Big Blue has certainly had some big problems in recent times – the drive to reinvent the old PC and server vendor into a cognitive and cloud powerhouse has not been without its struggles, with IBM notching up an impressive 19 consecutive quarters of decline in revenue.
To be fair, the market has not been kind. The declining PC and server market has hit IBM’s big money business which, coupled with a shifting technology landscape inhabited by everything from startups to open source, has caused Big Blue to try to break new ground…and with some success.
IBM has gone big on cognitive systems, with its ubiquitous Watson seemingly appearing everywhere from Wimbledon and the US Masters, to hospitals and banks. Strategic partnerships have further bolstered IBM’s presence in the cognitive market, with the likes of RBS, Visa, GM, Slack, Salesforce and BMW all tapping Watson for its smart insights.
The same pattern can be seen with blockchain, with IBM recently winning a major contract with a European banking consortium which counts the likes of HSBC and Deutsche Bank among its members.
However, IBM’s focus on these emerging areas have so far failed to rescue revenue and revive fortunes, which is part of the reason as to why Big Blue took a step never before taken in its 106-year history – enter Bob Lord, IBM’s first-ever Chief Digital Officer.
A self-confessed “change agent transformation junkie”, the ex-AOL President had a clear strategy, not unlike many other CDOs or CIOs, to lead change at IBM.
“When I came into the group as Chief Digital Officer I focused on three basic things – driving innovation for ourselves at IBM and for our clients, to improve performance and to keep the customer journey at the centre,” Mr Lord told CBR’s Ellie Burns.
“The reason why I kept the customer journey at the centre is because our job is to unleash IBM’s products and services to empower everyone in the world, not just the enterprise clients.
“If we want to really get Watson, for example, out to the world we have to digitally enable our products, digitally enable the experiences and make things accessible.”
Mr Lord’s strategy of going heavy on the digital is not unlike many companies, including IBM rivals. ‘Digitally enabling”, “experiences”, “customer journey” – all pretty standard digital transformation rhetoric. It is, however, the other dimension to Mr Lord’s job which highlights a shift in the normal way IBM does business. The big vendor of proprietary technology is shifting towards a more open, collaborative strategy all geared toward what the CDO thinks will be one of the biggest influencers in business.
“It’s not just the CMO and the CIO anymore, it’s the developer. The developer is now making 42% of IT decisions, whether people want to admit that or not.
“I think the days are just coming when the developer really becomes the rock star of the world, because they are going to be driving business strategy in ways that we haven’t seen yet.”
A clear motivation to tap into the growing developer space was a key factor in the hiring of Mr Lord to the CDO role, with big blue identifying that the future of software lies in this new emerging IT decision-maker.
“I think it’s a pivotal point for the company around the importance of this influencer base and the attention we are paying to this influencer base. When the inertia of your core business is so strong, which at IBM it is, it’s very hard to think about how to improve the customer experience for a developer who just wants to try our cloud. What we needed to do and Ginni [Ginni Rometty IBM CEO] did this, she pulled out all the digital assets sets and gave them to me so they could all be coordinated so there was a focused attempt on creating an experience for somebody who came online to try and buy our products.
“That’s the future of how software will be bought and we need to get in that game quickly.”
The challenge for the CDO was to create and nurture that sought after developer ecosystem, with the first step being to make sure that IBM tools and capabilities were accessible. The aim was, be it a student in college or a developer from a large enterprise, IBM tools and services could be accessed in no less than five minutes.
“Right now any client can go into our control panel on Bluemix and they can pull down Watson APIs and pay for Watson on an API call basis – they couldn’t do that three years ago. You had to bring in a services person to help you build a Watson application, So it wasn’t as accessible as it is today,” said Mr Lord.
“The early indication is that we are seeing lots of growth in that commercial segment as we start to open up our APIs and we start to open up our services.”
IBM has also made great strides forward where open source is concerned, committing to partnerships and creating initiatives designed to increase the company’s visibility in various open source communities. This is a key area for Mr Lord, who boldly told CBR that it is an area he wants to “put on steroids” in regard to IBM’s involvement in communities. Recently a partnership with Lightbend underscored Big Blue’s commitment to the Java and Scala communities, while initiatives like Bluemix Garage and partnerships with the likes of Hortonworks all serve to show IBM’s commitment to the developer community.
“If we are going to win this community over time we have to contribute to the open source world,” the CDO told CBR.
“It’s now part of the strategy to help feed the open source community, whether it is hyperledger or our commitment to CloudFoundry, and then connect those open source communities to the solution sets of our products. So it’s very purposeful.”
This focus on open source all circles back to the developer and IBM’s positioni
ng of the developer as the IT-decision maker of the future. The developer could prove to reverse fortunes, bring back revenues and offset losses from declining markets – but they need to the developers on side first. For Mr Lord, the developer is going to have a strong voice over three core architectures:
“They are going to influence the decisions and the direction around three architecture battles – the first is cloud architecture strategy; how are you using cloud? Is it on-prem, off-prem, is it public? Then it’s your data strategy and what tools do you use around data. The third battle is around artificial intelligence, what you are doing in the cognitive world. Those three architecture battles – they are going to have an influence on what tools and tech a big enterprise uses. “
The focus on developers has a single goal – to win. Win the market and beat competitors. The CDO, only a year into his job, shares the winner takes all mentality advocated by CEO Ginni Rometty.
Mr Lord talks about experiences and digital enabling, but at the end of the day all efforts are driven towards the singular goal of returning to profit and restoring IBM to the top of the tech pile. And if you are not on board, says the CDO, then get off the Big Blue train – a way of thinking which may explain the layoffs at IBM in recent times.
“We are really advocating this idea of having a winning culture. It’s about beating the competition and gaining market share, that’s what we need to do,” Mr Lord told CBR.
“I think Ginni has done a phenomenal job in the last year talking about a winning culture and how we are winners and we have to continue to be winners – but really stoking it to the level of laser focused on who the enemy is and how we are going to win and what we are going to do. That’s fun, you really get excited about it. I hate losing, I hate it. But I will tell you that not everybody wants that and then you have to cycle people out. I think that’s the phase we are in right now as a company.”
