Where Is IBM’s Sweet Spot In Asia Pacific?
Over the past few years, IBM has certainly copped its fair share of criticism in the Asian media, particularly in Australia. Whether this criticism is deserved or not is beside the point. Perception is reality — and it’s led some companies and governments to exclude IBM from project bids and longer-term sourcing deals. On top of this, the firm’s recent earnings in Asia Pacific have disappointed.
But I’ve had the chance to spend some quality time with IBM at analyst events across Asia Pacific over the past 12 months, and it’s clear that the company does some things well — in fact, IBM is sometimes years ahead of the pack. For this reason, I advise clients that it would be detrimental to exclude IBM from a deal that may play to one of these strengths.
IBM’s value lies in the innovation and global best practices it can bring to deals; the capabilities coming out of IBM Labs and the resulting products, services, and capabilities continue to lead the industry. IBM is one of the few IT vendors whose R&D has struck the right balance between shorter-term business returns and longer-term big bets.
If you examine IBM’s investments in “data scientists,” mathematicians, industry experts, and process gurus, you’ll understand where IBM is taking its clients. It goes beyond good or “best” practices; in some cases, the vendor’s thinking and capabilities around its “smarter” initiatives (smarter planet, smarter cities, smarter roads, smarter work) lead the world. IBM’s ability to find the patterns in big data that matter for its clients — to understand where deep analytics and real-time analysis make sense and where they do not — is either on par with or ahead of its peers. IBM has moved well beyond just delivering IT solutions and is all about enhancing and improving business processes for business benefit.
The company has the potential to change the conversation in several contexts:
- IBM’s ability to speak to miners about how to use process change to improve a mine’s efficiency, boost its output, or get a flooded mine back online quickly goes well beyond the conversations that most IT vendors are having with their mining clients.
- The work that IBM is doing in Australia (and globally) around the management of natural disasters has the potential to drive government agendas.
- Its smarter road management capabilities — which could, for example increase the capacity of an existing road by 40% without laying a single meter of asphalt — can change the way that governments and construction and engineering firms think about funding, building, and maintaining roads.
- Most importantly, IBM has an ability to make its stories real in areas where many of its competitors’ “next-gen” or “smarter” initiatives have proven much harder to roll out than the slideware initially promised.
“Smart” appears to be smart for IBM’s bottom line, too: While overall revenue is flat or down, Smarter Planet revenue is up 20% YTD, business analytics revenue is up 8%, and cloud revenue has increased by more than 70%.
IBM is slowly changing how people — including me and some IBM clients — think about its innovative “smarter planet” solutions. Let’s see if companies and governments in Asia Pacific agree.