IBM. HP. Dell. Is anyone else noticing that these companies, once the leaders in enterprise information technology, are struggling to reinvent themselves? This struggle to change and meet new demands has always been part of their business. Today, these three face bigger and quicker moving challenges, such as easy access to cloud computing that fosters innovation and enables competition.
TO SURVIVE, BUSINESSES NEED TO BE TRANSFORMED RATHER THAN SHIFTED. THE NEAR TERM OUTLOOK ON SUCCESS OR FAILURE DEPENDS ON HOW SEVERELY AND SWIFTLY THESE TRANSFORMATIONS CAN BE IMPLEMENTED. MANAGEMENT, POLICIES, PRODUCTS AND THE INNOVATORS BEHIND THEM WILL DETERMINE THIS TRANSFORMATION’S SUCCESS.
Hardware innovation is rarely coming from these companies. In fact, IBM is rapidly divesting itself of its hardware business, selling off its x86 line, moving POWER into the open community, and repositioning itself as a software and services company. The recent reorganization, Project Chrome, is an indication of contracting market share and adjustment toward the new landscape. HP is fragmenting itself as well, and although the ProLiant line of servers is still popular, the Moonshot program seems to be falling short, the Itanium Superdome was a disaster, and the old Tandem division is just limping along. Dell has still not emerged with a new vision. Michael Dell no longer seems to be the wizard he once was, and no one seems to know what’s going on behind their veil of privacy. Hardware innovation now seems to be coming from companies like SeaMicro (now part of AMD), Mellanox Technologies, Penguin Computing, Nebula, Supermicro and others.
On the software front, VMware and Red Hat appear to be the emerging dominant players in the operating system space. OpenStack, open source software for creating private and public clouds, is available in various flavors from IBM, HP and Dell, but was developed and pioneered by Rackspace and NASA. Companies like Mirantis and Piston Cloud are gaining market share and industry analyst kudos. Who is leading development of enterprise applications like ERP and CRM? Not the big three. Security? I don’t think so. The vast majority of offerings have been the result of buying sprees by the M&A teams, not development by product groups within these giants. Big Data? Cloudera, MapR, Splunk and Hortonworks come to mind. Does Dell even have a Big Data play? What about IBM Watson? Although we’ve heard a lot about Watson over the years, widespread adoption is not happening quickly, and it is difficult to quantify the value Watson is delivering. And Watson certainly has yet to have the impact of Cloud or Big Data.
So, what does the future hold for IBM, HP and Dell? It’s difficult to say just yet. With tremendous resources at their disposal, visionary leadership could foster a turn around, à la Marissa Mayer at Yahoo or Gregg Lowe at Freescale Semiconductor. Titans take a long time to fall, but I have no doubt that they are indeed falling. What will the landscape look like afterwards? There will be space for a new kind of titan, and if IBM, HP and Dell manage to transform themselves they may still be standing among them.