IBM learns the lessons of its past
The centenary of the computer giant is a cause for celebration
Wednesday 22 June 2011
Tricky things for technology companies, milestone birthdays. For corporations on the cutting edge of technology, whose business is all about the very latest piece of kit or new IT service, getting older is not necessarily something to celebrate.
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And for IBM, which is navigating the 100th anniversary of its foundation this month, there could easily be the temptation to melancholy. This, after all, is a company that so dominated the technological development of the computer age that its supporters in the Sixties dubbed it Snow White to its rivals' Seven Dwarfs, and its detractors harried it for alleged monopolistic practices throughout the the Seventies. IBM's pre-eminence had begun eroding before Facebook's Mark Zuckerberg was even born.
But "it's not just about what you create, it's also about what you choose to leave behind," the company says, in an essay on its anniversary. "Leadership often requires shedding emotional attachment to that heritage. Consider the IBM Personal Computer. It was a product that spawned a whole new sector of our industry. But several years ago it became clear that the PC was not central to our future – or the future of computing. So we got out."
And that is why the anniversary is a genuine cause for celebration. While IBM may no longer be making products that the average consumer comes across, it is still a technology goliath worth $200bn. That puts it behind only Apple ($300bn) and level-pegging with Microsoft. With more than half its $100bn annual revenues coming from selling services to corporate and government customers – things like integrating, implementing and advising on their complex IT systems – it is leader in a market it largely created, and rivals such as Dell, Oracle and Hewlett-Packard are racing to copy its mix of hardware, software and services capabilities.
Sunit Gogia, an analyst at Morningstar, says Big Blue can look to the future with confidence. "What their history gets them is trust – they have long-term relationships with clients, and they have come to be seen as a trusted vendor – but ultimately their future comes down to answering their clients' question: can you solve the problems of today?"
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