IBM at a 100

IBM was born as a hardware products company that dominated its markets from the beginning in part through smart mergers and acquisitions that combined technology from multiple sources with a strong focus on customer needs - sounds familiar? Its...

Share

IBM was born as a hardware products company that dominated its markets from the beginning in part through smart mergers and acquisitions that combined technology from multiple sources with a strong focus on customer needs - sounds familiar?

Its early technology offerings included weighing scales, coffee grinders, meat slicing machines and time keeping devices, alongside of course the more famous punched-card tabulating equipment that took it in the computing business; IBM has historically boasted a diverse portfolio of offerings.

It's easy to forget that IBM led the first disruptive wave of IT change in the 1960s, introducing the legendary S/360 mainframe range that without exaggeration laid the foundations of modern IT architecture through the separation of hardware, system software and application software.

Its historic "unbundling" of IT services from hardware and software sales laid the foundations of the modern IT services industry. Even as late as the 1990s, young sales people being trained at rival suppliers would be told that "IBM's not the competitor; it's the environment".

Bottom line for ICT buyers:

1. IBM may be 100 years old and somewhat bureaucratic on occasions (to put it mildly), but its great strength is its continuous commitment to invention - it doesn't rest on its laurels. What's easy to forget is how much of today's core information technology

IBM has invented - from Fortran to magnetic storage, DRAM, RISC, and even relational databases. Its count of 6,000 patents awarded in 2010, for example, was greater than the combined total of Microsoft, HP, Oracle, EMC and Google.

Six IBM employees have won the Nobel Prize. How many Nobel laureates won this prize while working for Microsoft, HP, Oracle, EMC, Google or indeed Accenture?

Whether it pushed disruptive technology it invented out to its customer base fast enough was quite another matter, however.

It was too often late to market with its own technology, and Oracle and Sun - to name just two - got their big break commercialising technology that IBM had invented but failed to exploit quickly.

2. IBM led the First Wave of change in the 1960s and 1970s - the introduction of mainframes, the unbundling of services, and the arrival of proprietary mid-range servers. It then survived (although it was a pretty close shave) the Second Wave of change in the late 1980s and early 1990s - the shift to client/server architecture, PCs and "open" industry standards.

It has so far done a good-enough job of riding the current Third Wave of internet and web-driven change. In each of these disruptive historic changes, IBM guided its customers through the woods (after a few diversions, it has to be said) while key competitors fell by the wayside and even died off (remember Wang, or Honeywell?).

That successful absorption of disruptive change represented a huge protection of investment for IBM's customers, even if they had to go elsewhere to get the really leading-edge stuff. Young IT professionals being trained in IT departments used to be told: "Nobody ever got sacked for buying IBM".

3. Now we face a massive Fourth Wave of change, driven by cloud computing. Can IBM ride this wave as it rode the previous? Will you get sacked in future just for buying IBM?

Overall, we think the answers to these questions will be "yes" and "no" respectively, although the road ahead will be bumpy at times for IBM and its customers alike. IBM will have to change radically, but we think it's capable of doing so. And assuming that there is a significant consolidation of today's IT outsourcers, IBM is likely to be one of a small handful (HP also comes to mind, of course) likely to survive the cull and take its customers forward once again.

Posted by Douglas Hayward

Find your next job with computerworld UK jobs