Ibm: The Cloud Industry

Case Summary

Case 16: IBM and the cloud industry

A web-based form of IT, cloud computing service allows clients to utilize the entirety of technological resources available on the Internet without any geographical restrictions. With the help of cloud computing, the IT industry has been able to shift its platform from product to service-oriented strategies.

Through cloud computing, companies implementing the service has had access to all layers of the IT stack, and these stacks have been used in accordance with the strategy that the company have chosen to implement. Firstly, at the infrastructure level, cloud computing has allowed data centers to achieve high utilization through services that have allowed developed to launch applications online. At the highest level of utilization, infrastructure-as-a-service has provided a combination of digital services and did not have to be installed on local servers or computers of a company.

The introduction of cloud computing has brought innovation to the IT industry, in that it allowed access through a variety of portable devices. In addition, it blurred traditional distinctions between conventional competitors of the industry.

IBM emerged as the number player of computer companies until the PC era. Due to strong competitors of personal computers, including the likes of Apple, and due to IBM’s ignorance of the strong potential of PC in the computer market, IBM has experienced significant decline in its performance in the 1980s.

This has led a CEO turnover to Louis Gerstner in the year of 1993. Gerstner decided to implement the concept of “integrated solutions”, through which IBM became a service-oriented networked computing company. IBM soon focused on the Internet and developed a separate party within the group named “e-business”.

The next CEO, Sam Palmisano has also likened this idea, moving the e-business even further. He suggested that IBM make a valuable part of client’s value chain and additionally expand its role beyond an equipment supplier. Since then, Palmisano invested heavily on solution-driven consulting services and divested its PC division to Lenovo. With such change, IBM has transformed into a global enterprise with its network service outreaching globally.

In 2007, IBM launched the “Blue Cloud”, which is a combination of S/W and H/W. IBM provided customized, cloud-based services with such implementation. In 2008, IBM extended its consulting and technology services through the cloud, and recently, started introducing new offerings at all three levels of the cloud infrastructure. With this, IBM has initiated a massive advertising campaign to promote the idea of building a smarter planet, in which all user-base could use integrated technology to deal with environmental and social issues.