IBM is a very old, ancient company, which was founded back in 1889 and got incorporated 22 years later, at least when compared to Apple or Microsoft. Even though IBM’s said to be the worlds’ largest IT employer, its revenue has fallen behind Hewlett-Packard’s since 2006, but interestingly it has still managed to remain the most profitable IT company ever.
On the 18th of October 2010, IBM and Apple reported their quarterly results, and IBMs’ total profit was surpassed by Apple. According to Steve Lohr, a journalist at The New York Times, “The two companies have long been cast as polar opposites, even before Apple’s commercial during the 1984, Super Bowl that depicted a female rebel (Apple) striking a blow against a corporate Big Brother (IBM).”
IBM and Apple are like the yin and the yang of high-tech innovations having way more in common then the general understanding. IBM today, is seen as a not just as a machine but a steady company with five-year profit plans, that caters to the government and big corporate customers. IBM’s profit for the third quarter in 2010 rose by 12%, meaning the company delivered higher earnings for the 31st consecutive quarter. Apple however, is seen as a consumer-product hit company that is totally on a roll.
According to Steve Lohr, “There is a lot of eureka invention and deep science in IBM’s varied businesses, industry experts say. And Apple’s continuing success, they add, is explained in good part by its ability to make innovation a managed system, more machine-like.”
According to David B. Yoffie , a professor at the Harvard Business School, IBM and apple cater to completely different markets, but, amusingly have similar strategies. According to him, “The big shift at IBM, he notes, came about 15 years ago, when the company tilted increasingly toward technology services and software and relied less on hardware.” The company changed their strategy in an attempt to build profitable business, with persistent revenue, based on service license and service contracts, in an attempt to further be a magnet for software developers and industry partners to make use of their technology.
Since the last 10 years, Apple has also somewhat embraced the same strategy, only slightly broader in approach. According to Mr. Yoffie, “Each company has created an ecosystem of partners and developers around its core products, and both depend on ongoing innovations.”
IBM follows a much subtle and conceptual inspiration as opposed to Apple. In late 2008, IBM launched a “Smarter Planet” advertising campaign and spent hundreds of millions of dollars on it. This campaign was concluded after Mr. Palmisano – the current chief at IBM, and his team settled on a final theme: the use of technology and scientific research to undertake big challenges for business, and society in areas like transportation, energy, health care, and pollution.
According to Mr. John Kao, who’s an innovation consultant to governments and business, “Sure, it’s marketing, but it’s also a big idea that explains the company’s mission to the world and to its employees.”
On the other hand at Apple, the focus isn’t restricted to the basic science of traditional research, but is further expanded to the “behavioural science” meaning the user experience, explained a former Apple manager, who spoke to on condition of anonymity considering he was still employed at Apple.
IBM spends $6 billion a year on research and development and has laboratories all over the world and makes more patents than any other company in a year. IBM has five Nobel Prize winning scientists working for them. Apart from that, the company’s researchers publish papers, attend scientific conferences, and have made essential developments in mathematics, materials science and lastly, computing.
Apple on the other hand, doesn’t focus on scientific invention but only on their product innovation. And according to Michael Hawley, a computer scientist who worked for Mr. Jobs at NeXT “Apple does research insofar as it advances their laser-focused product aspirations…”
According to Hawley, “APPLE has technical experts who constantly scout new commercial technologies, he said; they work with suppliers, often co-inventing down to the chip level. Then prototypes and initial products are produced, with constant refinements. They are shown not to focus groups or to other outsiders, but only to Mr. Jobs and his lieutenants. For example, three iPhone prototypes were completed over the course of a year.”
IBM and Apple both have very successfully and dare I say, dramatically, transformed themselves. They’re both fantastic brands and financially very secure. The fascinating fact is that there’s ample room for both the companies to do well by investing in technology, but keeping the risk-adjustment in mind our support would always be with IBM. In case you’re wondering, this is why.
Excess of Data
This trend composites complexity on the whole and proves how IBM has been investing a great deal in capitalizing on Big Data confusion. IBM’s “Smarter Planet” initiative as mentioned earlier in this article, is entirely about data. The company’s vision is far impressive and broader in reach than any other. Explicitly, IBM’s aim is to transform all the industries through data analysis instrumentation, and decision-making tools, driven mainly by connected sensors.
IBM Does Intricacy Better Than Everyone
Backend IT is getting more and more complex by the day despite all the splendid visions of plugging into an IT “utility grid” The user experience is yes, way simpler and the plumbing may become irrelevant, but the use of IT is becoming astonishingly urbane. It’s what you do with IT that counts, not the IT itself. Therefore, IBM outshines and will print money serving big corporations figure-out how to apply technology in an attempt to generate better profits.
In the big tech zone, no one gets the services business model better IBM. IBM for starters is a services company, and entered the services IT economy later thanks to Lou Gerstner, which is why it’s considered sticky. And IBM has the vision and means to transform itself, in order to take advantage of the everything-as-a-service trend.
IBM’s social business is said to be the main reason behind IBM’s success. According to IBM’s Vice President, Sandy Carter’s, IBM’s social culture is directly if not partially responsible for this IBM’s grand success: “Our employees use social computing tools to foster collaboration, disseminate and consume news, develop networks, forge closer relationships, and build credibility. As a result, they’re better informed and prepared to take action on behalf of IBM.”
Carter also cited an Business Value Study by IBM where companies that use social business tools outperform the non-social group (in terms of EBITDA) by 57 percent. Carter took t a step further by saying, “If you’re not transforming your company into a social business, plan to be out of business.”
IBM’s Luis Suarez also agrees with Carter stance, quoting how IBM’s-run developerWorks, the 8 million strong customer community is aiding IBM technicians improve it’s products making it a help me to help you sort of a relation: “It’s a rich innovation ecosystem with a direct channel of communication between customers and developers on how to fix IBM products and make them better.”
Old business must evolve into Social Business as per IBM’s example. Companies need to be a bit more social, internally and externally, giving the business leaders an initiative to create and promote transparency and a culture of collaboration, without any vengeance. Long story short rapid innovation is the key to future business success.
And that constant evolution and innovation, that, is IBM!