Saturday, April 20, 2024

How IBM has Changed to Become What It Once Was

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Think is IBM’s big annual conference, and again this year, it was digital. I’m noticing a sharp quality difference in shows like this where firms have a studio vs. those that don’t. Both IBM and Microsoft have TV studios, and their event quality appears significantly better than most that don’t. But the other thing that struck me was just how much IBM has changed since I worked there.  

As I listened to Arvind Krishna, IBM’s relatively new CEO, I was struck by how much IBM was becoming a new company with elements returning to the firm’s policy and strategy. IBM was once and appears to be again a company whose critical assets are its employees, customers and partners. Their business model is also shifting back to a services model from a hardware, or software, sales model, and I think this bodes well for the company and its customers.  

Let’s talk about change this week, because as we approach what many of us call the 4th Industrial Revolution, most companies will experience changes not too dissimilar to IBM’s.  

The old IBM

The IBM I grew up with and worked for used a lock-in strategy, and, for most of its life, before I joined, it did lock-in right. This practice had taken a turn by the time I joined.  

Lock-in done right is like a tight family where the customer and the vendor are tied at the hip. The relationship is services based, and the focus is on assuring the customer’s success. This policy/strategy led to the phrase “nobody ever lost their job choosing IBM.” But, and this is a problem with both lock-in and market dominance, when the market growth stalled, IBM’s then-executive team figured out that moving from a service to a sales model, they could spike revenue. IBM initially leased rather than sold, which was very close to the as-a-service (aaS) wave now. But, in doing so, they shifted focus from assuring customer success to tapping the trust they had built up to push hardware.  

IBM’s transition has been difficult at times, but it does appear to leave the company in a far better place today.

See more: Dell APEX: Our Path Back To The Old IBM Service Model

The new IBM

The new IBM is shifting back to a services model with an as-a-service emphasis and without the earlier lock-in misstep. Much like Microsoft shifted from being insular and focused on preventing interoperability and then shifted to become an interoperability leader, IBM has shifted from their revenue focus.  

Where this was most apparent was when Krishna brought various customers onto his digital stage.  Instead of getting them to pitch IBM hardware, they collectively spoke about the customer’s needs and the solutions jointly created between IBM and that customer, often focused on building a better solution for the people the customer serves.     

It wasn’t about showcasing an individual product or service, but instead, the ability of IBM to engage with customers to define a solution and assure it was successful. This assurance of the result made the on-stage conversations with the executives more attractive. Instead of appearing inserted to pitch an IBM product, they seemed to appreciate the deep relationship they had forged with IBM. The IBM of today is focused on giving you a choice and assuring that theirs is the best choice on the table: by better focusing on the customers’ needs and doing a better job matching those needs to a custom solution and a long-term relationship assuring the outcome of the effort.  

Solutions like Watson Orchestrate are increasingly focused on helping employees navigate the complexities of their organizations, automating key processes and simplifying everyday tasks. It is a force multiplier for the employee, and several examples were provided on how it simplifies and automates tasks like sales proposals.  

Siemens spoke about how IBM was instrumental in helping them create a new hybrid cloud solution.  CVS spoke about how IBM helped them field an AI solution that helped internal decisions and another that resulted in automated intelligent agents that can more effectively, and affordably, assist CVS customers at scale, while improving customer satisfaction and loyalty. SalesForce worked with IBM to bridge SalesForce’s data silos and implement a chatbot called Einstein that has been successful. Usage was up a whopping 706% this year, and SalesForce said their customers prefer the ability to fix their problems rapidly.  

Wrapping up

Thomas Watson Jr. was IBM’s Bill Gates, and one thing he said that has stuck with me was “be willing to change everything but who you are.”  

Although IBM seemed to sometimes forget that in the 1980s, it is alive and well in the new IBM, as demonstrated at Think. 

It is fascinating to see IBM bending the best of their core self with the best of today’s hybrid-cloud world into something far more compelling than they were a few decades ago when I worked there. 

See more: IBM Begins Cloud Confidentiality Push

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