Thirty years of design and innovation highlight's Lenovo's ThinkPad
gettyNot long after I joined Creative Strategies in 1981, I received a call from IBM looking for forecasts on the PC market. At that time, the PC market was in its infancy, and it was anyone's guess then as to its future growth.
However, they had seen a quote I made to a major tech publication stating that I thought PCs could be a significant growth market and be transformational for the business market. I based that theory on my familiarity with the first spreadsheet product on the Apple II called VisiCalc. I saw how large companies bought Apple IIs and VisiCalc for their accounting departments. (Full disclosure- my wife worked for VisiCorp, the company that made VisiCalc; thus, my familiarity with the product was firsthand.)
That led to a set of research assignments from IBM, and for many years I worked with them on various projects related to the growth of the PC market at the product and channel level.
One of the most interesting programs I was asked to help with was the design of their original laptop in late 1985. At that time, IBM only made large PCs with separate monitors, mostly in battleship grey.
Earlier that year, at CEBIT, a major technology show in Hannover, Germany, Toshiba introduced what became the first real commercial clamshell laptop design called the T100.
I was at that CEBIT show and the launch of the T100, and I asked to "borrow" it to help me cover the show. Of course, Toshiba denied this request, although they did get me one to test once I was back in the U.S.
IBM was deeply interested in the Toshiba T100 design, and the IBM design group in Austin, TX asked me to consult on the project. So for about a year, I would go between Austin and Atlanta, where part of IBM's technical design was developed, and Boca Raton, where the marketing strategy was developed.
This led to IBM introducing the 5140 in 1986.
IBM's "luggable" pc, the 5140
IBMThis first product was still in the luggable category of personal computers, but soon after it was released, IBM launched its first series of clamshell-based laptops. IBM's first clamshell
IBM PS/2 L40 SX - IBM's first "clamshell"
IBMwas the IBM PS/2 Model L40 SX.
Most of IBM's earliest models had only minor success until 1992, when IBM introduced its first line of ThinkPad models.
In 1988, the father of the ThinkPad, Arimasa Naitoh, a Lenovo Fellow located in Japan, received a call about the need to spearhead a new portable computing venture in IBM's research center in Yokohama, Japan. At the time, he was based in White Plains, NY but moved back to Japan to develop what has become the iconic ThinkPad line of portable computers.
I got to watch the development of the ThinkPad from the beginning. Mr Naitoh's leadership, assisted by David Hill, who was instrumental in creating the unique ThinkPad design, made IBM at that time one of the most important portable computer companies in the market.
This chart shows the design history of the Thinkpad and why it is still a big part of Lenovo's success in portable computing:
A visual history of ThinkPad's design
LenovoUnder IBM's leadership, the ThinkPad became one of the best-selling laptops in the enterprise. Still, from its introduction to when Lenovo bought IBM's PC business in 2005, they had only sold 25 million ThinkPads.
However, the ThinkPad's growth under Lenovo's leadership has been remarkable. Today, Lenovo has sold over 200 million ThinkPads, and the company continues to innovate around the ThinkPad design to Improve it. Although many key players inside Lenovo had a significant impact on ThinkPad's growth, its most considerable thrust and success came under the leadership of Dilip Bhatia, Vice President of Global Marketing, User and Customer Experience, and former Vice President and General Manager of ThinkPad.
A great example of their innovative design and thinking comes with their new line of foldable ThinkPads called the ThinkPad X1 Fold.
Although foldable technology is still in its infancy, Lenovo's willingness to blaze new trails with new and innovative designs has been the trademark of Lenovo's design teams since they first introduced the line of ThinkPads in 1992.
Watching the overall growth of the mobile computing market, especially the birth and evolution of the ThinkPad, has given me a deeper appreciation for the men and women who worked so hard to make portable computing the largest PC market today. And the Lenovo team has played a major role in helping the mobile computing industry grow exponentially over that last few decades.
For those interested in the history of the ThinkPad, I recommend Mr. Naitoh's book on the subject-
How the ThinkPad Changed the World and Is Shaping the Future."
Ideas are crucial for spurring innovations in products and services. One such innovative leader is Heena Purohit, who plays a major role in providing teams with a framework for maturing their ideas into products for customers.
Analytics India Magazine interacted with Purohit, head of product at IBM. She is the product lead at IBM’s internal incubator program, which enables IBMers to bring innovative ideas and solutions to the real world. Purohit founded ‘AI for Her’ — a 501(c)(3) non-profit organisation on a mission to bring more women and gender minorities into AI. By reducing the AI diversity gap, it helps to build AI systems that are fair and unbiased.
“A typical day for me involves working with various venture teams that deal with emerging technologies and advising them on their product strategy and execution. This includes tasks such as designing and helping teams execute experiments to ensure the venture would be a viable business for IBM, coaching teams on product thinking or, if needed, rolling up my sleeves and supporting the teams in building customer collateral, lead customer/user interviews, and support sales execution.”
Transforming ideas into products
Purohit says that no two days are alike at work, especially since each venture team is different and is solving a unique customer problem in a distinct way. “And that’s the most fun part of my job!”
She says, “My program is open for IBMers around the world, providing an opportunity to surface and test the best ideas across IBM. This helps in facilitating a culture of innovation and intrapreneurship within the company, while helping IBM build and launch the next generation of products, faster.” She adds that for many teams submissions are ideas and technologies they’ve been working on for years. Being selected in the program finally gives them the opportunity to put their experiments to work and see if they’re actually viable.
Implementing AI in product management
In her initial years at IBM, Purohit built AI solutions for industrial customers driving the strategy, product management and design to help manufacturing clients. She holds an undergraduate degree in telecommunications engineering from the University of Mumbai, where she built solutions involving IoT data/sensors. She also holds a double-major MBA from the University of Notre Dame. “So during my MBA, I came across a brand-new business that IBM was launching (Watson IoT), I applied and was selected for a product management internship role in the unit.”
Purohit says, like many others, she fell into AI following her interests. “While IoT sensors were a disruptive way to get more data than ever, I felt gravitated towards the part where you analyse the data – from IoT sensors, or other structured and unstructured data – to unlock new insights. I was fascinated by how AI/ML technologies enabled us to do that in new ways.”
She said her AI journey began during this period, where she had the opportunity to launch and scale vertical AI solutions for industrial customers. The experience gave insights into having a firsthand look at the opportunities and challenges that customers are facing in adopting AI across the company. Having worked with some of the most brilliant AI minds at the company, Purohit says that her passion for emerging AI technologies and solving key business problems only grew.
‘You don’t have to be a data scientist to understand or benefit from AI’
Having worked with several customers and mentees to help them adopt AI or get into AI roles, Purohit shares one of her biggest learnings, “You don’t have to be a data scientist to understand or benefit from AI. This is also freeing because as AI technologies get more and more accessible, it helps bring more diverse voices in AI discussions, getting them to help build an AI-powered future.”
More specifically to her experience working on emerging technologies, Heena says that this is a great time to build a product. “To get started, think about all the tasks you do in your personal and professional life. Identify the manual/repetitive/mundane tasks and think if AI can help you Improve that experience. If the answer is yes, try it out. It’s very likely that there’s a no-code AI tool out there for you to prototype this. This way, you’re not only dipping your toes in AI but also gaining the experience in using AI tools, so that you can then move on to solving bigger and better problems with AI.”
Purohit has been on a mission to make AI more accessible and help bring more people into the AI industry. She adds that this has manifested into the decisions made around which products to lead. Outside her current role at IBM, Purohit has spoken at over 20 events on the topic, and been published in over 15 books and articles. The tech leader has actively judged AI solutions at 6 hackathons. “The ‘AI for Her’ content on getting into AI and AI literacy has impacted over 12,000 students. And this feels like just the beginning.”
Find your tribe of cheerleaders and supporters
Purohit shares that across all channels, the biggest takeaways have come from the questions since they provide insight into the pain points that people are facing today. “These challenges often don’t pertain to the technical skills gap but around the mindset shift. And that’s why in most of the sessions I’ve delivered, we end up touching upon subjects such as imposter syndrome, knowing your worth, and finding your tribe of cheerleaders and supporters,” she said.
She credits IBM for providing an incredible network of mentors that inspired and gave her opportunities to grow. “Perfect segway from the mindset shift because I faced that as I moved up in my career trajectory, too. It’s important to acknowledge that one doesn’t get to where they are without the help of others. I’m grateful for the support I’ve received, and it’s also why I feel passionately about paying it forward.”
Purohit was recognised as one of the Top 11 ‘Women AI Leaders’ at RISE 2020 and Datatech Vibe’s 2021 ‘Top Women Leaders In AI To Watch’. She was awarded the University’s Alumni Award in 2019 for her impact on women in technology initiatives. “I feel incredibly thankful for both recognitions and am honoured to be mentioned alongside many of the women I admire. I want to talk about how this happened. At the start of the pandemic, when everyone was in strict lockdown, I missed my break room conversations where I’d catch up with my colleagues and geek out on AI. I raised this on one of my favourite Women in Tech Facebook groups and turns out, many other women missed this, too.”
Purohit says that this led to the establishment of ‘AI for Her’. “This gave me the confidence to take this further and we’re now a 501c3 nonprofit on a mission to reduce the gender gap in the AI industry today and amplify the message that everyone can get into AI. We’ve been brewing some even more exciting things this year and looking forward to the launch!”
Take Five
1. Favourite thing in the ML/AI industry today & why? I’m incredibly excited about foundation models. Having tested various foundation models, I can attest that not only are they better than anything else I’ve used, but also they’re equally flawed. So, while I know we have a way to go before foundation models become usable, I’m excited by how they could transform many areas of our lives today
2. Top three apps you frequently use: YouTube, Elevate, and Reddit
3. Favourite book on AI: Weapons of Math Destruction
4. Favourite podcast in AI and ML: I prefer non-AI podcasts to bring in more diversity to my day-to-day life. I love Exponent (Ben Thomson’s podcast on tech business analysis) and Acquired (Great storytelling and startup analysis)
5. What would you have been doing if you weren’t a Product Head? I would certainly still be in tech. But as a consultant or a Product Owner
6. How do you define your leadership style? I strive to lead with empathy. Since the pandemic, this has become more important to me than ever
Channel programs News
Wade Tyler Millward
“We can‘t be essential unless our partners are skilled in our products and confident in going to their clients with our products and selling them with us and for IBM,” IBM channel chief Kate Woolley said.
IBM has started giving registered members of its PartnerWorld program access to the training, badges and enablement IBM sales employees get along with a new learning hub for accessing materials.
The expansion is part of the Armonk, N.Y.-based tech giant’s investment in its partner program, IBM channel chief Kate Woolley told CRN in an interview.
“We can‘t be essential unless our partners are skilled in our products and confident in going to their clients with our products and selling them with us and for IBM,” said Woolley (pictured), general manager of the IBM ecosystem.
[RELATED: Channel Chief Kate Woolley: ‘No Better Time To Be An IBM Partner’]
Partners now have access to sales and technical badges showing industry expertise, according to a blog post Tuesday. Badges are shareable on LinkedIn and other professional social platforms. IBM sales representatives and partners will receive new content at the same time as it becomes available.
“This is the next step in that journey in terms of making sure that all of our registered partners have access to all of the same training, all of the same enablement materials as IBMers,” Woolley told CRN. “That’s the big message that we want people to hear. And then also in line with continuing to make it easier to do business with IBM, this has all been done through a much improved digital experience in terms of how our partners are able to access and consume.”
Among the materials available to IBM partners are scripts for sales demonstrations, templates for sales presentations and positioning offerings compared to competitors, white papers, analyst reports and solution briefs. Skilling and enablement materials are available through a new learning hub IBM has launched.
“The partners are telling us they want more expertise on their teams in terms of the IBM products that they‘re able to sell and how equipped they are to sell them,” Woolley said. “And as we look at what we’re hearing from clients as well, clients want that. … Our clients are saying, ‘We want more technical expertise. We want more experiential selling. We want IBM’ – and that means the IBM ecosystem as well – ‘to have all of that expertise and to have access to all the right enablement material to be able to engage with us as clients.’”
The company has doubled the number of brand-specialized partner sellers in the ecosystem and increased the number of technical partner sellers by more than 35 percent, according to IBM.
The company’s latest program changes have led to improved deal registration and introduced to partners more than 7,000 potential deals valued at more than $500 million globally, according to IBM. Those numbers are based on IBM sales data from January 2022 to August.
Along with the expanded access to training and enablement resources, Woolley told CRN that another example of aligning the IBM sales force and partners was a single sales kickoff event for employees and partners. A year ago, two separate events were held.
“I want our partners to continue to feel and see this as a big investment in them and representative of how focused we are on the ecosystem and how invested we are,” she said.
A four-year bachelor’s degree has long been the first rung to climbing America’s corporate ladder.
But the move to prioritize skills over a college education is sweeping through some of America’s largest companies, including Google, EY, Microsoft, and Apple. Strong proponents say the shift helps circumvent a needless barrier to workplace diversity.
“I really do believe an inclusive diverse workforce is better for your company, it’s good for the business,” Ginni Rometty, former IBM CEO, told Fortune Media CEO Alan Murray during a panel last month for Connect, Fortune’s executive education community. “That’s not just altruistic.”
Under Rometty’s leadership in 2016, tech giant IBM coined the term “new collar jobs” in reference to roles that require a specific set of skills rather than a four-year degree. It’s a personal commitment for Rometty, one that hits close to home for the 40-year IBM veteran.
When Rometty was 16, her father left the family, leaving her mother, who’d never worked outside the home, suddenly in the position to provide.
“She had four children and nothing past high school, and she had to get a job to…get us out of this downward spiral,” Rometty recalled to Murray. “What I saw in that was that my mother had aptitude; she wasn’t dumb, she just didn’t have access, and that forever stayed in my mind.”
When Rometty became CEO in 2012 following the Great Recession, the U.S. unemployment rate hovered around 8%. Despite the influx of applicants, she struggled to find employees who were trained in the particular cybersecurity area she was looking for.
“I realized I couldn’t hire them, so I had to start building them,” she said.
In 2011, IBM launched a corporate social responsibility effort called the Pathways in Technology Early College High School (P-TECH) in Brooklyn. It’s since expanded to 11 states in the U.S. and 28 countries.
Through P-TECH, Rometty visited “a very poor high school in a bad neighborhood” that received the company’s support, as well as a community college where IBM was offering help with a technology-based curriculum and internships.
“Voilà! These kids could do the work. I didn’t have [applicants with] college degrees, so I learned that propensity to learn is way more important than just having a degree,” Rometty said.
Realizing the students were fully capable of the tasks that IBM needed moved Rometty to return to the drawing board when it came to IBM’s own application process and whom it was reaching. She said that at the time, 95% of job openings at IBM required a four-year degree. As of January 2021, less than half do, and the company is continuously reevaluating its roles.
For the jobs that now no longer require degrees and instead rely on skills and willingness to learn, IBM had always hired Ph.D. holders from the very best Ivy League schools, Rometty told Murray. But data shows that the degree-less hires for the same jobs performed just as well. “They were more loyal, higher retention, and many went on to get college degrees,” she said.
Rometty has since become cochair of OneTen, a civic organization committed to hiring, promoting, and advancing 1 million Black individuals without four-year degrees within the next 10 years.
If college degrees no longer become compulsory for white-collar jobs, many other qualifications—skills that couldn’t be easily taught in a boot camp, apprenticeship program, or in the first month on the job—could die off, too, University of Virginia Darden School of Business professor Sean Martin told Fortune last year.
“The companies themselves miss out on people that research suggests…might be less entitled, more culturally savvy, more desirous of being there,” Martin said. Rather than pedigree, he added, hiring managers should look for motivation.
That’s certainly the case at IBM. Once the company widened its scope, Rometty said, the propensity to learn quickly became more of an important hiring factor than just a degree.
This story was originally featured on Fortune.com
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Investors this year increasingly turned away from dividend stocks in favor of the rising yields being offered on bonds. Given that investors can now earn a 4.3% return on a 2-year Treasury note, many prefer that guaranteed return to the risks of putting money into the stock market.
International Business Machines (IBM 1.87%) offers a dividend yield that exceeds that bond return. But with a bear market in progress, are investors better served to take a chance on the cloud stock or to take the 4.3% return at virtually zero risk?
IBM and its dividend
IBM didn't participate in the bull market of the 2010s. The stock dropped as its tech businesses suffered a considerable growth slowdown. In an effort to change that, IBM pivoted into the cloud computing sector aggressively, in part via its $34 billion purchase of Red Hat in 2019. Grand View Research forecasts a compound annual growth rate of 16% through 2030 for the cloud industry. Growth like that could certainly help both IBM and its stock.
Also, IBM spun off its managed infrastructure business into a new public company, Kyndryl. This business was less of a fit with the parent company amid its pivot to the cloud. Separating it off should make it easier for IBM to grow its revenue.
Time will tell if these moves can help the stock price recover. Nonetheless, IBM currently pays its shareholders $1.65 per share every quarter, or $6.60 per share annually. At the current stock price, that adds up to a yield of 5.6% per year. Moreover, depending on your financial situation, the IRS may tax your dividends at a lower capital gains rate, which can offer an added advantage.
Additionally, IBM hiked its payout annually for 27 consecutive years, making it a Dividend Aristocrat. That status carries some importance as many income investors will be more inclined to buy and hold IBM stock because of this status. Also, since abandoning Dividend Aristocrat status tends to hurt a stock, management will probably prioritize maintaining it by continuing to raise those payouts.
Investors also can also reinvest their dividend payments into more IBM stock. However, such newly purchased shares will pay you the dividend yield at that time. The return will rise if the stock falls since investors can buy the exact cash return at a lower price. Conversely, cash yields will drop if the stock rises, but those investors still benefit since the stock has increased in value.
What to know about 2-year Treasury notes
U.S. Treasury notes offer more stability than stocks such as IBM. Investors who purchase the 2-year Treasury note receive semiannual interest payments. At the current interest rate of 4.3%, investors will receive a 2.15% cash return on their invested amount in each of the subsequent three six-month periods. In the fourth period, when the note matures, investors receive the final 2.15% payment along with the return of their principal.
Investors should also be aware that bond values can fluctuate. If interest rates drop, the value of the bond will fall; the opposite will happen if rates rise. This affects investors if they decide to sell the bond early. Upon maturity, the note will return to its par (or nominal) value.
Additionally, bond interest payments are subject to federal income tax but exempt from state and local taxes. In some cases, this is higher than taxes on dividends. Still, bond issuers are obligated to make such payments. In contrast, IBM faces no legal obligation to continue its dividend.
Also, like with a stock, investors can reinvest their interest payments into more notes or other forms of Treasury bonds. However, those purchases will be subject to the prevailing interest rates at that time.
IBM or the 2-year Treasury note?
Investors who lack much risk tolerance should choose the Treasury note. Given its guaranteed return, they will not have to worry about volatility.
Nonetheless, for investors comfortable with buying stocks, IBM is a surprisingly strong buy. The cloud industry is in growth mode, which should propel IBM stock to a long-awaited turnaround. Moreover, IBM has repeatedly shown it wants to hold on to its Dividend Aristocrat status. This should supply its income investors returns that are not only larger than the bonds offer, but also likely to increase in size.
Will Healy has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Founded in 1911 as a Computing-Tabulating-Recording Company, International Business Machines (IBM) needs to keep its finger on the pulse of the development of information technology not to be ousted by younger tech giants like Google, Microsoft, Apple, and Amazon. With the advent of the internet, IBM needed to widen the spectrum of its products and services to retain its strong position in the tech field. Although the company lost its dominance, having only a 5% market share in 2021, as opposed to 68% shared by Microsoft, Amazon, and Google, it has many spectacular achievements to its credit. IBM holds more patents than any other technology company and takes pride in employees who have earned five Nobel Prizes, four Turing Awards, five National Medals of Technology, and five National Medals of Science. And it had been the top tech company for longer than any of the titans dominating the market now.
Also called “Big Blue,” IBM indeed has an impressive pedigree. After starting to produce hardware at the beginning of the last century, it thrived in this business for decades and became the leading supplier of mainframe computers worldwide. IBM’s gross income had inexorably grown in the last part of the twentieth century, expanding from $14.450 billion earned in 1975 to $71.940 billion made in 1995. The company’s revenue skyrocketed to the record level of $106.9 billion in 2011, after which it has steadily been declining amidst its transition into new technologies and lines of business. To move with the times and survive the competition from other tech titans, IBM gradually shifted its focus from hardware to software and services. It began to devote more energy and money to cloud-based services and cognitive computing. IBM focuses now on offering primarily network services, application services, cloud services, digital workplace services, business processes and operations, technology consulting services, and AI services. IBM Watson, a cognitive system capable of answering questions posed in natural language, has become the company’s high-visibility offering in the technology field. IBM has a strong faith in Watson, promoting the system as a benevolent digital assistant that would help hospitals, offices, factories, and farms. The company’s white paper referred to Watson as “the future of knowing.”
To see how well IBM has prepared for, what it calls, the new age of understanding, study the statistical data presented below.
IBM’s Outstanding Achievements
- In 1891, IBM, then called CTR, invented the computing scale that could show both the weight and the proportionate price of the product simultaneously.
- In 1888, the company invented the Time Clock, a device that records start and end times for hourly employees. Then, it designed the punch card base data processing machines. IBM is also responsible for inventing the magnetic stripe technology and the Universal Product Code.
- IBM designed and developed the first smartphone in the world, launching it in November 1992. Designed by IBM and manufactured by Mitsubishi Electric, the device had a touchscreen, a calculator app, email capability, 2 MB RAM, and 2 MB internal storage. There were about 50,000 of these smartphones sold for $899 a unit.
- IBM also revolutionized the computer industry, inventing DRAM, floppy disk, SQL programming language, ATMs, and hard disk drives.
- IBM also invented the first personal computer, known as the IBM PC. It was launched in August 1981 and acquired by many companies before PCs were commercialized.
- Since 1920, IBM has received 151,302 US patents. In 2019, the company received a staggering amount of 9,262 US patents. A year later, IBM beat the record of most US patents received by a business for 27 consecutive years. In 2021, IBM had 1,811 patents granted, while this year it has so far received 492 patents.
- IBM has long worked with NASA. Although IBM contributed to many missions, the most memorable is landing on the Moon in 1969. IBM’s responsibility was to develop the software and various programs, build computers, and streamline the mission for NASA.
- One of the fascinating inventions of IBM is the Scanning Tunnelling Microscope developed in 1981 for imaging at the atomic level. Gerd Binnig and Heinrich Rohrer received the Noble Prize in Physics in 1986 for the invention.
- IBM developed several chess computers, the most popular of which is Deep Blue. In 1996, Deep Blue beat the chess world champion, Garry Kasparov, who accused IBM of cheating. IBM declined Kasparov’s offer of a rematch.
- IBM invented the ASME (The Anatomic and Symbolic Mapper Engine) that offers a 3D interactive avatar of the human body to doctors in real-time, helping them visualize patients’ medical records.
- Big Blue made LASIK eye surgery mainstream.
- The company invented the IBM 2990 Blood Cell Separator, designed to harvest white blood cells from blood donors to support patients with leukemia. Later, IBM engineers improved the device, introducing its more sophisticated version, IBM 2997.
- IBM offers the IBM LinuxONE for cloud computing solutions. This powerful computer system can manage the work of 1000×86 servers simultaneously on a single platform.
IBM Statistics in 2022
- Over 90% of credit card transactions are processed by IBM mainframes.
- About 80% of global retailers use IBM retail solutions in their stores and for online sales.
- Over 80% of travel reservations are processed through an IBM product.
- Nearly 97% of banks worldwide use IBM products.
- There are 245,000 IBM employees worldwide in 2022.
- IBM employees live in 170 countries.
- There are 130,000 IBM employees in India.
- 3,000 researchers are working in IBM’s fifteen laboratories around the world.
- During the pandemic, between 2020 and 2021, IBM reduced the number of its employees by around 0.24%.
- Over 29% of IBM managers are women.
- There are an average of 108 applications per available job position at the company.
- Every day, IBM handles 70 billion security events.
- Every second, it manages 8.18 million security events.
- Over 27.3 million people use the IBM website every month.
- The IBM website has a bounce rate of 52.66%.
- In 2020, IBM’s earnings hit about $73 billion.
- In 2021, its global revenue diminished by 22%.
- Almost half of IBM’s revenue is generated in the North American market.
- IBM bought Red Hat for $33.4 billion.
- Cognos was purchased by IBM for $4.9 billion in 2008.
- Big Blue acquired SoftLayer Technologies in 2013 reportedly for $2 billion.
- To date, IBM has acquired more than 183 companies.
Facts about IBM’s Incumbent CEO, Arvind Krishna
- Arvind Krishna became IBM’s CEO in 2020, arriving with the mission to reverse the company’s decline. He is expected to create a new line of business that would rediscover IBM’s former glory.
- Before becoming the company’s CEO, Krishna worked as the Senior Vice President for IBM’s cloud and cognitive software. He developed IBM’s security software business.
- Krishna was the general manager of IBM Systems and Technology Group’s development and manufacturing organization. He also managed IBM’s acquisition of Red Hat and supervised its synergy with IBM.
- Krishna is the co-author of 15 patents and has been the editor of IEEE and ACM journals. He has received distinguished alumni awards from IITK and the University of Illinois, where he completed his PhD. His scholarly articles appear in numerous journals.
- Krishna leads the IBM business unit that provides the cloud and data platform. His responsibilities include IBM Research, IBM Cloud, and IBM’s security and Cognitive Application business.
- Krishna guides IBM’s overall strategy in core and emerging technologies including AI, quantum computing, blockchain, cloud platform services, data-driven solutions, and nanotechnology.
- IBM Chairman and CEO Arvind Krishna was paid $17.5 million for 2021, up from $17 million paid in the year before, according to IBM’s 2022 Notice of Annual General Meeting and Proxy Statement.
- In 2021, IBM’s board approved an annual incentive payment of $2.9 million to Krishna for the 2021 performance, which was 98% of the target.
- The estimated net worth of Arvind Krishna was about $27.4 million in June 2022. He also owns over 21,803 units of International Business Machines stock worth over $23,629,581.
Source: Fortune
IBM’s Annual Revenue since 2000
Once an unparalleled tech giant, IBM has been struggling for the last decade. It had to adjust to the changing world by selling its low-margin businesses and investing in high-margin ones. To implement its strategies, Big Blue sold IBM WebSphere Commerce to HCL Technologies in 2018 and a part of the Watson Health business at the beginning of this year. Although IBM’s earnings are still high, they do not reach the levels hit between 2006 and 2012. The company’s annual revenue skyrocketed to $106.9 billion in 2011, whereas it was only $57 billion last year. In the second quarter of 2022, IBM’s earnings dropped below expectations. IBM’s falling fortune is reflected in the table below:
IBM’s Annual Revenue since 2000 (in $US Billion)
| Year | Annual Revenue (in $US Billion) |
| 2000 | $88.4 |
| 2001 | $83.07 |
| 2002 | $81.19 |
| 2003 | $89.13 |
| 2004 | $96.29 |
| 2005 | $91.13 |
| 2006 | $91.42 |
| 2007 | $98.79 |
| 2008 | $103.63 |
| 2009 | $95.76 |
| 2010 | $99.87 |
| 2011 | $106.92 |
| 2012 | $104.51 |
| 2013 | $99.75 |
| 2014 | $92.8 |
| 2015 | $81.74 |
| 2016 | $79.92 |
| 2017 | $79.14 |
| 2018 | $79.59 |
| 2019 | $57.71 |
| 2020 | $55.18 |
| 2021 | $57.35 |
| 2022 (Q1; Q2) | $14.2 billion; $15.5 billion |
IBM’s Annual Revenue by Segment for 2020-2021
Big Blue has repeatedly changed the segment reporting to reflect its move away from being hardware, software, and service company towards becoming a cognitive solutions and cloud platform company. It changed its segment reporting in 2016, 2019, and 2021. The last change was dictated by IBM’s need to align its segment reporting with its platform-centric approach to hybrid cloud and AI. There are presently six segments in IBM’s business: Technology Services and Cloud Platforms, Infrastructure, Software, Consulting, Financing, and Other. In 2021, IBM’s software segment generated $24.14 billion of its global revenue of $57.35 billion. In 2022 so far, the Software division earned $5.77 billion and $6.2 billion, in the first and second quarters, respectively. The Consulting sector brought the company $4.83 billion in Q1 and $4.8 billion in Q2 of the current year. The revenue earned by the Infrastructure segment amounted to $3.22 billion in the first quarter and $4.0 billion in the second quarter. Revenues generated by IBM’s segments in the last two years are shown in the table below:
IBM’s Annual Revenue by Segment for 2020-2021 (in $US billion)
| Segment | 2020 | 2021 |
| Software | $22.93 | $24.14 |
| Consulting | $16.26 | $17.84 |
| Infrastructure | $14.53 | $14.19 |
| Financing | $0.98 | $0.77 |
| Technology Services and Cloud | $25.00 | $28.00 |
| Other | $0.49 | $0.41 |
Source: Statista
Worldwide Market Share of Cloud Infrastructure Providers in Q2 2022
In the second quarter of 2022, IBM’s Cloud Infrastructure had only a 4% share of the worldwide market, lagging behind Amazon, Azure, and Google Cloud. The spending on global cloud infrastructure services soared to $55 billion and thus brought the industry’s total for the twelve months to more than $203.5 billion. Outshining IBM, Amazon and Microsoft together accounted for more than half of cloud infrastructure revenues in the three months that ended on June 30.
These figures show how much Big Blue fell from grace because, in the past, it used to enjoy the leading position. In 2017, IBM reported cloud revenue growth of 33% year-over-year in its first quarter earnings. In that quarter, its cloud revenue jumped to $3.5 billion. IBM’s total cloud revenue over the past 12 months that year hit $41.6 billion and catapulted IBM to the top of the list in the field of enterprise cloud. In the first quarter of 2017, today’s winners were obliged only to trail behind with lower earnings: Microsoft with $14 billion, Amazon with $12.20 billion, and Google with $10 billion. The latest market share of the main providers of cloud infrastructure can be seen in the table below:
Worldwide Market Share of Cloud Infrastructure Providers in Q2 2022
| Company | Market Share |
| AWS | 34% |
| Azure | 21% |
| Google Cloud | 10% |
| Alibaba Cloud | 5% |
| IBM Cloud | 4% |
| Salesforce | 3% |
| Tencent Cloud | 3% |
| Oracle Cloud | 2% |
IBM’s Annual Net Income since 2009
Net income is defined as a company’s net profit or loss after it has accounted for all its revenues, income items, and expenses. IBM’s net income for the quarter ending on June 30, 2022, was $1.292 billion, which constituted a 5.06% jump year-over-year. The company’s net profit for the 12 months ending on June 30, 2022, was $5.588 billion, demonstrating an increase of 4.76% year-over-year. Last year, IBM’s annual net income reached $5.743 billion, a 2.74% surge from 2020. The first year of the pandemic brought IBM a net income of $5.59 billion, which was a whopping 40.73% drop from 2019. In 2019, IBM’s annual net profit was $9.431 billion, an 8.05% advance from 2018. The uneven trajectory of IBM’s annual net income is drawn in the table below:
IBM’s Annual Net Income since 2009 (in $US Billion)
| Year | Net Income in $US Billion |
| 2009 | $13.425 |
| 2010 | $14.833 |
| 2011 | $15.855 |
| 2012 | $16.604 |
| 2013 | $16.483 |
| 2014 | $12.022 |
| 2015 | $13.190 |
| 2016 | $11.872 |
| 2017 | $5.753 |
| 2018 | $8.728 |
| 2019 | $9.431 |
| 2020 | -$5.590 |
| 2021 | $5.743 |
IBM’s Number of Employees Worldwide from 2000 to 2022
IBM is the fifth largest employer in the United States. In 2021, the company employed 282,000 people worldwide. This year, the number of people working for Big Blue dipped to 245,000. As the company has lately been struggling, experiencing drops in its revenues, it is trying to restructure its business and be on par with such tech giants as Amazon, Microsoft, Google, and Apple. Hence the decline in the number of its employees this year. The table below shows how the number of IBM’s employees has changed over the years:
IBM’s Number of Employees Worldwide from 2000 to 2022 (in 1,000s)
| Year | Number of Employees (in 1,000s) |
| 2000 | 316.3 |
| 2001 | 319.88 |
| 2002 | 315.89 |
| 2003 | 319.27 |
| 2004 | 329 |
| 2005 | 329.37 |
| 2006 | 355.77 |
| 2007 | 386.56 |
| 2008 | 398.46 |
| 2009 | 399.41 |
| 2010 | 426.75 |
| 2011 | 433.36 |
| 2012 | 434.25 |
| 2013 | 431.21 |
| 2014 | 379.59 |
| 2015 | 377.76 |
| 2016 | 380.3 |
| 2017 | 366.6 |
| 2018 | 350.6 |
| 2019 | 352.6 |
| 2020 | 345.9 |
| 2021 | 282.1 |
| 2022 | 245 |
Source: Statista
Conclusion
As the world is facing a probable recession, analysts believe that the enterprise tech sector will still continue going strong. People who are tech-savvy will turn to IBM in these unpleasant times to help them survive in a tighter economic environment and use the company’s software, consulting, and infrastructure to work productively during an economic decline. Big Blue can definitely provide the products and services people will need in the near future. IBM’s Q2 2022 results signify that technology spending in such spheres as AI, cloud, automation and networking is steady. The company beat anticipated results in the second quarter and boasted its first double-digit quarterly revenue growth in more than a decade. Automatic calculations conducted at Coinpriceforecast.com inspire faith in the company’s future and the cost of its stock. At the beginning of the year, IBM’s stock price was $116.92. At the time of writing, IBM is trading at $118.81, thus demonstrating a 2% jump from January 2022. Coinpriceforecast.com foresees that by Christmas, IBM will surge to $138. In the first half of 2023, the price of the stock might advance to $145 and end the next year at $155, adding 30% to today’s price. Whether or not these predictions prove to be correct, IBM will surely continue pushing technology and innovation forward, as it has spectacularly done since the beginning of the twentieth century.
Cloud News
Wade Tyler Millward
‘I want to increase the number of clients, also, not just wallet share,’ IBM CEO Arvind Krishna says at The Channel Company’s Best of Breed conference in Atlanta. ‘That means that we need your help. We are not going to go there directly at all.’
Under Arvind Krishna’s watch, IBM has decreased the number of direct customers from about 5,000 in 2020 to about 400, the CEO told a crowd Monday. And the tech giant plans to leave potential new clients to partners.
“I want to increase the number of clients, also, not just wallet share,” Krishna said. “That means that we need your help. We are not going to go there directly at all.”
The CEO of Armonk, N.Y.-based IBM discussed his company’s investment in partners, the integration of subsidiary Red Hat, encouraged partners to raise their prices given the inflationary economic environment and even weighed in on chipmaker Broadcom‘s pending acquisition of cloud vendor VMware at CRN parent The Channel Company’s 2022 XChange Best of Breed (BoB) conference in Atlanta.
Krishna was on stage responding to questions from The Channel Company Founding Partner Robert Faletra and CRN Executive Editor of News Steven Burke.
[RELATED: IBM Assimilates Red Hat Storage Technology Into Own Storage Business]
Mark Wyllie, CEO of Boca Raton, Fla.-based IBM partner Flagship Solutions Group, told CRN in an interview that he’s glad to hear IBM plans to continue integrating different parts of the Red Hat business.
Earlier this month, IBM announced that it had absorbed storage technology and teams from its Red Hat business to combine them with IBM’s own storage business unit as a way to help clients take advantage of the two without requiring extra integration or having to deal with multiple sales teams.
Wyllie wants to see IBM further integrate Red Hat services into its portfolio to help partners push the services out to existing IBM customers.
“I think that’d be a benefit to us and IBM,” Wyllie said.
Red Hat’s autonomy within IBM has been essential to its position as an open source software vendor. Krishna clarified Monday that the Red Hat brand will stay in areas where it has a stronger brand than IBM. For storage, “maybe we already have a storage channel, which Red Hat kind of didn’t,” Krishna said.
He said IBM gave Red Hat more security and management capabilities after its acquisition in 2019. Partners can expect more integration between Red Hat and IBM in areas involving Linux.
“So if you can take maybe 50,000 Linux servers and consolidate them using OpenShift on LinuxOne, maybe that‘s a play to be made,” Krishna said. “There’s a few clients who have woken up to that and are doing it right now. So I think that’s going to be a really big play you’re going to see.”
During his talk, Krishna encouraged partners to explore more opportunities in IBM’s artificial intelligence operations (AIOps) offerings, including Turbonomic, Watson AIOps and Instana.
Customers will continue to spend on automation tools, he said.
“The ability to go into an enterprise and tell them, ‘Look, we can do things a lot more automated. We can take some cost out. We can do monitoring, and eventually go closed loop on AI’ – which I don‘t think is happening yet,” Krishna said. “I think is a massive opportunity given the current labor market.”
IBM’s security offerings, as well as Red Hat and containerization offerings, are also areas for partners to invest in, Krishna said.
As for Broadcom and VMware, Krishna said that VMware remains an important partner for his company. And as long as VMware keeps investing in its products, it should remain “a strong franchise.”
“I think it’ll come down to what is going to happen in 2023 and 2024,” Krishna said. “As long as they keep innovating on the products, they keep giving more function back to their clients – it’s a strong franchise. That falls away, then that‘s a different question. But I think the virtualization world likes those products. Now it’s up to them to keep innovating.”
Krishna also told partners they should raise prices to cover the growing cost of labor with such high inflation in the U.S.
“From our conversations with clients, I would tell you that nobody loves it, but they all understand,” he said. “Because most of our clients are doing the same out to their clients. … Pricing power comes down to something simple. Is the product highly valuable and is it sticky? … In a world of fewer skills, if you have the skills, you can price those skills.”
