Wednesday, June 15, 2011

As IBM gears up for its centenary, challenges abound

Carter Lusher, chief analyst, Ovum

AUSTRALIA: IBM is not just a huge, multi-national vendor, but what Ovum terms a ‘mega vendor’, one of a handful of companies that shapes the global IT industry. IBM just doesn’t provide products and services, but dramatically impacts the IT visions and strategies for enterprises and public sector organisations around the globe.

However, IBM has made significant missteps in the past that negatively impacted its influence and even its survival. We think that one of the biggest dangers for IBM is complacency, but it has a plethora of other challenges including disruption by technology and competition, consumerisation of IT, government regulation pushed in part by non-governmental organisations (NGOs), and obsession with financial results that cause it to fail other stakeholders.

While we celebrate IBM’s centenary, it is critical to think about how this vendor will adapt in the future. Three CEO cycles, countless changes in the tech fad du jour, climate change, politicians and NGOs wanting IBM to do things that make no business sense, are all challenges and opportunities it will face over the next 20 years.

IBM needs to focus on the ‘international’ and ‘business’ parts of its name. It thrives when it focuses on the business needs and opportunities of its customers.

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