IBM – Is the Elephant going to dance again?

Following a long week of meetings, you know the kind when you feel you’ve seen more receptions and boardrooms than your own office, I finally caught up with our founder, Daniel Thomas.

I had been thinking about social media and how few businesses, even born in the cloud business, seem to understand how to use it effectively. Dan raised the debate, suggesting it was a deeper issue that showed how little businesses understood customers or how the provision of service fit with demand and real world use.

“I would blog about any vendor that is consciously making an effort to engage with customers,” he said. “I would name and praise them if I could find a vendor that was meaningfully talking to the customer. Real dialogue would help develop and support the MSP and cloud provider market.”

Reversing my typical response I asked Dan, “All right, who is doing something right?” What followed was an 8-year walk through the cloud marketplace – from early growth to rapid maturity. And one name came up more than most and that was IBM. The marketplace is experiencing a lot of change and there is still, as the tech giants battle it out, a lot to play for. As competition increases it is worth taking a minute to share Dan’s unique perspective.

Is the Elephant going to dance again?

In the last eight years I have watched IBM change. This transformation recalls former CEO Louis V. Gerstner’s great book, “Who Says Elephants Can’t Dance?: How I Turned Around IBM”. The book also has one of my favourite quotes ever, “Politicians, I sack politicians.”

When Gerstener took over IBM in 1993 shares had slumped and Big Blue was facing certain collapse. He transformed the company into a major force. Now, following the sale of System X (the Intel Server Division) to Lenovo, the addition of SoftLayer and other important software acquisitions, IBM is shifting again, strategically. The shift is being fuelled by innovation, innovation for the most part in the cloud.

So with these changes, can the elephant dance again? I think so.

Consider the cloud marketplace today. Three names come up time and again: Amazon with AWS, Microsoft’s Azure and, of course, Google. When we think of the cloud, broadly, it is often as an infrastructure for everything we say is cloud. But is it? Cloud computing is an umbrella term that covers a range of services from software to storage, virtualisation, data aggregation and even communications. There is a lot more to the cloud and the market demonstrates this.

One of the biggest growth areas is that of the mid-market. The mid-market is services provided for 1,000 users or less. Yes it sounds small but to get hung up on size undervalues its importance.

The mid-market are the enterprises of the future, the next global success stories. This is also a very influential group. Below the 1,000-user threshold you find early adopters, business optimisers and innovators all using the new cloud-connected tools to improve the processes and productivity that drives business forward.

While IBM as a brand is huge, as those in marketing reading this will certainly agree, they are helping businesses innovate; and are doing so on a one-to-one basis. Just tweet @simonlporter and @davidjkay – beneath the headlines you’ll find a pair of IBMers with a passion for all things cloud. The cloud is a very social platform and you’ll find, as I did, that good advice is often only 140 characters away.

With big names brand association is important, and hard not to ignore. Brand instils confidence and develops trust. But the service delivered is important. The longevity of a tech giant counts for little if the services don’t fit and are too expensive. Everyone wants continuity, especially in the fast moving world of IT, but businesses must justify the expenditure. Value for money used to imply higher prices but that assumption no longer holds true. You shouldn’t be surprised to find IBM’s pricing is reasonable – the cloud is a great leveller.

The mid-market may not spend big but their ambitions are no less than those large enterprises the tech giants serve. Being small does not exclude thinking big. And being big doesn’t mean sticking the mid-market with a ‘one-size-fits’ set of services. Business development today is about partnering small.

Looking over their shoulders Amazon, Microsoft and Google have made important acquisitions. But as they war with storage and productivity suites innovation is introducing competition. IBM’s introduction of Watson Analytics is proof.

Bringing Big Data to businesses Watson Analytics is a natural language-based cloud application that provides powerful, predictive and visual analytic tools for businesses. Users need only to ask questions to get results in terms familiar to their business. Patterns, relationships are visualised.

But Watson Analytics isn’t all that Big Blue has been working on. Look at the recently announced partnership with Apple. Both companies stand to change the enterprise market in ways no one has really witnessed.

Coming soon will be a new class of industry-specific enterprise solutions developed for the iPhone and iPad. Better still will be IBM cloud services optimised for iOS, including device management, security, analytics and mobile integration. IBM has been making it easier to leverage the cloud.

Working with service providers, MSPs and ISVs within traditional IT distribution channels IBM is creating new tools and applications with greater cloud integration. These tools are helping the mid-market. As IBM refines its relationships, just as it has reinvented itself over the years, this big company is becoming more relevant to smaller businesses.

My belief is that the elephant is just mid-Viennese Waltz. IBM is catching its breath while getting ready to really boogie.

Originally published 18 September 2014, 10:00 GMT

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