IBM and

Cloud
Computing
Industry
Wu, Vincent Wei Can
Alif Anggoro
Content
● What is Cloud Computing?

● IBM & What do they do?

● IBM throughout the years

Cloud Computing
● Storing and accessing data and programs over the Internet
instead of your computer's hard drive

● Divided into 3 models:

○ Software-as-a-Service(SaaS)

○ Platform-as-a-Service (PaaS)

○ Infrastructure-as-a-Service(IaaS)
Examples of Cloud Computing
IBM & What Do They Do?
● Originated as a punch-card data-processing equipment company in the 1896 with the name of Tabulating
Machine Company

● In 1924, they changed their name to International Business Machine (IBM)

● IBM had to adjust and survive different technological trends throughout the decades

● It is now one of the top global company that that provides hardware, software, cloud-based services and
cognitive computing.
IBM Throughout the Years
CEO of IBM Up To 1993

1. Joined IBM in 1960 after serving in the US Navy

2. He received 16 promotions in 23 years, becoming president in

1982 and chief executive in 1985

3. Akers was very successful during the mainframe era, when IBM
became the world's most powerful corporation in the IT industry

4. When the PC era came, he made some misjudgement that led to

IBM’s downfall

John Akers
John Akers Era

Smaller
Machines
John Akers Era

IBM thought Almost

PC as a toy bankrupt

● Decided to move from PC and focused on IT sectors

● Divided company into 13 business units (e.g. processors, storage,
softwares, etc.)
Discussion

What do you think are the reasons behind IBM

failure on the PC market?
3 Main Reasons Why IBM Failed in PC Market

● Did not understand the importance of PC

● Late in introducing their PC to the market

● Misjudgement in outsourcing components for their PC

IBM CEO From 1993 - 2003
1. Not a big fan of IBM

2. Had no particular understanding of computer-technology

industry

3. Has a background in consumer products, financial

services, and consulting

“We were going to build this company from the customer

Louis V. Gerstner back, not from the company out”
Gerstner Era
He liked the concept of “integrated solutions”

Gerstner developed 3 strategic pillars in building an integrated company

● Developing a broad computer services unit

● Relying exclusively on homegrown technology (IBM software running on competitor’s
hardware)
● Fully embrace the Internet

Lesson learned:

“Even though you miss the innovation cycle, there is still hope to get back in the game.”
Discussion

Whose strategy is better? Arkes’ Strategy that divide 13 business units

or Gerstner who integrate those units into 1?
IBM CEO From 2003-2011
1. Joined IBM as a salesman in 1973
2. Series of leadership positions, including
Senior VP.
3. Served as Senior Managing Director of
Operations for IBM Japan.
4. Served a 1-year as executive assistant for John

Samuel J. Palmisano Akers

5. His trademark is to talk informal to their
people
Palmisano Era
● Change of strategy:
○ Move from internet focus to consulting and software as foundation of the company
○ Focused on increasing margins to be the best IT service firms around the world

● First Cloud Computing Centers + applying consulting and technology service in

cloud:
○ Help customer understand potential of cloud

○ Assess their own cloud and plan accordingly

○ Provide expertise in installation, configuration and usage of private cloud for customer

● Became leader for cloud-based application

Palmisano Era
● Developing Certification program → company will gain IBM’s cloud consulting
practice
○ Creating standard in security and interoperability in emerging world of cloud computing
● Alliance with Google to promote cloud-based service
○ IBM historic strength in computing + Google’s expertise in Web computing
Discussion

What lessons can you learn from what have you observed?
Lessons?
● Dedications and vision can lead to achieve what had loss

● Stick to core competence of company

● Notice change in environment and pursue it to become the leader on that market
IBM Nowadays (2009-2010)
SaaS “Facebook for Enterprises”

PaaS

Align offerings to work in

the cloud

Iaas Building private or hybrid

cloud for clients
IBM Nowadays (2009-2010)
● Panasonic from Microsoft Exchange → IBM Lotus Live
● 10-month project cloud network infrastructure US Air Force
● Develop new cloud-related computer science models for universities
IBM Campaign

“What do you think about IBM campaign?Is this campaign align with their strategy?”
IBM Campaign

“What do you think about IBM campaign?Is this campaign align with their strategy?”

IBM investment in cloud computing would be a key resource in smart planet.

IBM in The Cloud Market
How does IBM make money?
What product do you think contribute the biggest for IBM revenue today?

What is the most famous IBM product that you know nowadays?

Do you see a lot of IBM products in your daily life?

Global Technology Service
● This segment focuses on providing IT infrastructure and business process services.
● Large businesses in different industries such as retail, and healthcare need robust IT
infrastructure and applications to serve their customers and efficiently run their business
operations.

● IBM Global Technology Services (GTS) provides end-to-end IT infrastructure and support
services to help these businesses maintain and improve the availability of IT
Software
● Software consists primarily of middleware and operating systems software

● Approximately 70 percent of Software segment revenue is annuity based, coming from

recurring license charges, software sold “as-a-Service”, and ongoing post-contract support

● One of the most innovative pieces of software that IBM offers is Watson, a system based
on cognitive computing
Global Business Service
● Global Business Services focuses on two primary business areas: Consulting and
Application Management Services.

● The consulting segment provides expertise on business strategy, finance, technology,

marketing, operation, and supply chain.

● Application Management Services offer application management, maintenance, and

support services for packaged software
Future for IBM

What should be the strategy for IBM in the future?