IBM's Recent Acquisitions Show Developer Mindset in Rebuilding Plan

By Scot Petersen  |  Posted 2016-02-27 Print this article Print
IBM Rebuilds

The question going forward is how much the legacy businesses will help or hinder the strategic imperatives. Can IBM move at cloud-scale time frames while still selling much of their technology as "solutions" that require a heavy service component to any customer engagement?

Watson, of course, is the crown jewel with which IBM is trying to leverage cognitive capabilities across every business. At the conference, IBM introduced in beta three new APIs for Watson: Tone Analyzer, Emotion Analysis, and Visual Recognition, which can interpret text to recognize attitudes, emotions such as joy and disgust, as well as other emotions. But with Watson everywhere, simultaneously a service, a product, and a brand, it can be confusing to customers about what type Watson they are getting.

It will be up to CEO Ginni Rometty to rationalize the new and the old IBMs. It will take some time, but the company still has a ton of resources, lots of cutting-edge and industry leading technology, and very loyal customers. It also is a great partner as well as an industry leader, especially around open source.

In addition, certain areas of the hardware business, such as FlashSystem storage and mainframes, remain very strong. IBM appears prepared to continue acquiring companies and talent, as they did with the recent spree around digital marketing companies, such as Resource/Ammirati.

So what is not to like? It may not be pretty watching IBM struggle as it transforms itself to remain relevant in a new era of computing or as revenue tumbles quarter after quarter, but it's necessary. As hard as IBM works at making this transition, success is really going to depend on how eagerly customers want to go along for the ride.

Scot Petersen is a technology analyst at Ziff Brothers Investments, a private investment firm. He has an extensive background in the technology field. Prior to joining Ziff Brothers, Scot was the editorial director, Business Applications & Architecture, at TechTarget. Before that, he was the director, Editorial Operations, at Ziff Davis Enterprise. While at Ziff Davis Media, he was a writer and editor at eWEEK. No investment advice is offered in his blog. All duties are disclaimed. Scot works for a private investment firm, which may at any time invest in companies whose products are discussed in this blog, and no disclosure of securities transactions will be made.


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