After a five-year journey from traditional hardware, software and services, IBM's reinvention into a data-driven business is now "largely complete," CEO Ginni Rometty boldly states in her annual letter to shareholders.
"IBM is now a cognitive solutions and cloud platform company," she adds. "IBM now possesses capabilities that are unmatched in our industry to address our clients’ most pressing needs."
Those lofty statements surface one week before IBM Think 2018, an inaugural conference that essentially melds multiple IBM conferences into one comprehensive gathering for customers, developers and partners.
No doubt, IBM's strategic imperatives -- including cloud, Watson and cognitive computing, security, social and mobile technologies -- will take center stage at the conference. Both ChannelE2E and our sister site, MSSP Alert, will be on-hand to track the partner and security milestones.
IBM Reality Check: Revenue Progress, Partner Challenges
The big question: Has IBM truly turned the corner, and completed its 'reinvention' phase?
Anecdotal evidence reveals real progress. The company's revenues recently rose for the first time in 23 quarters and beat Wall Street's expectations in Q4 2017, according to fiscal results shared in January 2018. Strategic imperative areas like cloud and security were particularly strong.
Still, Wall Street remains concerned about profit margins. Plus, it's hard to ignore overwhelming cloud momentum at Amazon Web Services and Microsoft Azure, and rising momentum at Google Cloud Platform.
Meanwhile, ChannelE2E has concerns about IBM's partner ecosystem -- particular in the classic 'channel.' A case in point: IBM never mentioned the channel -- not once -- during its earnings call in January 2018. In stark contrast, entrenched rivals like HP Enterprise and Cisco Systems sing the channel's praises during earnings calls.
Moreover, IBM mentioned partners only five times during that earnings call, and the mentions typically involved strategic relationships with the likes of MIT, Salesforce, Workday and Blue Prism. No doubt, those are critically important relationships. But IBM has largely lost touch with many SMB partners after selling off its x86 server business to Lenovo in 2014.
Perhaps IBM will debate me on the SMB partner point. One potential area case in point involves Continuum, which offers business automation tools for MSPs in the sector. Continuum's BDR (backup and disaster recovery) platform has run in IBM's cloud, and we'll be checking on that example and others at the conference.
IBM Milestones, And Social Responsibilities
In her letter to shareholders, Rometty pointed to additional milestones. They include:
- IBM operating 58 cloud data centers across 19 countries;
- 10 of the largest retail banks and nine of the top 10 retailers leveraging IBM Cloud as a service
- 100,000+ patients and consumers touched by Watson Health.
- 70 percent growth in organizations leveraging Watson
- 60 billion security events monitored each today.
- IBM safeguarding 22 of the world's 25 largest banks.
Still, Rometty communicated far more than her belief in IBM's transformation. She pointed to "an inflection point for society, everywhere in the world." She vowed that the company would step forward as a responsible steward of data and AI. "We believe that AI’s purpose is to augment, not replace, human intelligence," she wrote.
And on the job front, she conceded that technology will continue to eliminate work --as "it always has." However, "there still will be doctors, lawyers, salespeople, teachers and engineers. But the tasks and tools they need to perform their work will be different."
Rometty called for the reinvention of education, to deliver jobs of the future -- "not blue collar or white collar, but 'new collar' jobs."
IBM Think 2018: Next Moves
So what's next for IBM and its partner ecosystem? We'll see first-hand at the IBM Think conference next week in Las Vegas. We'll share our first-hand perspectives throughout the conference. See you there?