Why 2011 Was a Very Good Year for IBM

2011 proved to be a very good year for IBM with the company celebrating 100 years in business, the introduction of the Watson super computer and naming its first female CEO, among other things.

2011: It was a very good year for IBM.

I like to listen to the song, "It Was a Very Good Year" (mostly Sinatra's and Lou Rawls' versions), and that comes to mind here with the naming of Virginia Rometty to succeed Sam Palmisano as CEO come Jan. 1. IBM's rendition might say:

"When I was 100It was a very good yearIt was a very good year for sharp femalesWith gumption and brainsTo take over the reinsGinni aimed right and trueAnd now she's running Big Blue"

OK, so I'm no song writer (and I sort of broke the pattern if you know the song), but you get the drift. 2011 included several significant financial, technological and market position moves for IBM. Yet, despite the cliche, oftentimes size matters. IBM is big and is about big moves. Certainly with a company of IBM's size in any given year there are so many big moves, acquisitions, inventions and whatnot that it's extremely difficult to pick one as the most significant. But 2011 was easy because the move to name a woman as CEO of perhaps the most representative brand in enterprise IT is huge. It shouldn't be, but it is.

On Oct. 25, 2011, IBM announced that its board of directors elected Virginia M. "Ginni" Rometty president and chief executive officer of the company, effective January 1, 2012. She was also elected a member of the board of directors, effective at that time. Ms. Rometty is currently IBM senior vice president and group executive for sales, marketing and strategy. She succeeds Samuel J. Palmisano, who currently is IBM chairman, president and chief executive officer. Palmisano will remain chairman of the board.

In the press release announcing the move Palmisano waxed on about Rometty.

"Ginni Rometty has successfully led several of IBM's most important businesses over the past decade - from the formation of IBM Global Business Services to the build-out of our Growth Markets Unit," Palmisano said in a statement. "But she is more than a superb operational executive. With every leadership role, she has strengthened our ability to integrate IBM's capabilities for our clients. She has spurred us to keep pace with the needs and aspirations of our clients by deepening our expertise and industry knowledge. Ginni's long-term strategic thinking and client focus are seen in our growth initiatives, from cloud computing and analytics to the commercialization of Watson. She brings to the role of CEO a unique combination of vision, client focus, unrelenting drive, and passion for IBMers and the company's future. I know the board agrees with me that Ginni is the ideal CEO to lead IBM into its second century."

Next up is Watson. IBM started out the year with a big bang, as its Watson thinking computer obliterated human competitors in a series of Jeopardy! matches in February 2011. Watson went on to make the rounds trouncing human competitors at some of the nation's top universities, including Harvard, MIT, Carnegie Mellon and the University of Pittsburgh to name a few.

"After four years, our scientific team believes that Watson is ready for this challenge based on its ability to rapidly comprehend what the Jeopardy clue is asking, analyze the information it has access to, come up with precise answers, and develop an accurate confidence in its response," said David Ferrucci, the scientist leading the IBM Research team that created Watson, at an event in New York airing the Jeopardy match. "Beyond our excitement for the match itself, our team is very motivated by the possibilities that Watson's breakthrough computing capabilities hold for building a smarter planet and helping people in their business tasks and personal lives."

The analytics-driven Deep Question Answering technology (from IBM's DeepQA Project) in Watson is being applied to commercial uses such as healthcare as a physician's assistant technology and internally at IBM to assist IBM sales staff, among other emerging uses.

On June 16, 2011, IBM celebrated its 100th anniversary with a huge invitation-only event at its Thomas J. Watson Research center in Yorktown Heights, NY. In attendance at the signature event were former IBM CEOs and chairmen, IBM Nobel laureates, IBM board members, CEOs and representatives of IBM's major customers, former top IBM executives and engineers, more than 20 IBMers who helped pioneer space travel working with NASA, 2,000 lucky IBM researchers and yours truly -- one lucky stowaway reporter.

2011 also saw IBM take a major focus on emerging markets, particularly Africa, by chasing core business on the continent and setting up new offices in several countries including Senegal, Kenya, Ghana, Tanzania and others. Big Blue also established a major presence with famed IBM PC inventor Mark Dean as CTO of IBM Middle East and Africa.

In addition, announced it would double the number of emerging leaders it sends on pro bono assignments to Africa during the next three years. As part of the company's Corporate Service Corps (CSC) program, aimed at developing IBM leaders and providing skilled assistance to local governments and non-government organizations in emerging markets, IBM will send about 600 employees to Africa through 2015.

However, despite an obvious push toward Africa, Dean who is the technologic truth and nothing but, is based in Dubai. Sorry Big Blue, you can call it "Middle East and Africa" if you want, but the thrust of this strategy, based on your own marketing, is clearly Africa. And if you want to focus on Africa you need to have your man in Africa.

In other moves in 2011, IBM established a strong presence in the social business software arena with new social business offerings, particularly for mobile devices. IBM also launched an aggressive Smarter Commerce strategy that covers the spectrum of enterprise commerce activities -- new ways to buy, sell and secure greater customer loyalty in the era of mobile and social networks.

At the same time, Big Blue continued to build on its already significant efforts in cloud computing and business analytics with a series of acquisitions such as i2, Algorithmics, DemandTec and Emptoris.

Meanwhile, 2011 also saw IBM keep up its effort to prove that the mainframe has more lives than a cat as the company continued to evolve the platform with a new midrange offering and new features such as Windows integration.

Other big IBM news in 2011 included a massive investment - to the tune of $10.7 billion for a 5.4 percent stake of the company -- from money master Warren Buffett. Buffett, who typically eschews investing in technology companies despite his close friendship with Bill Gates, said IBM's stock is one his Berkshire Hathaway concern will hold indefinitely. That Buffett would make IBM his target for such a large investment in a sector he usually avoids speaks volumes about his view of IBM's long term value.

"I don't know of any large company that really has been as specific on what they intend to do and how they intend to do it as IBM," Buffett told CNBC in a November interview where he announced that Berkshire Hathaway had been secretly amassing IBM stock since March 2011.

This year, IBM also showed a new interest in security with the October 2011 launch of a new security division in the IBM Software Group. And on the server side, IBM's Systems and Technology Group (STG) saw new growth at the expense of competitors such as Oracle and HP.

It was indeed a very good year.