A New, Nimbler IBM?

We’ve all heard, and many of us have witnessed, evidence of IBM’s turn-around strategy and renewed growth, under the leadership of CEO Lou Gerstner. We know IBM has gone well beyond its past reputation as a “hardware provider,” and has successfully transformed itself into a software applications, global services, and e-commerce player.

Yet, while there are more inroads IBM continues to make, its new approach is not always seen or understood as successfully as it can, or should, be. And that can translate to lost opportunity.

Take, for example, IBM’s launch of e-business Innovation Centers late last year, in seven U.S. cities and Europe. These Centers, part of IBM’s Global Services division, are collectives of the best and brightest e-business specialists – in areas of strategy, digital branding and marketing, interactive design, Web application development, knowledge management and systems integration. The Centers build upon the groundbreaking success of IBM’s Atlanta studio for interactive design, begun as an experiment in 1995.

The Centers’ stated goal: to move companies to “the next generation of e-business, with end-to-end full integration strategies.” The Centers are also building a network of alliance partners, and they recently announced two new strategic partnerships – an alliance with The Coleman Group Worldwide, which specializes in e-branding and digital branding, and an acquisition of the Aragon Consulting Group, which specializes in market segmentation and research, strategy, and branding.

Together with other Center partners, they will provide e-branding and strategy consulting for Fortune 1000 and emerging dot-com companies. These recent moves are consistent with IBM’s push to not only identify the e-commerce market, but also supply it with solutions that are customized to individual businesses'—and not just technology—needs.

Neil Isford, vice president, e-business services for IBM Global Services, put it this way, “IBM understands that e-business is not just about technology. It’s about business. To get anywhere with e-business, technology is not enough.”

I would add that it’s also about being first to market, and increasingly nimble and skillful in response to customer needs.

IBM is indeed making strides in that area. By tapping this wide range of e-business specialists, its global Innovation Centers offer Web-based business support in critical areas such as financial services, customer management, industry, distribution, telecommunications, the list goes on. The Centers are emphasizing strategic consulting, to help companies create working business models, and redefine brand value on the Internet.

These new Centers seem to have a forward-thinking focus; geared to help people thrive in the new economy, not the old. IBM has talked e-business; now it’s showing it can ante up as well.

IBM was late to the party getting word out about its PCs, and about its NetGen and new media capabilities. They weren’t unprepared - but they were late getting the word out. Now, clearly, IBM has a great story to tell. Can its customers hear it?

Big Blue has spent—and continues to spend—millions of dollars on creating brand awareness, through television commercials and advertising. I would say that brand awareness has occurred. As I began writing today’s column, I thought and said that the word is indeed out that IBM has re-energized its forces, and has reemerged as a leader in the IT industry. Gaining mind share, to IBM’s credit, has been accomplished.

Now, let’s see it go that one step further, from building mind share, to building market share. Competition for customers has never been fiercer, and there’s no better time to make a few bold moves.

IBM’s OEM strategy, i.e. teaming with the competition or “coopetition”, actively marketing its patent portfolio (and not just adding to it each year), and aggressively pursuing constituencies such a Web developers, net-gen companies and venture capitalists are examples of such bold moves.

Add to the above, a “gloves off” approach to fighting competition and we see a nimbler and bolder IBM emerging.

Timely execution of these initiatives is key to IBM’s future marketplace success.

IBM results for the third and fourth quarters of the year 2000 will be critical and we’ll be watching!

Related Information:

  • IBM Global Services (new window)

    Sam Albert is president of Sam Albert Associates (Scarsdale, N.Y.), a consulting firm that specializes in developing strategic corporate relationships. samalbert@samalbert.com.