IBM has announced its carving off its tech services business because it sees the future in cloud computing and AI. In this New York Times article, Ginni Rometty, IBM’s executive chair and former chief executive, said cloud computing, enhanced by artificial intelligence, “is now IBM’s enduring platform.”
I can just imagine the management consultant presentation that delivered this conclusion, backed up by reams of wildly costly “research” and interviews required to reach such a shockingly novel insight. IBM probably paid through the nose for it, as have all of its large competitors (most of whom have already been told the same thing).
I just don’t understand it.
For starters, at least some of the blather is a cover story for IBM’s plan to spin off its technology services business. Such spinoffs underly many of those management consultancy projects by promising that they’ll allow businesses to “focus” on core activities. There’s a trend cycle in business management that oscillates between favoring conglomerates and pure plays; we’re in the waning days of the latter, considering any of the cloud market leaders IBM supposedly emulates are vast conglomerates, so the same consultants will be advocating for combining businesses before long.
It’s mostly short-term financial jujitsu intended to make it easier for equity analysts to market stocks to their clients.
The longer term trend is real, though: The New York Times article cites the established fact that more and more companies are outsourcing IT and computing needs to Big Tech conglomerates. The assumption is that IBM’s business serving customers that operate their own IT shops somehow impedes it from competing/working with the likes of Google, Microsoft, and Amazon.
But there are dark clouds on the, er, cloud horizon, from regulatory scrutiny to the emergent discomfort many consumer have with its propensity of sharing private data with evildoers. The evolution of smart tech “at the edge” of networks is moving to make incessant reliance on the cloud unnecessary. Businesses may decide that having to rely entirely on one Big Tech company in order to function may not be such a good idea.
Oh, and every company is going to fight harder and harder to grab the data necessary to educate the AI the will run those cloud services, followed by the companies themselves and then the entire world.
IBM supposedly hopes to somehow finagle its way through this mess and help companies plug into any cloud provider, which sounds like a promising positioning strategy considering how things are going to change, perhaps wildly, in the mid and long-term.
I would have thought its services division enables and differentiates that thinking.
As a communicator, making the case for working with client IT departments to transition into the future would have been a huge and fun challenge. Conversely, the book on promoting AI and cloud computing has already been written, so there’s not much new that’ll come from that choice.
Its management consultants should have been tasked with providing a better explanation.