IBM's Recent Acquisitions Show Developer Mindset in Rebuilding Plan

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

IBM's recent acquisitions, including The Weather Company, Cloudant and ClearLeap, are helping Big Blue transform itself for a new era of computing, but the transformation is far from complete.

LAS VEGAS—David Kenny, the freshly minted General Manager of IBM Watson, took the stage at the InterConnect conference here Tuesday dressed in jeans and sneakers with his shirt untucked. I had to check my badge to see that I was, indeed, at an IBM conference.

Kenny, the former CEO of The Weather Company, which IBM acquired in late January, didn't apologize. "I'm dressed like a developer," he said, "because developers are Watson's customers."

Kenny, together with CEOs of other IBM acquisitions, like Braxton Jarratt, formerly of Clearleap, the video company acquired in 2015, and Derek Schoettle of Cloudant, a 2014 acquisition, represent a new breed of IBM'er, one who is not tied to the buttoned-down past and who can execute the strategy for where IBM is heading.

That new direction, of course, is IBM's "strategic imperatives" of cloud computing, analytics, mobile, social and security software and services. Revenue from those areas grew 26 percent in the past year and add up to $29 billion, but is that just accounting magic to make the company's declining revenues look better or is the company's on-the-fly transformation really working?

Judging from the news from InterConnect, IBM's focus is certainly in the right place. As Kenny said, the developer is the key to IBM's strategy and success going forward. The biggest announcement was around Swift, Apple's hugely popular programming language that IBM, a close partner, is extending with a new runtime and package catalog that will make it easier to develop cloud-based and enterprise applications.

The other key piece catering to developers is IBM's Bluemix platform-as-a-service, which continues to add services and now includes the new OpenWhisk, a direct counter to AWS's Lambda event-driven service that enables code to be executed based on events triggered from other applications—a necessary piece of next-generation cloud applications.

Other bright spots include IBM's new Cloud Video Services unit, formed last month following the acquisition of Ustream and led by Clearleap's Jarratt. When you consider that video represents most of the world's overall Internet traffic and data, IBM is now well positioned to manage a lot of it. And by adding Watson to the mix IBM can do interesting things around that data, like build automated video recognition systems.

Traditional video surveillance systems, for instance, are a "huge waste of time," said Jarratt. "Machine learning and cognitive learning around video is simple and extremely valuable, increasing accuracy and reducing manpower costs associated with monitoring."

So far, so good. However, this "new" IBM, which makes up about 35 percent of the company's revenue, is still small fry compared to the rest of IBM's hardware, software and global services divisions, none of which are growth businesses any longer.


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel