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Strategy

Technology über alles

Jayne Brocklehurst |

The death of Apple’s Steve Jobs has made the world reflect on how technology – not a little of that because of Jobs – has changed the way we spend our time: online, with music, just “being connected” with the world at large. It’s also an opportunity to take a look at Apple’s “seeds” and what those companies are doing today, thanks in no small part to the refocusing of the industry to which Jobs and his company contributed.

Take IBM, the granddaddy of computers and computing, a legacy company in the technology sector. The 87-year old company has also transformed itself, and now competes in the virtual world for space with online giants Amazon, Google, and the mighty Microsoft in the cloud computing arena.

If IBM’s share price (ranging US$157-190 the past three months) is anything to go by, their strategy seems to be working. Gone is their PC division, sold to China’s Levono in 2005, and in its place is a company focussed on providing data to the corporate business world on a ‘smart planet,’ as IBM Europe Chairman, Harry van Dorenmalen, describes the company’s strategy. “The world is instrumented - it’s done - everyone has their devices; the world is interconnected - that’s done - we have the internet. So the moment has come that we become intelligent - and a smarter plant is exactly what we do at IBM,” he told INSEAD Knowledge at the European Business Summit in June.

IBM’s smarter planet strategy includes data management aimed at reducing traffic congestion and improving management of the world’s water supply through data analytics. Lifestyle changing, big-scale operations.

Dorenmalen recognises smart planet growth opportunities in the emerging countries of Eastern Europe. “These countries are focussed on healthcare solutions, smarter traffic solutions etc. In Russia, for example, you have digitalised hospitals up and running.” But will all this ‘ease of use’ that van Dorenmalen aspires to (and data that is accessible across governments and countries) change the customer mix for the technology sector? IBM may have morphed into the clouds but its customer base is still the corporate world rather than the average consumer, who are the basis of Amazon’s and Google’s customers.

Companies today are buying into the notion that data can be accessed almost anywhere upon demand via company-approved devices, but consumers also have this choice through devices such as iCloud, a cloud-based service offered by Apple, allowing Apple customers to access their data on all their devices. Attila Cselotei, Chief Information Officer at INSEAD, believes it will be interesting to see how the “consumerisation” of corporate IT will impact the likes of IBM. “Up to now it was the IT managers who held the buying power in organisations, and IBM benefited from this through their established network. But more and more, the buying power will shift to the individuals - they will decide which mobile phone to use, what computer to use, where to do their work from, etc.” Could this then mean the rise of entrepreneurs and small- and medium-sized enterprises to the detriment of IBM’s traditional large corporate and government client base?

As we become more adept at accessing and sharing data, Cselotei points out the social implications of having readily accessible data, regardless of who provides it: “As we are all living our lives on gadgets, everything is recorded about us and it is recorded on remote devices and services so we are not even able to erase it. It becomes our tattoo and people will have to adjust their interactions with these devices and learn how to maintain their privacy if this is what they want to do.” He says that regulation will not be able to catch up with the changes as “the pace of technological innovation is measured in quarters or years, whereas the pace of change in legal structures is measured in decades.”

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