OPINION: Victory goes to the brave

20 Jun 2011

Lessons for business and the cloud in a technology giant’s longevity and flexibility.

An article in The Economist about IBM, which is 100 years old this month, told of how the company has succeeded in repositioning itself in business three times since its foundation and is about to do so again with cloud computing. Having helped create Microsoft by asking the then-small company to develop the operating system software for IBM’s nascent personal computer, it was eventually overtaken by Microsoft in terms of valuation. The irony is that IBM, now passing into its second century of existence, has just recently overtaken Microsoft again – though this time it is pipped for first place by Apple.

The messages I took from the article are, a) it is important to be able to redefine and reshape your business execution and b) it is important to stick with clarity to your business idea (in IBM’s case, this was “deliver the best business technology to the customer”). These lessons hold particularly true for every business as they consider their moves to cloud computing. (In particular, as many of these companies found themselves accidentally in the IT business because of their deployment of what at first glance was cheap distributed computing made possible by the IBM PC.)

A lesson from Steve Jobs

When I was looking up some background for this article I also came across the following quotes from Apple CEO Steve Jobs on the launch of the original iPad. He said: “Is there room for something in the middle? We’ve wondered for years, as well. In order to create that category, they have to be far better at doing some key tasks, better than the laptop and better than the smartphone … What kind of tasks? Browsing the web. Doing email. Enjoying and sharing pics. Watching videos. Enjoying music. Playing games. Reading e-books … If there’s going to be a third category, it has to be better at these tasks – otherwise it has no reason for being. Now some people thought that was a netbook – the problem is that netbooks aren’t better than anything.”

What stands out here is the beautiful cold logic: “this new thing, it has to be better at what it does”. If it is not better it will disappear (mind you, I felt he was being a bit harsh on the netbook – it is lighter, cheaper and has a better battery life than a laptop).

It is no surprise, then, that both Apple and IBM have embraced cloud as their next step forward. Both companies understand the nature of change, the importance of the ‘main idea’ and the significance of what it means for something to be “better”. They both know that from a software perspective, cloud delivery of software is better. They both have probably studied Google’s steady advances in its delivery of email and office applications. Clearly, they have understood the benefits of incremental improvements as opposed to big-bang installs. They don’t necessarily share the exact same view of how to execute cloud, but they understand that cloud is the way.

Why back cloud computing?

For the average enterprise whose main focus is not necessarily IT technology, the insights of these giants are important. This is where the market is going and these giants are both following and leading the way. They are not backing cloud because they love the name, they are backing it because they will make money from it. They know they will make money from it, because it is a better way of doing things. They know it will radically improve a company’s efficiency and reduce a company’s costs. You can see from Jobs’ comments on the iPad how Apple thinks. To enter a market, the solution not only has to be new, it has to be better. If it is better, it will sell. Apple is in the cloud. If you are an IT manager, perhaps you should be asking yourself: ‘How can I leverage this improvement that is happening all around me?’ Because if you don’t leverage it, if you don’t change, you risk becoming like DEC, IBM’s great rival of the Seventies and Eighties. Obsolete.

Robert Baker (pictured)

Robert Baker is managing director of Baker Security and Networks, one of the earliest providers of managed networks to Irish Government departments in the early Nineties.