The Trouble With IBM

Nick Summers, Businessweek:

As the Government Accountability Office reviewed the award, documents showed the CIA’s opinion of IBM was tepid at best. The agency had “grave” concerns about the ability of IBM technology to scale up and down in response to usage spikes, and it rated the company’s technical demo as “marginal.” Overall, the CIA concluded, IBM was a high-risk choice. In a court filing, Amazon blasted the elder company as a “late entrant to the cloud computing market” with an “uncompetitive, materially deficient proposal.” A federal judge agreed, ruling in October that with the “overall inferiority of its proposal,” IBM “lacked any chance of winning” the contract. The corporate cliché of the 1970s and ’80s, that no one ever got fired for buying IBM, had never seemed less true.

The article was written a few months ago in May, but large companies like IBM cannot change on a dime in such a short time, so I think it’s safe to assume IBM was and still is late to the game of cloud, and trails Amazon by quite a bit. But Rometty promises this:

“Let me start with this idea that we are going to lead the IT industry through this change,” Rometty said. “I’m very clear with my words in that this industry is going to reorder. It will not look the same 10 years from now. And we will be the leader in this industry.” Cloud sales delivered as a service, she said, were growing rapidly, on pace for $2.3 billion in 2014. IBM’s total revenue is $100 billion. “Look, this is not the first time we’ve transformed,” Rometty said. “This will not be the last time.”

IBM’s enterprise partnership with Apple is a good start.