When you’ve been around for more than a century, have tens of thousands of patents and spend $6 billion annually on R&D, you would think you will always be ahead, but that’s not the case. The business world is full of examples of companies that have relinquished their top spot when they seemed invincible. Recent companies that come to mind include Nokia (News - Alert), BlackBerry and Sony. While IBM is still very strong, the past six quarters have been slow and many pundits in the tech and financial sector have been – very prematurely I might add – beating the drum for the demise of Big Blue.
This drum beat is primarily being driven by IBM (News - Alert)'s lack of foresight into cloud computing. The hardware business, which the company depends on heavily, has been declining while cloud has been steadily growing. The coming year is also being predicted as a very strong and disruptive year as more organizations continue to adopt cloud technology.
All of this migration to the cloud is affecting many segments in which IBM is a major player, and for that reason, the company is making large investments in cloud services. Although the company is playing catch-up as of this moment, it won't be long before many of the customers the company has amassed over the years stay with Big Blue because of the quality of products and services it is known for.
Very few companies or even countries can invest $6 billion annually on R&D, and what this means for all cloud service providers is IBM will eventually – sooner than later probably – hold a top spot in cloud computing.
"IBM's commitment to invention and scientific exploration is unmatched in any industry, and the results of this dedication to enabling innovation is evidenced in our nearly two decades of U.S. patent leadership,” said Ken King, general manager of Intellectual Property and vice president of Research Business Development at IBM. “The inventions we patent each year deliver significant value to IBM, our clients and partners, and demonstrate a measurable return on our approximately $6 billion annual investment in research and development."
In June the company paid around $2 billion for SoftLayer (News - Alert) Technologies, which has a global network of more than a dozen data centers, and more acquisitions are to follow according to company sources. More data centers means more assets for delivering cloud services around the world.
What IBM has going for it is that very few companies are able to compete with it financially, and even fewer when it comes to intellectual property. And while the competition is strong in cloud computing, it can be overcome with the resources IBM has. With access to many products and infrastructure services that other cloud providers can only dream about, IBM will be introducing a new level of cloud technology service offering customers across the board more solutions than anyone.
So all we have to do is wait to see the rollout of the company's new cloud offerings in February, as well as future services in gaming and other sectors that IBM is going after.
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