sent a shiver down the backbone of other enterprise tech bellwethers.

IBM CEO Ginni Rometty blamed “a marked slowdown in client buying behaviour” and “unprecedented pace of change” in the industry. Well, up to a point, Lord Copper.

Rometty pointed to cloud computing and mobility as areas for IBM to address but that “unprecedented change” that she referred to tends to hurt incumbents and encourage disruptors. The point is this: IBM’s trump card remains in the datacentre where it still makes fortunes selling ‘big iron’ systems and the services and software that make them valuable. Cloud platforms are a land-grab and while IBM’s acquisition of SoftLayer was prescient it still appears to be a large company serving other large companies while Amazon, Google and Microsoft manoeuvre themselves for the next giants, skating to where the puck is going. 

Also, that word “unprecedented”. A former CEO, Lou Gerstner, famously reconfigured IBM for the client/server age, making IBM a powerful force again in cross-platform software, PCs, commodity servers and outsourcing. He became famous for proving that “elephants can dance”: that big companies can manage surprisingly modest turning circles. This is the challenge today for Rometty, making a new IBM that has a convincing cloud/mobile/BYOD story for new companies and old companies making themselves over.

It’s going to need another turnaround story but the challenge is not as scary as that which IBM undertook 20-plus years ago.


Martin Veitch is Editorial Director at IDG Connect


« Top Tips: Protect Yourself From Poodle


Why Apple TouchID Is Core to Bringing 'People-Centric' Experiences to the Enterprise »
Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

  • twt
  • twt
  • Mail


Do you think your smartphone is making you a workaholic?