IBM and the Cloud? Don’t write it off

At today’s investor meeting, IBM execs announced a target of $40 billion in revenue for cloud, analytics, mobile, social and security software by 2018. I’ve expect to see folks talk about dinosaurs not being able to turn fast enough and predicting failure to meet that goal. I don’t know if they can do it, but to make such ardent predictions you’d have to ignore history.

Mid-sized Unix servers came along and folks talked about IBM going away.

IBM blew a chance to own PC industry and the same predictions followed them.

Linux? Freeware was going to destroy the mainframe. Oops, Linux partitions run on mainframes.

Now we know the large growth of the cloud. Much of it has been on commodity boxes. However, as data gets larger, analytics more powerful and networks become more robust, there’s clearly space for a company with such a strong history in hardware, services and adapting to changes.

After all, too many people still think of IBM as a hardware company. While it’s too early for the 2014 report, you can check the 2013 Annual Report and check page 7. Look at what a tiny percentage of the bar is hardware. Software and services are fairly even in splitting the vast majority of the revenue stream.

It’s a strong goal and will take a lot of pushing. How many politely phrased “re-orgs” will happen to lay off staff? Who knows? Will they succeed? No clue. All I expect is that they’ll continue to grow and nobody should count them out.

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