Fortune on Ginni Rometty of IBM
Speaking October 16 at the Fortune Most Powerful Women Summit in Washington, D.C., Rometty outlined five areas on which she depends to help her prepare IBM for future markets. First, there’s research, an area in which the company has long been a leader. The company employs 3,000 Ph.D.s — the largest research outfit in the technology industry — and has been the global patent leader for the past 20 years. Just as important are relationships with clients, who are increasingly partnering more closely with IBM on innovation initiatives. Rometty also nurtures relationships with universities and with the venture capital community. And, thanks to new social tools, Rometty has been able to connect more deeply with IBM’s 400,000 employees to unearth ideas bubbling up internally.
That lays out IBM’s assets pretty well. But on a balance sheet you have equal and opposite liabilities. Here is also what Ginni has inherited.
a) An old-in-the-tooth product portfolio
Notes, Tivoli, Websphere, DB2, SAP consulting, outsourcing from Cold War era bunkers called Data Centers – by my estimate 2/3rds of IBM revenues come from products and services 10, 20, 30 years old.
b) An aging executive team
BusinessWeek calls its IBM’s executive office well seasoned. 14 of the executives have received their gold watches for 25 years of service. That would open eyes in any industry. In technology it really makes you take note.
c) Slow customer adoption of IBM innovations
Think of all the publicity Watson got after the Jeopardy! showing. Now 3+ years later see how few customers have adopted it. Ask IBM for the real life implementations that look so good in 30 second Smart Planet commercials. Many are one-offs.
d) Under-prepared for the Cloud era
IBM defined world-class in days past with its data center Yellow Books and other methods which influenced ITIL and other standards. Go to today’s cloud data centers and the energy management, redundancy, latency and security design leadership is coming from Amazon, Google, Facebook, Terremark, Switch and others. IBM is not even in those conversations. Same thing with systems integration. IBM is a small player when it comes to Salesforce, Workday and other SaaS projects.
e) Not blue suit, red tie anymore
Not unique to IBM but significant staffing in the last decade in emerging markets like India has created a diverse corporate culture. And ethical challenges and accounting issues in many markets.
(Cross-posted @ DealArchitect Full)
