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IBM at the Crossroads
- 1. IBM at theCrossroads Team 3- âBad Assetsâ: Annie Purcell, Evan Augello, Richard DiBlasio, Eliot Lichtenberg, Klaudia Szczerba
- 2. Agenda â Issues tobe Analyzed â Background â Internal Analysis â External Analysis â Alternative Solutions â Our Recommendations â Implementation Process â Expected Results â Questions
- 3. Issues to beAnalyzed
- 4. Relevant Background â Historyof reacting to change slowly, but eventually always reinvents itself â Began as hardware company â Emphasis on consulting and software â Cloud Computing and Data Analytics â Since 2009 international sales have decreased, mainly from Europe and the Middle East â October 2014 was 10th consecutive quarter of flat/declining sales
- 5. Offerings and MarketSegments Since 2002- Hardware, Software, Services Revenue by Geographic Segment- 2014
- 6. Tangible Resources: â Buildingsin 170 Countries â Cloud, Big Data & Watson Intangible Resources: â Human Capital â R&D/Innovation â Momentum within BD&A and Cloud Computing markets Core Capabilities: â Cognitive Computing â Security Reputation â Longevity of Brand Internal Analysis
- 7. Review of Financials 2010 (Numbersin Millions) PPE, Net: $14,097 Long-Term Debt: $21,846 Total Liabilities: $90,280 Total Stockholderâs Equity: $23,046 2014 (Numbers in Millions) PPE, Net: $10,771 Long-Term Debt: $35,074 Total Liabilities: $105,518 Total Stockholderâs Equity: $11,868
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- 10. Alternative Solutions 1 âą Focuson Big Data Analytics and becoming first mover in AI (Watson) âą Supported by Strategic Alliances and Development of B to C Operations âą Rebuild lost revenues from Government contracts 3 âą Continue the Firm/CEOâs approach of âDoubling Downâ on Cloud Computing 4 âą Develop Hybrid Cloud to compete with Amazonâs offerings 2
- 11. Recommendation â Expand BD&Athrough the use of Watsonâs cognitive computing â Marketing campaign to inform public of critical impact of big data â First Mover in AI- Watson â Develop B â C Operations to increase revenues â Strategic Alliances â Still must maintain cloud computing & other sectors of business â Continue to look for strategic acquisitions to gain new technology â All on a global basis
- 12. Phase 1: DevelopB â C Operations â Partnerships to develop B â C operations â Example: Apple- Siri & Watson â Partners both on domestic and global scale â Reach consumer market to increase revenues & compete more effectively â Will increase brand awareness & inform the public of the power of Analytics â Achieve through developing BD&A Strategic Unit
- 13. Phase 2: StrategicAlliances â Partner with Universities to increase familiarity with platforms â Both domestic universities & abroad â Goal of 50 Universities by 2020 â Create training program for BD&A â Will also increase brand awareness and enhance image with younger demographic
- 14. Phase 3: MarketingCampaign/Brand Enhancement â Launch global marketing campaign around Watson â Transform image as old company to become viewed as innovative brand â Enhance brand understanding- What does IBM do? â University partnerships and new presence in consumer markets as previously mentioned will enhance campaigns success
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- 18. Appendix â Big Dataand analytics. Our analytics business grew 7 percent to $17 billion in 2014. We are driving growth by helping our clients integrate all data sources â structured and unstructured â and apply a range of analytics â descriptive, predictive and prescriptive. We combine this capability with deep knowledge of industries and professions. Our analytics portfolio draws upon more than 30 acquisitions and includes nine Analytics Solutions Centers with an ecosystem of more than 6,000 business partners. Further, we are creating the next stage of Big Data and analytics with cognitive computing.