IBM is Dancing Again

In 1992, IBM, the biggest technology company in the 20th century, was about to vanish. In 1993, the company was rescued by Louis V. Gerstner Jr.,  who took over as CEO and got them back on the track again. He retired in 2002, leaving IBM as a leading technology company again with billions of profits.

In his book, Who Says Elephants Can’t Dance, he explained that he did that through many things, mainly:

• Changing the IBM strategy from the competition attitude into collaboration, where he turned his business enemies to partners and started to collaborate with Microsoft, Intel, and the open source community to provide end-to-end services for his customers.
• Changing the company culture to listen to external market forces instead of having a prideful attitude of “We make the technology, we set the standards,” which caused customers to look for cheaper and more flexible solutions instead of having a full-closed stack by one vendor (such as IBM mainframes).
• Set an entrepreneurial spirit in the company and gave IBM employees more ownership through stocks options and sales bonuses instead of having high wages, where they can feel that the success of the company can make them personally more successful.

Enterprise organizations have been the dominant target customer for IBM with a B2B business model. However, with the current wave of startup’s ecosystem, and with the rise of new trends such as cloud-computing, smart-phones, and Internet of Things (IoT), providing services for SME (small to medium enterprises) and for individuals through B2C models has become a huge market and opportunity that can't be missed.

IBM was trying to catch up with that wave for a long time by, for example, offering cloud services and being part of Cloud Foundry members. However, they realized that catching up with Amazon, Microsoft, and Google requires more than that.

And I think they have made it. They acquired RedHat, the most deployed Linux distribution on the cloud. With that, IBM returns again to be a major player on the cloud market, which directly affects all the current and promising technological trends.  

Now the question is: will IBM follow Oracle by forcing license on RedHat (same as Oracle has done to Java Standard Edition), or will they continue to collaborate with the other vendors and opensource community in standardization and providing reliable alternatives for customers?

Let’s wait and see.