New IBM CEO Arvind Krishna is going to continue to drive IBM’s cloud business. The choice he faces is how best to do that
New IBM CEO Arvind Krishna is going to continue to drive IBM’s cloud business. That choice has already been made. The choice he faces is how best to do that. The answer is probably cloud as service – for the moment.started moving IBM into the cloud to make it more relevant, but didn’t go far enough or fast enough. As Andrew Ross Sorkin wrote in the The New York Times’ Deal Book, January 31, 2020,
“The company still relies more on slow-growing hardware and software businesses than cloud computing, A.I. and data analysis.IBM is in trouble and in decline. It has been there before and recovered when Lou Gerstner famously led the change from hardware to service. Now Krishna has to catch up in the cloud. Leading through that point of inflection starts with picking a strategy.
Michael Porter’s value chain insights taught us that all organizations design, build, sell and market, deliver and service. The most effective organizations focus on one of design, build, deliver or service as the anchor for their competitive advantages. They invest to be best-in-class in that area while accepting world-class, strong, or good enough in other areas.
The trouble with playing catch-up is that others have already staked out their positions. When it comes to cloud computing, Amazon is winning with a distribution-focused strategy. Microsoft is doing well with a product-focused strategy. Krishna and IBM’s choosing to try to displace either of them with their strategies is doomed to failure. This means Krishna has to choose a different approach. The most logical is cloud as service, building on IBM’s current service focus. That gives them the greatest chance of success – at least until Apple designs a whole new approach to the cloud and blows everyone else out of the sky.
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