The Next Growth Strategy for IBM

March 11th, 2009 Posted in Business Growth Strategies

In a March 9, 2009 article entitled “IBM chief upbeat on growth potential”, Kevin White writes about IBM’s optimism that it can parlay its 8 million square feet of data center resources into a virtualized, cloud based computing infrastructure that dynamically manages business services. “In an upbeat letter to shareholders, chairman and CEO Sam Palmisano outlined how the company would develop smart, digitally aware, networked and intelligent systems with pervasive instrumentation and interconnection, as well as build out cloud computing services. ”

IBM’s Willy Chiu, VP for IBM’s Cloud Labs described how the company is working to be able to string them all together through virtualisation and cloud-based provisioning so as to be able to dynamically manage business services. “Ultimately, it’s all about changing the economics of enterprise computing. It’s all about boosting efficiency. And it’s about doing more with less.”

Before Twitter, before Google, before Microsoft there was IBM. The gold standard of corporate excellence was a proud organization and the “men of IBM” wore blue suits with white ties. IBM stood for reliability and innovation. It was the “go to” equipment choice – don’t bother considering the alternatives.

But dominance led to complacency and IBM lost its way. This loss of prestige and power was personified by its inability to understand young Bill Gates who clearly outmaneuvered IBM in Microsoft’s early days. Since then, the proudest of U.S. corporations has been quiet for a long time. Its biggest news was its 2004 $1.75B sale of its PC business to the Lenovo Group. IBM once dominated this business but failed to keep pace with Dell and Hewlett Packard.

Can IBM rise once more and be king? Stay tuned.

–Art Jacoby

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