IBM reinvents itself, again, with a push to the cloud.
IBM has a knack for reinventing itself to stay relevant.
The IT goliath has announced that as of next year they’ll split into two public companies. “IBM” will pivot to a cloud services company by the end of 2021 -- with a focus on hybrid clouds. Their older IT services will remain under a new company called “NewCo.”
On the one hand, this is a defensive move against AWS, Google, and Microsoft. IBM wants to keep its customers -- and be with them, as they start moving slowly to the cloud. However, it is also a way to stay relevant, introducing new services that they could not deliver without the cloud.
How? By creating a new market for companies where the rate of change is very slow, easing them into the future with a hybrid cloud.
The new hybrid version of IBM will allow companies to use public and private clouds, even with their old IT infrastructure. A company does not have to entrust all of its sensitive data to a third-party provider like AWS on a public cloud.
This is appealing for old companies that might be hesitant to go “all-in” to a public cloud but still wish to test out cloud computing with partial workloads -- keeping the rest of their sensitive data under their old IT infrastructure.
The edge for IBM here is that it can retain the big players while allowing AWS and Azure to compete for smaller but more digitally modern companies. These legacy partners are so intertwined with IBM’s systems that it does not make sense for them to build from scratch with AWS.
Still, “89% of organizations have plans to develop a comprehensive hybrid cloud strategy in the next 12 months,” according to a survey commissioned by Forrester. This means IBM can target others who are also not ready to go full dive into AWS or Azure.
Even among Fortune 500 players, if you don’t adapt, you die. But IBM is a perfect example of how companies must reinvent their business or face bankruptcy.
The lesson for CEOs and decision-makers? IBM started this journey with Watson almost 10 years ago. That’s how far and long it can take to prepare for a significant transformation of your business.