Interesting read from The New York Times - a reminder that no company thrives infinitely and, in the business world, enemies don't stay as enemies forever - putting the world's largest company in the spotlight and comparing it with its once behemoth of a nemesis, IBM.
With hindsight, it’s clear that IBM’s Olympian status was part of its problem. In the 1980s, at the height of its powers, it continued to come up with scientific breakthroughs and ultrafast computers, but its focus on its own product lines and customer service flagged. IBM “naïvely” handed over crucial parts of the computer business to companies like Microsoft and Intel, while its own profit margins began to erode, D. Quinn Mills, a professor at the Harvard Business School, has written.
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For decades now, IBM has engaged in a sometimes painful transition, and as it revealed in its quarterly earnings report last week, it is still hurting: Its revenues have declined and it has endured wrenching business shifts. My colleague Steve Lohr wrote last week that IBM has been getting out of slow-growing old businesses, like personal computers, disk drives, low-end server computers and chip manufacturing — but its new initiatives in fields like data analytics, cloud computing and mobile apps for corporate customers haven’t entirely succeeded yet.
In a turnabout, IBM’s mobile app strategy relies on a partnership with the current giant, its old nemesis Apple. IBM is leveraging its prowess with supercomputers and artificial intelligence with a new initiative, Watson Health, that includes Apple. That alliance could help both companies grow — in Apple’s case, by ensuring that its products work more seamlessly in corporate environments where IBM is deeply entrenched.
Rapid growth, after all, isn’t a sure thing, especially when you’re already the biggest company in the world. IBM has proved that. Sooner or later, Apple investors will have to take that lesson to heart.
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