Wednesday, April 24, 2013

In every "cloud" there is a silver lining, namely IBM

As far we are concerned IBM is one of the leading IT companies worldwide, by laying emphasis on hardware, software, microelectronics and storage. Analysts regard IBM as the second major player of the industry, after Microsoft (based on long-term growth rate and net income). 
 If a strategy consultant  goes further with a thorough analysis of IBM, with the manifold provided  business tools such as 5 of Forces or even a SWOT analysis, he will acknowledge the fierce competition of the industry and how Microsoft, Dell and HP act promptly. Another important feature in the IBM's core operations that should be taken under consideration is the declining profit margins of hardware.  For this reason IBM has decided to take some important initiatives and to take advantage of a new middleware product. 
    IBM's orientation in the future, by selling erstwhile strong "assets" such as PC and now servers to Lenovo (1), shows a trend, that IBM is reluctant to take more pie in a wizened market, while HP doubles on the servers division. Yet, IBM sows seeds for cloud computing that it is the threshold of a new era in IT industry, the third era. After Industrial Age and Information age, comes the Insight Age (4). The sale of the server division, gives liquidity to the company and it's really something noteworthy. It also helps the company focus further in the development of new middleware services, for primarily private cloud infrastructures.
     Next, IBM's strategy logic is to link the revenue streams with the product line. This logic can bring success in the firm, by acknowledging the initial conditions and management choices. These parameters drive the customers to pay more for the added value of the Mobile Cloud (cloud, data and real-time social media), which is a sustainable competitive advantage of IBM, and given the fact that the industry and IBM's relative position (2). We can see that this Mobile Cloud will be the vehicle for further brand awareness for IBM. 
         At the same time, even though IBM is focusing on delivering Software Middleware services for Enterprise Clouds, it is still researching new hardware technologies. There are some encouraging breakthroughs that will distinguish IBM from the rest. a) The racetrack memory b) Graphene chips, that are better wireless chips and both energy-friendly and energy-efficient and finally c) carbon nanotubes in order to make smaller chips (3), apropos to IBM's vision for a smaller planet with sustainable solutions (6). In this way, IBM will offer mobile services with better batteries and greater memory or better performance. Although carbon nanotubes are a reliable advance, it relies on transistor technology which faces numerous operational problems, in this way other companies use Quantum Computing, DNA computing and even brain-like computers (3); Watson's achievement is a bright example of artificial intelligence in which IBM is willing to invest.
All these strategic moves by IBM are a testament of IBM’s commitment to develop their Smart Planet Initiative (6), which consists of products and services designed for the collective needs of their customers who now have to deal with petabytes of data, and require big ideas for their Big Data needs.

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