I for IBM | A To Z Challenge

IBM is the brand for today’s #AtoZChallenge, for the theme ‘Brands that people identify with’.

Nicknamed Big Blue for its size, and for the use of blue color in products, packaging, and logo, IBM was founded in 1911, in New York, US, through a merger of three companies – Tabulating Machine Company, the International Time Recording Company, and the Computing Scale Company.

IBM logo

 

IBM – Story of adaptation and transition

 

Starting as a computing, tabulating & recording company, IBM became a world-class computer company by investing in mainframes in the late 1940s. It led the world market in making computers by 1955, and moved to PCs in 1980s.

As hardware started becoming commoditized by the late 1980s, the core hardware business and dynamic sales cultures that had served the company well for many years, no longer seemed tenable. IBM was headed towards decline.

Louis Gerstner, who took over as the CEO of IBM in 1993, astutely pushed IBM into services and consulting. Under the leadership of Louis Gerstner, (IBM CEO from 1993 – 2002), IBM reinvented itself and transitioned from a country-centric, product-focused company into a complete IT solution provider to businesses.

In his book,  ”Who says Elephants Can’t Dance”, Gerstner, gives an account of IBM’s turnaround.

 

Lou Gerstner quote

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IBM – Post Turnaround

 

We Make IT Happen. – IBM

Gerstner’s successor, Sam Palmisano took the revitalized IBM to greater heights of success and made it financially stronger.

IBM started acquiring software and analytics companies by the dozens, while selling off hardware. In 2005, IBM sold off it’s profitable PC business to China’s Lenovo.

After implementing a successful Roadmap 2010, Palmisano charted out a Roadmap 2015 that was embraced by his successor, Ginni Rometty, who took over as CEO in 2012.

 

..The Nagging Factors

 

While Palmisano left the company financially much stronger, critics have pointed out that some practices such as relentless cost-cutting, unsustainable work pressures, automatic culling of staff, and a culture steeped in bureaucracy have dampened staff motivation and morale, weighing down on the company’s ability to innovate.

With Microsoft, Amazon Web Services and Google competing in the cloud computing and infrastructure space, and with the emergence of agile firms that innovate continuously, giving customers the choice of pay-as-you-go fee structures and freedom to exit any time, IBM, with the tendency to lock down customers in long term contracts, faces stiff competition.

 

Maybe it’s time to THINK about more transitions at IBM.

 

References:

  1. Why IBM Is In Decline, Forbes
  2. IBM’s Sam Palmisano: A super second act, Fortune

 

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  • author's avatar

    By: Somali K Chakrabarti

    Hi there ! I am a management and leadership coach and a ‘çlinical blogger’. Well, that’s what my family & friends call me now ! Here, I tell stories of different brands, how people relate to the brands and the values, beliefs and emotions that they associate with the brands. Hope you enjoy reading my posts.

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About the author

Somali K Chakrabarti

Hi there ! I am a management and leadership coach and a 'çlinical blogger'. Well, that's what my family & friends call me now ! Here, I tell stories of different brands, how people relate to the brands and the values, beliefs and emotions that they associate with the brands. Hope you enjoy reading my posts.

Readers Comments (11)

  1. I find each one of your posts on the theme quite informative… 🙂

    Reply
  2. bhudeb chakrabarti April 11, 2015 @ 4:45 am

    I have gathered all the information I wanted to have about IBM . A great post .

    Reply
  3. Sanchayita Deb Verma April 11, 2015 @ 5:31 am

    Nice article.

    Reply
  4. Big is Bureaucratic

    Reply

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