IBM shifts it's focus to accelerating the growth strategy

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Students assume getting a four-year degree and taking on the thousands of student loan debt that comes along with it - is the only way to get your foot in the door at top companies like Apple, Google, and Netflix. International Business Machines Corporation (IBM) is an American multinational technology and consulting company that provides hardware, software, cloud-based services and cognitive computing.

IBM along with Google, Apple and 11 other companies no longer require employees to have a college degree. In 2017, IBM’s vice president of talent Joanna Daley told in an interview that about 15 percent of her company’s U.S. hires don’t have a four-year degree. She said that instead of looking exclusively at candidates who went to college, IBM now looks at candidates who have hands-on experience via a coding boot camp or an industry-related vocational class.

IBM - Company Highlights

Startup Name IBM
Headquarters Armonk, New York, U.S.
Sector Public
Industry Cloud computing, Artificial intelligence, Computer hardware, Computer software
Founders Charles Ranlett Flint, Thomas Watson Sr
Founded June 16, 1911
CEO Arvind Krishna
Areas served 177 countries
Website www.ibm.com

IBM - About and How it works?
IBM - Logo and Meaning
IBM - Founders and Team
IBM - History
IBM - Investments
IBM - Revenue
IBM - Business Model
IBM - Hires Based on Skills and not College-Degree
IBM - Competitors
IBM - Growth
IBM - Future Plans

IBM - About and How it works?

International Business Machines Corporation (IBM) is an American multinational technology and consulting company headquartered in Armonk, New York, with more than 350,000 employees serving clients in 177 countries. IBM is a global technology company that provides hardware, software, cloud-based services and cognitive computing. Founded in 1911 following the merger of four companies in New York State by Charles Ranlett Flint, it was originally called Computing-Tabulating-Recording Company.

IBM has been present in India since 1951. Since inception, IBM India has expanded its operations with regional headquarters in Bangalore and offices across 20 cities. IBM India has established itself as one of the leaders in the Indian Information Technology Industry.

As a leading cognitive solutions and cloud platform company, innovation is at the core of the IBM company strategy. This is reflected in the end-to-end solutions delivered to clients, which span from software and systems hardware to a broad range of infrastructure, cognitive, cloud and consulting services. IBM helps clients solve complex business and technical issues by delivering deep business process and industry expertise. This is enhanced with advanced analytics, research capabilities, comprehensive IT infrastructure knowledge and the proven ability to implement enterprise solutions to deliver bottom line value to businesses and governments worldwide.

IBM - Logo and Meaning

Current IBM logo was designed in 1972 by an iconic American graphic designer Paul Rand. He understood that a distinguishing mark was essential to a company's success. Distinctive company logotype is the principal mean of distinguishing one product from that of another he observed.

The IBM logo

IBM - Founders and Team

Charles Flint and Thomas Watson Sr. are believed to be the founders of IBM.

Founders of IBM
“It is the policy of this company never to be satisfied with what we have and always to anticipate the demands of the future.”

This quote captures the vision of Thomas Watson Sr. who forged the disparate pieces of C-T-R into a strong, unified company that became International Business Machines.

“I had the leisure to turn to a field which has since interested me more than any other one—that is, the consolidation of corporations, the forming of what used to be known as ‘trusts.’ I have been called ‘the father of trusts,’ although sometimes I think I have been more nearly in the relation of godfather ," said Charles R. Flint.

The Computing-Tabulating-Recording Company, the precursor to IBM, was founded on June 16, 1911. At its beginning, it was a merger of three manufacturing businesses, a product of the times orchestrated by the financier, Charles Flint.  From these humble beginnings sprang the company that Thomas Watson Sr. molded into a global force in technology, management and culture.

Arvind Krishna (an IIT Kanpur graduate) is Chief Executive Officer of IBM.

Arvind Krishna, CEO of IBM

Arvind Krishna (born 1962) is an Indian-American business executive. He has been the CEO of  IBM since April 2020 predeceasing Ginni Rometty . Krishna began his career at IBM in 1990, at IBM's Thomas J. Watson Research Center, and was promoted to senior vice president in 2015. As a business leader and technologist, he has led the building and expansion of new markets for IBM in artificial intelligence, cloud, quantum computing, and blockchain. He has also played a significant role in the development of innovative IBM products and solutions based on these emerging technologies. Over his 30-year career at IBM, Arvind led a series of bold transformations and delivered proven business results. He most recently drove the successful $34 billion acquisition of Red Hat – the largest software acquisition – that has defined the hybrid cloud market.


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IBM - History

In 1911, the company was incorporated as the Computing-Tabulating-Recording Company (C-T-R) and manufactured a variety of machinery including industrial time recorders, commercial scales, tabulators, and punch cards.

C-T-R in Thomas Watson's era.
C-T-R in Thomas Watson's era.

Three years later, Thomas J. Watson, Sr. joined the company as general manager and set the company on course to become IBM as it's known today. Soon after being named president, Watson oversaw the shift of the company's primary product offering to large-scale business computing equipment and transitioned the name to IBM. To catalyze technological innovation, IBM opened the Watson Scientific Computing Laboratory at Columbia University in 1945.

IBM launched 701, the company's first computer, in 1952 and spent the next two decades dominating the field of mainframe and minicomputers. These machines (specifically the System/360 and 370 families) were capable of unprecedented levels of computing power, so they were widely used by businesses, universities, laboratories, and government offices alike. The dawn of personal computers (PCs) in the 1980s and 90s, however, created dramatic financial losses for IBM. As vendors like Compaq, Dell, and HP took over the PC and PC compatible market, IBM shifted toward integrated business solutions, consulting, and research.

IBM - Investments

  • Stock Symbol: NYSE:IBM
  • IPO Date: Jan 16, 2015

IBM has made 36 investments. Their most recent investment was on May 21, 2020.

Date Stage Amount Organization Name
May 21, 2020 Corporate Round - we.trade
Mar 9, 2020 Series D $25M Lightbend
Jan 30, 2020 Funding Round $20M Cambridge Quantum Computing
Dec 11, 2019 Series C $35M Digital Asset
Nov 3, 2019 Grant $120K Finclude
May 8, 2019 Grant CA$50K Syngli
Sep 20, 2018 Grant CA$50K Syngli
Jul 20, 2018 Grant $140K Borza
May 1, 2018 Grant - Hafnium Labs
Feb 14, 2018 Grant $120K Datawifi

IBM - Revenue

  • IBM revenue for the quarter ending September 30, 2020 was $17.560B, a 2.6% decline year-over-year.
  • IBM revenue for the twelve months ending September 30, 2020 was $75.030B, a 2.72% decline year-over-year.
Year Annual Revenue Percentage change
2019 $77.147B -3.07%
2018 $79.591B, +0.57%
2017 $79.139B -0.98%

Microsoft Vs. Apple Business Model
Microsoft and Apple are the two largest companies in the world. The business model of Apple is based on customer-centric devices and innovation. Microsoft’s business spanned across Windows, Office products, Gaming (Xbox), Hardware, Web search engine (Bing), Cloud, LinkedIn, etc.

IBM - Business Model

IBM is dedicated to innovate and develop in the fields of mainframe, nanotechnology, personal computers to digital data management, virtualization and cloud services. The IBM business model is based around providing software that allows large corporations to connect their disparate software systems and improve their IT performance.

So, five different business segments help IBM to channelize its business and they are-

  • Global Technology Services (GTS) - Most of the amazing businesses which are pretty large in the number have to make sure that there are so many different financial services that are present in the company along with some other industries such as the retail, telecommunication, healthcare, and some other things as well. Also, the business model of IBM has a pretty robust and amazing IT infrastructure that would be able to serve the customers to provide some results. The IBM Company is also using such services such as strategic outsourcing, integrated technology, support, Cloud, and other services as well.
  • Global Business Services (GBS) - There are some amazing services which are provided in the GBS and this is something that can be considered as a pretty great advantage for sure.

A) Consulting: Expertise on business strategy, Technology, Finance, marketing, operation, supply chain, software, systems hardware, global financing.

B) Application Management Services: It offers application management, support services for packaged software, maintenance, custom and legacy application.

  • Software Services

The company of IBM is also offering some of the services to the people who need some software assistance as well. There are some operating systems which are provided to the people along with middleware in the best way. The Middleware services that are provided are software layers which will be able to connect all the systems that are provided in the company. There is a standards software platform for the company. These are some services which are provided to the people in the business model of IBM who might need it in the first place to have their solutions for the software related problems.

  • Systems Hardware Services

To be honest, there are some hardware services that are provided in the business model of IBM as well and these are the services which are going to help people in the hardware front in the best way.

These are the hardware services which include the amazing system servers along with the storage solutions as well. The business model of IBM also provides some of the best installation services for the people.

In such services, the people will be provided some help when it comes to the installation of the different hardware products that have a pretty complicated nature.

These services make such processes pretty simpler for the people and hence are some of the best options for the generation of revenue for the company. The business model of IBM provides much importance to this service.

  • Global Financing

When it comes to the financing options in the best way, there is simply not a single speck of doubt about the fact that the businesses model of IBM is simply the best option for sure.

That is because the lease, installment payment options, as well as the loan financing options are the ones that are handled in this front and that too in the best way for sure.

That is one of the most important reasons why people tend to have so much faith in the business model of IBM. Three key services offered by this segment are client financing, commercial financing re-manufacturing and re-marketing.  

IBM - Competitors

  • IT Services: IBM's main competitors are Accenture, Hewlett Packard, and Wipro Technologies.
  • Infrastructure Software: IBM's biggest competitors are Microsoft, Oracle, and Amazon.
  • Hardware: IBM mainly competes against Oracle, Dell, and HP.
  • Global Financing: IBM competes with numerous small players.

IBM - Hires Based on Skills and not College-Degree

As with so many other companies competing for tech talent in a shrinking labor market, IBM is looking for hands-on skill rather than credentials. As more workers continue to pursue self-guided learning, the skills-based model will grow. Boot camp-style immersion programs are gaining momentum across the country.

Having a four-year college degree is generally regarded as a necessity to score a job in tech. But as the number of tech jobs has climbed, far outpacing the number of applicants, companies like IBM have turned to talent with non-traditional educational backgrounds. With this drastic shortage of tech workers, the company is now focusing on skills-based hiring rather than credentials to fill these roles. Many giant companies like GitHub follows the same procedure. In a  USA Today column, the company’s ex CEO Ginni Rometty explained that not all tech jobs require a college degree. As industries transform, she says, “jobs are being created that demand new skills – which in turn requires new approaches to education, training and recruiting.” These “new collar jobs,” said Rometty, were becoming harder to fill.

Ginni Rometty, ex-CEO of IBM
Ginni Rometty, ex-CEO of IBM

In the U.S. alone, there are more than 500,000 open jobs in tech- related sectors, according to the  U.S. Department of Labor. A recent study by Code.org reports that as many as 1 million programming jobs will be unfilled by 2022.

“About 15 percent of the people we hire in the U.S. don’t have four-year degrees. There’s an opportunity to broaden the candidates to fill the skills gap,” said IBM’s vice president of talent Joanna Daly.

In June 2017, the company  announced that it would be partnering with community colleges across the U.S. to better prepare more Americans for “new collar career opportunities.”

For those who don’t have a bachelor’s degree, Daly says she likes to see hands-on experience and that you’ve enrolled in vocational classes that pertain to the industry you’re applying to.

“I like candidates who have taken the initiative to learn these skills,” she says. For example, she advises that you take a coding boot camp if you want to work online.

“Know about the area that you’re applying for,and have a point of view about what we’re doing,” says the HR executive.


HCL Enterprises: A Case Study
Hindustan Computers Limited(HCL) is a multinational IT services and consulting company headquartered in Noida, Uttar Pradesh, India. HCL is a pioneer of modern computing with many firsts to its credit, including the introduction of the 8-bit microprocessor-based computer in 1978, well before its glo…

IBM - Growth

IBM's growth has returned in virtually all segments of the company. In 1995, IBM’s sales reached almost $72 billion, up more than 12 percent from 1994. For this, Gerstner(ex-CEO) and his team deserve great credit. Profitability was also up by 42 percent. And shareholders were richly rewarded: earnings per share rose by 44 percent. Even the mainframe market, the heart of IBM in the 1970s and 1980s that critics pronounced dead in the early 1990s, has recovered, with new mainframe computers bringing in substantial profit margins.

IBM - Future Plans

Arvind Krishna, the chief executive of IBM said that their goal is accelerating their future and growth strategy.

He further adds, " we are focused on accelerating our growth strategy and seizing the $1 trillion hybrid cloud opportunity. As we work toward this goal, two things are becoming increasingly clear. First, we’re seeing a tremendous increase in client demand for our capabilities and expertise. Second, we’re noticing that client buying needs for application and infrastructure services are diverging. Because of this, we have decided that the managed infrastructure services business of our GTS segment will become an independent company, which we’re initially referring to as “NewCo.” We expect the new company to be created sometime toward the end of 2021. IBM will sharpen its focus on its open hybrid cloud platform and AI capabilities. And the new company will focus on delivering managed infrastructure services."

He also said that apart from what will change, it is also important that the company emphasizes on what will not change. Both companies are going to share the same DNA. Namely, a deep understanding of how to apply the power of computing, how to solve complex problems, and how to work with customers to develop solutions that make sense in the context of their industries.

NewCo already serves more than 4,600 clients—including more than 75 percent of the Fortune 100. Its global reach will span 115 countries and include about 90,000 of IBM teammates. NewCo will also have greater freedom to forge partnerships and alliances in the managed infrastructure services space. This will open new avenues for growth. Basically, for both companies, client success will remain their north star.

Although IBM never fully recovered from its business losses, it is still a leader in the IT industry today. It's home to the largest industrial research facilities in the world, so it makes sense that IBM is still a powerhouse of large-scale business hardware offerings—specifically mainframe computers, servers, and infrastructure. IBM is also competitive in hosting and consulting services, including Platform-as-a-Service (PaaS), Managed Security Services (MSS), and IoT consulting.

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