If I were in charge of IBM this is what I would do.
First thing to do is get rid of PWC. You have to admit that these guys were hired simply because IBM software and processes were too complex for customers to implement on their own. You have to ask yourself how did Facebook succeed without an army of consultants? It succeeded because the software made things obvious. That is what you can do with advanced web design. So what IBM has to do is change the way they think about software and systems implementation. Here's my idea.
IBM cannot compete with Amazon, Google or Microsoft Azure in the pure cloud space. They are already too late to attract new customers and all They can do is convert their installed base. And if that's not giving that installed base a price break then they cannot improve the revenue. IBM cannot compete with Intel; the PowerPC chipset is dead.
So what IBM has to do is go after the fractured midmarket and leapfrog all the small competitors in that arena and consolidate that business. This will be all about cutting off the high end from Apple and Microsoft and then eroding the market share of SAP and Oracle. But IBM also has something that midmarket software vendors do not have which is lots of capital. This means that IBM can put cells physically in markets where small competitors are at a loss. More on that in a minute.
The place where IBM's going to make cash is by competing in broadband. Google fiber is going to be a competitor, But I think an IBM Cisco partnership would make mince meat out of Time Warner cable Comcast and seriously put a hurting on Verizon. Broadband is a cash cow. IBM can makes sense of new net neutrality work rules and lock out any other smaller players in this market.
So what does this mean? This means in any town with more than 50,000 people IBM will have a branch that branch will be like a WeWork / CoLoft presence. It will attract all the young programmers who don't want to go to places like PWC. It will give IBM first crack at rewriting all of the midmarket applications which would be no-brainers for these young ambitious programmers. Build next-generation software for the mid market and let them leapfrog all the legacy systems. This gives IBM new face, a cloud face, for all of their current AS/400 legacy systems. Mass migration. Lift and shift. IBM's first purchase? Workday. IBM's next purchase? RadioShack store fronts. IBM needs to keep its mainframe business for a time, but shed its other branded hardware server business faster than Dell and HP. Everything is apps. IBM has the advantage.
Put IBM into the mainstream of the midmarket and take it over. Build next-generation cloud capable applications with more customer responsibility then Amazon or Google are ready to take. Run that section of the business life PeopleSoft used to be. Serve coffee in the IBM workcenters. Cohost meetups. Make it your friendly neighborhood IBM. Get into fast cycle agile development of mid market applications that scale. Apps for business. Same approach as AS/400 with next-generation technology and a new wave of developers, excuse me, 'devs'. Here's the trick. Do an open source of IBM Research algorithms to the IBM cloud and a small license fee to off-IBM cloud implementations. Buy Raxspace if you have to and host a second kind of open-standards cloud. Two cloud models, one company. Only IBM could do that.
There's a question about salesforce.com. And that question is whether their API is sufficiently robust to compete with the APIs of AWS and Google. Here I'd make a side-bet on Apple Swift. I would bet that Java is dead. Let Oracle have it. But I would also make bets on Python and Ruby. I would also make bets on GoLang because it's a good thing for IBM to be totally open, however, Java has too much legacy crap that existed before the era of clouds. Make a fresh start.
At some point let's say four years from now. The functionality gap between the new midmarket apps and the Legacy IBM mainframe apps will become clear. My bet would be on the 80/20 rule that scaling up the midmarket apps will be cost beneficial to current mainframe customers. The 20% that can't migrate now pay a premium. The rest they bring over and lock out the rest of the market with lower prices. This will put pressure on SAP and Oracle and revitalize the 'enterprise' space. The enterprise space is now a web-beautiful, neighborhood-centric dev's paradise, and those young hungry programmers get a crack in SAP and Oracle at Microsoft and Google and anybody else who tries to enter the business app space. And oh by the way IBM's broadband will now be at an appreciable market share, in the new world of net neutrality regulation. ROLM, anyone?
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