IBM: International Business Machines
IBM, is an American multinational technology and consulting
corporation headquartered in Armonk, New York, United States.
The company was founded in 16th of June, 1911 by “Charles Ranlett
Flint” as the Computing Tabulating Recording Company (CTR)
through a merger of three companies:
(a)The Tabulating Machine Company.
(b) The International Time Recording Company.
(c) The Computing Scale Company
„Flint‟ recruited “Thomas J. Watson, Sr.” from the National Cash
Register Company to help lead the company in 1914.
He focused on customer service.
His favorite slogan, "THINK", became a mantra for C-T-R's
(computing-tabulating-recording) employees, and within 11 months of
joining C-T-R, Watson became its president.
CTR adopted the name International Business Machines in 1924.
Its distinctive culture and product branding has given it the nickname Big Blue.
In 1957, IBM developed the FORTRAN (FORMULA TRANSLATION) scientific
It is a general-purpose, imperative programming language that is especially suited
to numeric computation and Scientific computing.
Fortran is still used today for programming scientific and mathematical
IBM In India:
IBM has been present in India since 1992.
IBM India's solutions and services span all major industries including
financial services, healthcare, government, automotive, telecommunications
Products of IBM:
IBM manufactures and sells computer Hardware's and Software's.
Some Software‟s are:
Combines reliable, security-rich e-mail, calendar and
scheduling capabilities with a powerful platform for business collaboration.
IBM Graphical Data Display Manager (GDDM):
IBM Tivoli Access
Manager (TAM) is and an authentication authorization solution for corporate web
services operating systems, , and existing applications.
Some Hardware’s Are :
Personal Computer XT/370
IBM 801 Pioneering prototype RISC processor
IBM 6240 Magnetic card typewriter
IBM 3268 Dot matrix printer
Details of The Market Structure
What IBM Provides Today:
Clients of IBM:
IBM has acquired 28 companies to build targeted analytics and
information expertise since 2005, and continues to expand its ecosystem,
which today consists of more than 27,000 IBM business partners.
Some of their clients are:
Bank of Bermuda
Bank of Montreal
Market Share of IBM:
Market Share (%)
Total Revenue ($M)
Market Share (%)
Competitors of IBM
Quarterly Rate Growth
PEG (5 yr expected)
ACN = Accenture plc; HPQ = Hewlett-Packard Company; MSFT = Microsoft Corporation; Industry = Information Technology Services
Major Competitor of IBM & their Products
Powerful, portable computers good for
travel or replacement for a full-sized
• Dell Inspiron and Latitude
• HP Pavilion and Compaq
Low cost desktop PCs with largely
integrated components. Suitable as
home or home office PCs
• Dell OptiPlex and
Dimension Series PCs
• HP Pavilion and Compaq
Ultra high-end Unix workstations for
extremely advanced and/or
technical users (CAD/CAM, Design,
Engineering, Technical Analysis)
• Dell Precision Workstation
650 Series PCs
• HP Workstation zx2000
and zx6000 workstations
Modular, dual-CPU servers designed for optimal
scalability and performance
HP Proliant BL e-class blade servers
High-end, high-security scalable mainframe system for
virtually any enterprise application, including high end
scientific and technical analysis, application servers,
ecommerce, accounting functions, materials
management, distribution, manufacturing, human
resources, asset management, business intelligence,
and data mining
• HP9000 Superdome
SAN Storage Systems
Scalable SAN servers with Fiber Channel host to drive
• Dell /EMC Fiber Channel
RAID Array CX200, CX400
and CX600 Series
Entry Level &
High-end storage server. Supports storage • Dell/EMC Fiber Channel RAID
sharing for many systems including: Array CX600 Series
WinNT/2000/XP/2003, Linux, Novell
Netware, Irix, Unix, and IBM eServer
iSeries, pSeries, and zSeries servers
Powerful ,low-cost 64 bit processors that
don‟t sacrifice 32 bit computing
performance. Ideal for technical and
• HP HP9000 and RP5430 server
High-end, high-capacity ultra-scalable data • HP Linux LC Clusters
storage system designed for ultimate reliability
and availability. Includes cluster management
software designed to simplify deployment and
reduce administrative costs
Office Suite includes word processing, database • Microsoft office XP or Office
Strategies Followed by the Marketer
Initially IBM was only dependent on third parties which use to introduce new clients to
IBM. ---- Till 1970
During 1980‟s IBM become more involve with Independent software vendors (ISV‟s) &
Reseller as personal computer start gaining reputation.
In 1990‟s the demand of personal computer start increasing in huge number, so IBM
reinvented themselves and combined all small business & channels to cope up the market.
In 2001 suddenly the whole demand pattern took a change throughout the market, as
people started searching benefits out of new technologies. --- Market become harder.
Here the strategy of „MARKETING‟ evolved rather than only selling. They
started understanding their customer:
The company should more concern about the customer & should be driven by the clients not by the
Marketing should be done by the business that they are doing not by the communication or
Focusing on the customer they created different segmentation/ channel to meet the goal of marketing.
One channel or segment is not sufficient so, to do the marketing more efficiently IBM divided all the
transaction into three groups:
First type is already a owner of one or more products aiming to buy more of them & hence would have
some knowledge of the product.
II. The second type of transaction involved buyers who would be more of an expert, a technology expert.
III. The third & most critical transaction consisting of people carrying out complex business changes etc. &
consisting of both expert & non-expert buyers.
All these processes leads to find the right way to market also called „ Routes
To Market‟ (RTM) are now seven in number:
1. The first one which is being used to address and deal with the most complex matters
(the third type of transaction) is being controlled by „GLOBAL SERVICE‟ ( it has
been now renamed and the new name is „Business consulting Services‟).
2. The second route is being governed by the Independent Software Vendors (ISVs).
3. Major SIs was majorly controlling the third route. It consisted of both Hardware
(HW) and software (SW).
4. Fourth being controlled by the ISVs and regional Sis.
Fifth being controlled by FTF specialists.
6. Sixth route was through the solution providers. They were also the core business
partners for IBM.
7. Finally, the seventh route was being controlled directly through the Tele-Web.
The next step involved the analysis and comparison of the profit expected out of the clients
and the cost of the spent money on providing them with the required services. This was
done in order to decide about allocating or putting up sources such as the direct telephone
services or direct teams for clients. The step followed made IBM look at the abilities of the
Group Impression About IBM
• First mover in cloud computing solutions for
• Brand reputation
• Diversified business
• Strong competency in acquisitions
• Integration of products and services
• Expensive service and software solutions
• Focus mainly on large enterprises
• Expand services and software divisions
• Increasing demand of cloud based services
• Increasing competition in the cloud computing
• Slowing growth of world economy
“The company´s financial management and shares
buyback are one of the aspects that the Oracle of Omaha
likes the most. Cloud computing and other trends in the
sector provide ample growth opportunities for this IT
titan in the future. IBM pays a 1.5% dividend yield, has
increased dividends for 16 years in a row and trades at a
very reasonable P/E ratio of 15.4.”
~ Warren Buffet
Selected as the best company in information technology for 9 consecutive years.
The company transformed itself through the years from a hardware manufacturer to a
provider of software and services, increasing profit margins and cash flow generation
in the process.
Management has been able to make the right decisions and adapt the company to a
changing scenario to better fit its client s needs.
It is a stellar example of a high technology company that has kept
recreating itself over the last 4 decades...from emphasizing hardware.. to
software... to services.
It adheres to some basic principle like respect for the individual and quality
customer service and this has kept it at the top of the heap.
At Big Blue they truly think outside the box.
IBM a leading player in the server market follows good
strategy, innovating ideas. So they can continue this business for long term.
IBM creates value not just technology, so they can sustain in business for
a long time.
Ease of management makes the company and the products attractive.
Product perception issues-Despite being a comprehensive IT solutions provider,
IBM is perceived as an expensive and highly complicated solutions provider. For
instance, IBM offers certain solutions, where it provides its hardware solutions
with competitors' software and in some cases its software solutions on competitor‟s
This creates confusion in customers‟ minds and will drive them to a lesser complex
or easier alternative. Negative perception of the company‟s solutions will require
focused marketing efforts to induce confidence in customers‟ decision making