(Note: After an award-winning career in the media business covering the tech industry, Bob Evans was VP of Strategic Communications at SAP in 2011, and Chief Communications Officer at Oracle from 2012 to 2016. He now runs his own firm, Evans Strategic Communications LLC.)
Over the past couple of years, IBM has pulled off a remarkable achievement by simultaneously getting smaller, smarter, faster and—most important of all—more relevant.
At the center of that transformation has been IBM’s decisive and bold pivot to the cloud, enhanced by its Watson-led cognitive capabilities and its rich history of industry expertise.
Perhaps most remarkable about the big changes at Big Blue has been CEO Ginni Rometty’s overhaul of the IBM culture, which for decades was dominated by huge and profitable standalone business units—mainframes and professional services, for example—that were often more interested in account control than in delivering the most complete and comprehensive business outcomes for customers.
The cloud transformation at IBM has seen those siloed fiefdoms largely give way to a more richly integrated blending of capabilities—increasingly centered on a cloud-first and data-first strategy—from across the company to exploit all of IBM’s vast array of technologies, industry expertise, and relationships.
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Yes, of course, IBM has a long road ahead of it as it continues to balance its legacy businesses with its “strategic” business segments (cloud, analytics, mobile, and security) and optimizes the deployment of its people to align more effectively with the rapidly changing global business environment its customers face.
And yes, of course, the competition in what I call the Cloud Wars will only intensify as companies continue to embrace cloud technology as the faster route to business innovation, to more-intimate engagement with customers and employees, and to higher-value returns on their IT spending.
But I’m a big believer in IBM’s current position and its future direction and opportunities because Rometty is not hedging her bets about whether the good old days will come back, she’s not playing around the edges with the cloud in case it just happens to catch fire, and she’s been unfailingly resolute in pushing the company into the future its customers demand.
And, from IBM’s Q1 earnings call, here are 10 reasons behind my assessment of IBM, which I’ve ranked at #5 on my Cloud Wars Top 10 list:
- For the past 12 months—not as a forward-looking annualized run rate—IBM’s cloud revenue was $14.5 billion, CFO Martin Schroeter said on the call. That’s a huge base to build on, and one that will inspire confidence about IBM’s cloud strategy among customers, prospects, employees, investors, and partners.
- Q1 cloud revenue was up 35%.
- IBM’s gone “cloud-plus” with an approach that inseparably intertwines two other strategic capabilities with its cloud business. On the call, Schroeter said IBM has come to realize that to succeed in the enterprise market and help customers solve big-time business problems, IBM must “bring together cognitive solutions on cloud platforms to create industry-specific solutions.” No one else is doing that at IBM’s level, although Microsoft--#1 on the Cloud Wars Top 10 list—is getting close.
- IBM’s “cloud as a service” business has enjoyed big success across three prominent industries: it’s used by 10 of the 10 largest global banks, 9 of the world’s top 10 retailers, and 8 of the world’s top 10 airlines, Schroeter said.
- IBM has embraced a “data-first” approach to its cloud solutions, mapping precisely to the rapidly escalating focus that businesses across every industry are placing on data as they look to become more capable in the digital-business environment.
- Innovative customer engagement with Visa: in partnership with the credit-card company, IBM is using Watson IoT to enable cars, appliances and other connected devices to become potential points of sale.
- Innovative customer engagement with Samsung: IBM’s Weather Channel subsidiary has been picked by Samsung as the default weather app for its mobile devices, meaning “tens of millions” of people will engage with that IBM app during 2017.
- Innovative customer engagement with H&R Block: Watson and the IBM Cloud capabilities are now embedded within 10,000 H&R Block branches, which IBM says has enabled 9 million tax-filers to get new levels of expertise from Block’s Watson-enhanced tax professionals.
- The AI partnership with Salesforce.com: as Salesforce CEO Marc Benioff tweeted when the deal was announced in March, “Great to be with my new bff @ibm CEO @GinniRometty at @IBMInterConnect in Las Vegas! Bringing Salesforce Einstein CRM and Watson together!”
- IBM’s aggressive push into new technologies—not only AI and Machine Learning with Watson, but also Blockchain: IBM said it started 40 new blockchain engagements with customers in Q1, adding to its total of more than 400. Those customers include global transport giant Maersk, which will use it to remake its global supply chain; Northern Trust, which will use it for its private-equity business; and the Food & Drug Administration, which will explore how blockchain can benefit public health.
On top of these achievements, IBM’s got lots more good things cooking, and I expect we’ll be seeing a string of impressive announcements from it throughout the year.
