IBM and Dynamic Transformation

By Charles King, Pund-IT, Inc.  November 18, 2015

One of the IT industry’s most enduring qualities is its continual evolution. You see it everywhere, really, in elemental technologies, products and services, marketplace strategies, end user behavior, and customer response. But evolution isn’t evenly distributed or embraced, particularly among technology vendors. In fact, the opposite is usually the case, especially among those who have been talented and lucky enough to develop a leadership position or competitive edge.

Those kinds of vendors often attempt to bend markets to their will and force customers to consider the world through peculiarly tinted glasses. That works pretty well sometimes but not always. In the worst situations, decreasingly relevant vendors proclaim their unique value every more loudly and dissonantly. It can be both tired and tragic, a bit like watching a once respected person fall victim to self-indulgence and become an embarrassment to family and friends.

But there is an entirely opposite form of dynamic evolution among vendors that recognize market shifts and changes among their core customers, and determine not to be left behind. Those character traits were on full display las week at IBM’s annual analyst forum in Stamford, Connecticut.

Shifting course to cognitive

The event was the first analyst forum the company has hosted since the major reorganization it launched early this year. At that point, IBM’s longstanding tripartite software, hardware and services divisions were reordered into groups focused on cloud computing, systems, analytics and big data, the Watson cognitive platform, mobility, security and research.

But there have also been a host of additional complementary efforts since then, including an intense focus on “cognitive computing,” emphasis on the important role that IBM Design plays in product development, the launch of a standalone Watson Health business, strategic partnerships with Apple and Twitter, and intriguing acquisitions, like the recent purchase of assets from The Weather Company.

In other words, the company had a lot to talk about with the analysts who gathered in Stamford last week. Interestingly, the big tent sessions focused largely on clarifying IBM’s strategies around cognitive computing and defining what the company’s value proposition in that regard. Watson plays an understandably major role in IBM’s cognitive efforts—understandably because virtually no other vendor has developed a platform or technology with Watson’s breadth and depth which are critical for its application to enterprise-class problems.

But cognitive computing as a discipline extends well beyond Watson so along with Watson SVP Mike Rhodin, there were also presentations by Bridget van Kralingen, SVP of IBM Global Business Services and Inhi Cho Suh, VP of Strategy and Business Development for IBM Analytics. IBM’s cloud computing efforts were also high on the list of big tent subject matter, with a collaborative presentation by Robert LeBlanc, SVP of IBM Cloud and Tom Rosamilia, SVP of IBM Systems.

The changing role of hardware

The second day mainly consisted of the deep dive sessions on specific technologies that are common at analyst events. One I found especially compelling was Data in a Cognitive Computing World hosted by Doug Balog, GM of IBM Power Systems and Michael Kuhn, VP of Enterprise Storage. The premise of their presentations was fairly common – that the need to glean business value from massively growing rafts of information requires systems designed for sophisticated analytics and complementary storage solutions.

But as Balog noted, IBM has a strong story to tell around Power Systems in terms of both performance and value. Similar to the strategies it pursued with its System Z mainframe solutions, the company has become far more flexible in terms of pricing and software licensing for Power Systems, and has increased its investments in Linux-based solutions.

In addition, IBM’s decision to open source the POWER processor architecture (via the OpenPOWER Foundation) is unlike anything other vendors are doing. The Foundation’s 160+ members suggest the overall energy and optimism around effort. Add in the core value that Power supplies to IBM’s Watson platform, and the future for Power Systems looks very bright.

Kuhn shared some interesting points in his IBM Storage presentation. He noted that the company has established a leadership position in the hot all-Flash storage solutions market, facilitated by its 2013 acquisition of Texas Memory Systems. But he also noted that the company is expanding its portfolio by selling storage software-only solutions and cloud services enhanced by specific storage capabilities.

Those seem like viable and necessary efforts. Like other storage vendors, IBM’s traditional solutions are increasingly under pressure from public cloud players like AWS so making progress in dynamic markets for flash, storage software and hybrid cloud should provide needed revenues.

Final analysis

As he has done many times in the past, IBM’s EVP of Software and Systems Steve Mills provided both opening and closing remarks for this year’s Analyst Forum. Mills is one of the industry’s rock star executives – a educated, experienced, widely read individual who can be both funny and philosophical (often simultaneously) and isn’t afraid to shoot “from the lip” when the situation requires it.

Occasionally, Mills boiled down points made by other executives to their essence. For example, Mike Rhodin commented, “Watson came from IBM taking a Manhattan Project like approach to solving deep Q&A but people thought it was magic.” For Mills, “Watson arose from a little serendipity and a lot of hard work.” He is also comfortable with putting a match to competitors’ most deeply held beliefs (and delusions): “For Oracle, customer satisfaction is easy – if they’re paying us, they must be satisfied.”

On a more serious turn, Mills made one of the more profound statements that I heard at the forum, that “At IBM, I’ve lived with nothing but transition. The opposite of that are those who believe they have achieved perfection.” In a way, that point underscored the importance and value of this current IBM transformation, along with all the many transformations that came before it.

Time moves. Circumstances change. Things evolve. Fundamentally understanding and effectively embracing these points can help individuals find wisdom and organizations achieve longevity. How and how well IBM’s current efforts succeed is an open question but last week’s analyst forum in Stamford provided clear evidence of the company’s continuing, dynamic transformation.

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