Link: Do you need a corporate vision in government IT?

“In an organisation like a local authority this is especially tough as they are such disparate entities. Think about it, in what strange universe does it make sense for a single organisation to collect taxes, deliver social care, pick up bins and operate transport? None of these and many of the other services councils deliver have much to do with each other, apart from the coincidence of local delivery… Coming up with a single vision or operating model for such an organisation is pretty tricky therefore, which makes it less likely that transformation teams are going to get one. So, without a clear destination, what should they be doing?… I think the key is to think of councils – and other similar organisations – as groups of individual businesses, rather than a single cohesive organisation.”
Original source: Do you need a corporate vision in government IT?

Link: Agile Strategy: Short-Cycle Strategy Development and Execution

Kind of a good list of how to align short, agile cycles to longer, strategic planning. Key, I think, is understanding the stability and predictably needs of strategic planning and explaining how short agile loops increase the confidence the corporate can have in both it’s plans and better intelligence about the market and what works.

“In practice, the lack of continuous feedback loops between operational units and C-suite leaders leads to the misalignment of resources. Lack of communication makes course adjustment nearly impossible.”
Original source: Agile Strategy: Short-Cycle Strategy Development and Execution

Link: What Your Innovation Process Should Look Like

“Once a list of innovation ideas has been refined by curation, it needs to be prioritized. One of the quickest ways to sort innovation ideas is to use the McKinsey Three Horizons Model. Horizon 1 ideas provide continuous innovation to a company’s existing business model and core capabilities. Horizon 2 ideas extend a company’s existing business model and core capabilities to new customers, markets or targets. Horizon 3 is the creation of new capabilities to take advantage of or respond to disruptive opportunities or disruption. We’d add a new category, Horizon 0, which refers to graveyards ideas that are not viable or feasible.”
Original source: What Your Innovation Process Should Look Like

Link: U.S. CIO Suzette Kent: Don’t change IT modernization plan; ‘turbo boost’ it

When it comes to digital transformation, the goal of businesses is to drive profit, or more broadly, get more money. Finding government’s goal is a tad more tricky. Here’s a good, brief explanation:

‘The end goal of all this, Kent reminded the crowd, is to improve agencies’ ability to achieve their various missions, deliver “excellent” customer service and “be great stewards of taxpayer money.”’

Most people forget that last part: ensuring that the money is well spent.
Original source: U.S. CIO Suzette Kent: Don’t change IT modernization plan; ‘turbo boost’ it

Link: Dell Technologies’ “essential infrastructure” strategy

“We divested Dell services. We divested [VMware’s] vCloud Air, and really began to clean up the portfolio to drive forward Michael [Dell’s] vision that the world is going to need an essential infrastructure company. It might not be the sexiest play in IT, but absolutely at the end of the day, all this stuff has got to run on something. We’re proud to be that something.”
Original source: Dell Technologies’ “essential infrastructure” strategy

So what exactly should IBM do, and have done?

Now that IBM has ended its revenue losing streak, we’re ready to stick a halo on it:

There is no doubt, though, that there are signs of progress at IBM, which would not comment on its financial picture before the release of the earning report. So much attention is focused on the company’s top line because revenue is the broadest measure of the headway IBM is making in a difficult transformation toward cloud computing, data handling and A.I. offerings for corporate customers.

The new businesses — “strategic imperatives,” IBM calls them — now account for 45 percent of the company’s revenue. And though it still has a ways to go, IBM has steadily built up those operations — and gained converts.

Over all those quarters, there hasn’t been that much good analysis of “what went wrong” at IBM in so much as I haven’t really read much about what IBM should have been doing. What did we expect from them? What should they be doing now and in the future? I don’t know the answers, but I’m damn curious.

“State your deal.”

Since the mid-2000’s, all tech companies have been shit on for not getting to and dominating public cloud faster (there are exceptions like Adobe that get lost in the splurty noise of said shitting on). Huge changes have happened at companies HP/HPE and Dell/EMC/VMware (where I work happily at Pivotal, thank you very much), and you can see Oracle quarterly dance-adapting to the new realities of enterprise IT spending.

For the past 8 or 10 years I’ve had a rocky handle on what it is that IBM sell exactly, and in recent years their marketing around it has been fuzzy.  Try to answer the question “so what is it, exactly, that IBM sells?” A good companion is, “why do customers choose IBM over other options?”

You can’t say “solutions” or “digital transformation.” (I’m aware of some black kettle over here, but I and any Pivotal person could tell you exactly the SKUs, tools, and consulting we sell, probably on an index card). I’m pretty sure some people in IBM know, but the press certainly doesn’t know how the fuck to answer that question (with some exception at The Register and from TPM, grand sage of all IBM coverage).

I’ve been a life-long follower of IBM: my dad worked at the Austin campus, it was a major focus at RedMonk, and, you know, just being in the enterprise tech industry gets your face placed facing Armonk frequently. I feel like I know the company pretty well and have enough of an unnatural fascination to put up with spelunking through them when I get the chance; IBMers seem pleasantly bewildered when the first thing I ask them to do is explain the current IBM hierarchy and brand structure.

But I couldn’t really explain what their deal is now. I mean, I get it: enterprise outsourcing, BPaaS (or did they sell all that off?), some enterprise private cloud and the left over public cloud stuff, mainframe, a bunch of branded middleware (MQ, WebSphere, DB2, etc.) that they seem forbidden to mention by name, and “Watson.”

There are clear products & services (right?)

 

When I’ve been involved in competitive situations with IBM over the years, what they’re selling is very, very straight forward: outsourcing, software, and a sense of dependability. But the way they’re talked about in the press is all buzzwordy weirdness. I’m sure blockchain and AI could be a big deal, but their on and off success at doing something everyday, practical with it is weird.

Or, it could just be the difficulty of covering it, explaining it, productizing, and then marketing it. “Enterprise solutions” often amounts to individually customized strategy, programs, and implementations for companies (as it should, most of the time), so you can’t really wrap a clear-cut SKU around that. It’s probably equally hard to explain it to financial analysts.

So, what’s their deal?

Cumulative capex spend by Google, Amazon, and Microsoft since 2001.
How much is that public cloud in the window?

Anyhow, I don’t come here to whatnot IBM (genuinely, I’ve always liked the company and still hope they figure it out), but more out of actual curiosity to hear what they should have been doing and what they should do now. Here’s some options:

  1. The first option is always “stay on target, stay on target,” which is to say we just need to be patient and they’ll actually become some sort of “the business of AI/ML, blockchain, and the same old, useful stuff of improving how companies run IT.” I mean, sure. In that case, going private is probably a good idea. The coda to this is always “things are actually fine, so shut the fuck up with your negativity. Don’t kill my vibe!” And if this it true, IBM just needs some new comms/PR strategies and programs.
  2. You could say they should have done public cloud better and (like all the other incumbent tech companies except Microsoft), just ate it. What people leave out of this argument is that they would have had to spend billions (and billions) of dollars to build that up over the past 10 years. Talk about a string of revenue loosing quarters.
  3. As I’m fiddling around with, they could just explain themselves better.
  4. They should have gotten into actual enterprise applications, SaaS. Done something like bought Salesforce, merged with SAP, who knows. IBM people hated it when you suggested this.
  5. The always ambiguous “management sucks.” Another dumb answer that has to be backed up not with missed opportunities and failures (like public cloud), but also proving that IBM could have been successful there in the first place (e.g., with public cloud, would Wall Street have put up with them loosing billions for years to build up a cloud?)

I’m sure there’s other options. Thinking through all this would be illustrative of how the technology industry works (and not the so called tech industry, the real tech industry).

(Obviously, I’m in a weird position working at Pivotal who sells against IBM frequently. So, feel free to dismiss all this if you’re thinking that, now that you’ve read this swill, you need to go put on a new tin-foil hat because your current one is getting a tad ripe.)

Companies that loose billions have a hard time being successful

How all these unprofitable companies sustaining high valuations:

bending reality today has three elements: a vision, fast growth, and financing.

But:

A few firms other than Amazon have defied the odds. Over the past 20 years Las Vegas Sands, a casino firm, Royal Caribbean, a cruise-line company, and Micron Technology, a chip-maker, each lost $1bn or more for two consecutive years and went on to prosper. But the chances of success are slim. Of the current members of the Russell 1000 index, since 1997 only 37 have lost $1bn or more for at least two years in a row. Of these, 21 still lose money.

Source: SchumpeterFirms that burn up $1bn a year are sexy but statistically doomed