4

IBM

On Power

When companies have new data that needs storing, the default companies to turn to are now Amazon, Microsoft and Google. A lot of people think it should have been IBM. After years of infighting, juggling competing priorities and catering to unique customer demands that didn't scale, IBM has been relegated to a smaller but still powerful position in the cloud storage space. After more or less abandoning its hopes of becoming a leading public cloud provider, IBM has shifted its messaging and products toward the hybrid cloud, betting that customers will still want to handle sensitive and regulation-bound workloads on-prem while offloading dozens of other use cases to the public cloud. That shifting message has taken the same form as many other companies competing in the space: with a promise to Kondo-fy multiple interfaces so that storage management becomes more accessible. At the core, Big Blue is still Big Blue, meaning it's buoyed by its staying power in the tech industry as opposed to organic growth. The company collects IP like trading cards, which ultimately provides some safety net as CEO Arvind Krishna has placed his focus on recovering from the last decade-plus of starts and stops in the cloud market.

On Disruption

IBM's professional services group has fared well despite the company's losing cloud bid — in its most recent quarter, the division was up 11.6% to $4.4 billion in revenue, while its cloud software division grew just 3%. The company has been moving away from its hardware backbone when it comes to storage, putting more emphasis on its public cloud relationships, as evidenced by its Azure expansion last month and the company's previous AWS agreement. What could be on tap next for Big Blue is a similar partnership with Google. But more broadly, as the company pivots toward hybrid cloud and enterprises continue to need bespoke advice for their specific industry and company dynamics, it's possible that IBM will be known more for its consulting and implementation and less for its software.

Tea Leaves

IBM's professional services group has fared well despite the company's losing cloud bid — in its most recent quarter, the division was up 11.6% to $4.4 billion in revenue, while its cloud software division grew just 3%. The company has been moving away from its hardware backbone when it comes to storage, putting more emphasis on its public cloud relationships, as evidenced by its Azure expansion last month and the company's previous AWS agreement. What could be on tap next for Big Blue is a similar partnership with Google. But more broadly, as the company pivots toward hybrid cloud and enterprises continue to need bespoke advice for their specific industry and company dynamics, it's possible that IBM will be known more for its consulting and implementation and less for its software.

They Said It

"IBM is all-in on hybrid cloud and AI, determining years ago that our clients' only feasible path to rapid digital transformation is through a hybrid cloud strategy. Public cloud is an integral piece of that strategy." — IBM statement in response to Protocol's coverage of its cloud division

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