HP’s many announcements in the past weeks led observers to say this was its “IBM” inflexion point – deemphasize consumer tech, get more into enterprise tech. The interesting thing is Cisco and Dell are also going through similar therapy. I keep waiting for Microsoft to make a similar confession.
The funny thing is I see in different ways IBM longing for some of its consumer roots. Lexmark and Lenovo, both IBM spinoffs are doing pretty well. Watson was probably the biggest news maker for IBM this year. Its Smarter Planet commercials are aimed as much on consumers and citizens as their enterprise influencers and budget owners. Its big news in a booming mobile market was its sale of a few patents to Google.
The argument is IBM has shown enterprise revenue to be higher margin, more predictable etc. I would argue the better metric to use if what percentage of revenues comes from products introduced in the last 5 years and Apple, Amazon, Google blow IBM away by the wide margin on that metric. And my next book profiles enterprises in at least 50 industries that are developing “smart” products and services – smart pens, shirts, medical devices, digital citizen services. Somebody forgot to tell them the consumer market is not healthy.
The interesting thing is HP actually has one of the most robust tech supply chains in the industry – in my opinion (and based on research I have in the book) it is more robust than Apple’s. It is more geographically diversified beyond China, it has a better balance of company owned versus outsourced nodes, it handles a far greater variety of SKUs across print, PC/laptop/server and other categories. Apple, of course, trumps it with executives like Jonathan Ive, Scott Fortsall and Tim Cook when it comes to industrial design, retail operations, App Store and other assets.
The biggest contribution Apple has brought to the industry is business model innovation. Its iPad has been untouchable from an economics perspective, but more importantly it has changed music (to allow us to buy singles versus albums), changed mobile markets (made device more important, commoditized carrier service – a dramatic shift), changed book publishing (by challenging Amazon’s $ 9.99 eBook price standard.)
We need more Apple emulation. And Google emulation with its formidable cloud data center network and amazingly green initiatives (another case study in the book). And Amazon emulation with its own cloud data center network and physical and digital supply chain innovations. And Facebook and eBay/PayPal and Zynga and other consumertech innovations.
Back to IBM. It is a classy organization and that deserves emulation on many grounds. But not so much when it comes to technology. Little has been written about the fact that underlying Watson for which it has received so much praise is Apache Hadoop, and that another consumer focused company Yahoo! has been the biggest contributor to that open source tool. IBM launched its Social Business initiative at Lotusphere – Lotus is two decades old technology! IBM first talked about On-Demand computing in 2001 – a decade later we are still waiting for its version of Azure.
And we need to wake up to the fact that IT budgets are not growing and if HP and Cisco and Dell and others fight harder for them, the dollars will have to come from the hides of incumbents like IBM.
So whatever future holds for HP (and Cisco and Dell and Microsoft) here’s wishing them more Apple and Google and Amazon moments.
Interesting post – but honestly: “Lotus is two decades old technology” ? So is “Apple”, “Microsoft”, etc. Sure, the name “Lotus Notes” has been around for >20 years but technology renewed many, many times over. And, IBM Social Business is much broader than Lotus Notes – http://ibm.com/socialbusiness
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Apple definitely has a great track record of innovation in the consumer space. IBM has a similar track record, but have applied it to solutions for the enterprise to help them innovate. The key to that kind of innovation is being open to ideas from all areas (consumers, business, academia, R&D etc) and applying those to YOUR customers. If you continue your research, you will see that by looking at some of the case studies highlighted in Uffe’s link above. For example Cemex is transforming their business using IBM software that is combination of Web 2.0 and IBM Research technology.
What if IBM is so far ahead of the curve, from an idea perspective, that it takes a few years, maybe more, for others and themselves to bring to fruition the ideas?
When Lotus Notes came out it was everything the younger generation wanted. It was sharing of information so the management did not always have that “I’ll tell you if you need to know” attitude. It was also graphical at a time when 3270 terminals were still popular.
Google, Microsoft and Apple are still silo systems and environments. Lotus Notes was never designed with that thinking. Google wants everything in their ecology and while they encourage sharing, they maintain it from within their own programs.
Apple of course has a clamp down on what can or can not go into their universe, thus creating a royalty complex for it’s followers and a silo perspective that is hard to crack.
Microsoft, even with Groove, still is a silo theory. It’s always about the data. Never or rarely about the people and persons. Plus everything either sits ONLY on the MS stack or not.
IBM in contrast has opened up their solutions to include multiple back end databases, multiple operating system support and multiple browser support. Sure they are not 100% across the board on all of these but they try hard to do so.
Apple and Jobs have made a definitive decision to not pursue corporations but pursue the consumers which in turn may or will influence the corporations. Funny thing is Microsoft ruled for a little while with this strategy until the last decade.
Where did Microsoft get that idea from? Why IBM of course. IBM influenced colleges and universities early on, talking pre PC era, and was in a great position, that is until they stopped and Microsoft then started the same path.
So Lotus Notes is 20 years old, my 62 Corvette when I owned it was already 35 years old and one can still go out and buy the 2011 edition of a Corvette. Likewise with Lotus Notes and Domino. If it was such a bad product, it would have been put out to pasture by it’s owners, like Pintos and Chevettes. But that is not the case. An application and messaging platform that can do so much with such little effort on the developers side. The NoSQL idea is exactly the Domino storage theory. What works and is tried and true survives what does not.
No too mention the other IBM brands are innovating every day. WebSphere and Rational keep pushing out new tools, technology, middle-ware, etc. All of our WebSphere products are based on open standards and even integrate well with the competition and other systems. Take WebSphere Commerce for example, it pretty much integrates with all kinds of back-ends and pretty much all companies do in fact integrate with other systems at some point.
” Lotus is two decades old technology”. Exactly. Applications that I wrote back in 1995/96 for the Notes 4.6 platform are still in production today, running on version 8.5 with no problems.
Sure, the design might look a little bit dated today, but honestly, what website from 1996 would look cool today? It would be a quick job to update the look of those old applications, just open them in the Designer and spiff them up. But the functionality is there, and that is what corporations asks for.
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