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IBM: Capitalizing On Cloud Disruption

LeBlanc owes much of the promise of BlueMix to hard-fought lessons IBM learned over the last decade

When we talk about the disruption that results from digital transformation, we usually focus on enterprise consumers of technology. However, it’s also shaking up the enterprise software and hardware marketplace as well – and every large incumbent vendor is feeling the pinch.

Leading the pack of transform-or-die incumbents is IBM. This 103-year-old behemoth has a market cap of about $160 billion, although recent earnings have disappointed investors. Nevertheless, as a result of several key decisions they have made over the last twenty years, they are perhaps better suited to weather the current storm than any of their competitors.

How to Transform a Behemoth

battleshipIBM is no stranger to transformation. The company almost went under in the mid-1990s, until then-CEO Lou Gerstner got it on the ebusiness track. Today, “everybody is transforming,” says Robert LeBlanc, Senior Vice President, Cloud and Software Solutions at IBM. “IBM is coming through it too.”

Cloud computing in particular is the primary transformative force shaking up the incumbents. The shift from traditional software licenses and hardware sales to pay-as-you-go subscription revenues is upending their established business models. “Is the cloud driving the market or is the market driving the cloud?” LeBlanc asks. His answer? “Yes to both.”

Furthermore, this transformation requires a complete rework of existing enterprise software itself to follow modern cloud architectures. Without this cost-intensive redesign process, existing software would be unable to take advantage of many of the benefits of the cloud. “It’s an architecture challenge and a design challenge,” explains LeBlanc. “That’s why, two years ago, we formed IBM Design. Today, we have 500 designers around the world transforming the user experience of our products, with many more designers to be added over the next few years.”

Staffing up their global team of architects and designers, however, doesn’t explain their ability to transform their entire company. In fact, everything has to change. “Competitive advantage requires relentless change,” according to LeBlanc.

One critical move: the 2013 acquisition of cloud service provider SoftLayer. SoftLayer competes with Amazon.com, Google, Microsoft, and other public cloud providers, as well as offering more enterprise-centric capabilities, a strategy Amazon has had some struggles with.

SoftLayer is only part of IBM’s cloud strategy, however. In reality, they are all in with the cloud. “We’re applying a ‘cloud first’ strategy even to our infrastructure and hardware businesses,” explains LeBlanc.

In fact, IBM has been streamlining their hardware business, selling off various divisions in order to focus on Power 8 servers and System z mainframes. The goal is to offer “dynamic hybrid cloud,” LeBlanc continues. “SoftLayer with System z and Power Systems.” Hybrid clouds connect cloud to on premise environments and are shaping up to be a standard enterprise cloud configuration choice.

Rounding out IBM’s cloud offerings is their Platform-as-a-Service (PaaS) offering BlueMix. BlueMix leverages a broad spectrum of popular open source tools, enabling developers both in and out of large organizations to build cloud-ready software quickly and easily.

LeBlanc owes much of the promise of BlueMix to hard-fought lessons IBM learned over the last decade, as they built out their WebSphere middleware offerings to take advantage of the rise of Service-Oriented Architecture (SOA) in enterprises. “BlueMix’s PaaS fundamentals leverage the lessons we learned from building enterprise middleware capability,” LeBlanc says.

Read the rest of the article at http://www.forbes.com/sites/jasonbloomberg/2014/12/11/ibm-capitalizing-on-cloud-disruption/.

Intellyx advises companies on their digital transformation initiatives and helps vendors communicate their agility stories. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers. Image credit: Patrick Feller.

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More Stories By Jason Bloomberg

Jason Bloomberg is a leading IT industry analyst, Forbes contributor, keynote speaker, and globally recognized expert on multiple disruptive trends in enterprise technology and digital transformation. He is ranked #5 on Onalytica’s list of top Digital Transformation influencers for 2018 and #15 on Jax’s list of top DevOps influencers for 2017, the only person to appear on both lists.

As founder and president of Agile Digital Transformation analyst firm Intellyx, he advises, writes, and speaks on a diverse set of topics, including digital transformation, artificial intelligence, cloud computing, devops, big data/analytics, cybersecurity, blockchain/bitcoin/cryptocurrency, no-code/low-code platforms and tools, organizational transformation, internet of things, enterprise architecture, SD-WAN/SDX, mainframes, hybrid IT, and legacy transformation, among other topics.

Mr. Bloomberg’s articles in Forbes are often viewed by more than 100,000 readers. During his career, he has published over 1,200 articles (over 200 for Forbes alone), spoken at over 400 conferences and webinars, and he has been quoted in the press and blogosphere over 2,000 times.

Mr. Bloomberg is the author or coauthor of four books: The Agile Architecture Revolution (Wiley, 2013), Service Orient or Be Doomed! How Service Orientation Will Change Your Business (Wiley, 2006), XML and Web Services Unleashed (SAMS Publishing, 2002), and Web Page Scripting Techniques (Hayden Books, 1996). His next book, Agile Digital Transformation, is due within the next year.

At SOA-focused industry analyst firm ZapThink from 2001 to 2013, Mr. Bloomberg created and delivered the Licensed ZapThink Architect (LZA) Service-Oriented Architecture (SOA) course and associated credential, certifying over 1,700 professionals worldwide. He is one of the original Managing Partners of ZapThink LLC, which was acquired by Dovel Technologies in 2011.

Prior to ZapThink, Mr. Bloomberg built a diverse background in eBusiness technology management and industry analysis, including serving as a senior analyst in IDC’s eBusiness Advisory group, as well as holding eBusiness management positions at USWeb/CKS (later marchFIRST) and WaveBend Solutions (now Hitachi Consulting), and several software and web development positions.

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