IBM and HP Take Different Tacks to the New Cloud

Tech giants IBM and HP recently made major cloud announcements, but the differences between the two are striking. CIO.com columnist Rob Enderle explains how HP's move was tactical and meshes with the recent leadership change, while IBM is playing the long game with artificially intelligent systems.

By Rob Enderle
Thu, April 12, 2012

CIO — HP and IBM both launched major new cloud initiatives this month, and the differences between the two efforts highlight the divergent approaches that each firm's leadership is pursuing.

Both companies see the cloud as their primary battlefield—IBM spun out PCs a decade ago and HP recently restructured the company so that personal technology and printer declines wouldn't distract senior management. But IBM's initiative is heavily strategic, which suggests the true benefits for the company will emerge in the second half of the decade. HP is more tactically focused, and is demonstrating an adjustment into an area that is closer to their new CEO's skill set.

This isn't about one approach being better than the other, but rather about how each approach defines the significant differences between the companies.

HP's Hybrid Cloud

One of the primary goals of CEOs brought in from outside is to change the company they manage to better reflect their skill set. Meg Whitman's background at eBay is tied to what became a cloud service built from the ground up to address a defined customer set. It wasn't in hardware, software or traditional IT services. HP's Hybrid Cloud adds a public cloud component to the company's more traditional hardware solutions.

While this is tactical, it responds to a current critical IT need for a public cloud service that meets corporate security and compliance requirements. It is also much closer to Whitman's core strength. This means she'll be much more likely to have a solid understanding of the new offering and add value as opposed to having to rely on other subject experts. This gives her an initiative that is truly hers and helps to turn HP into a company that better matches her unique skill set.

Just because it is tactical doesn't mean it can't be forward-looking. The Hybrid Cloud initiative anticipates the growth of companies like Google and Amazon—and the likely entry of Yahoo and others—in this space and provides a guard against their incursion into HP's markets. So it has both offensive and defensive elements and it should provide a higher likelihood of near-term revenue and profitability benefits, given that it is an area where Whitman has previously been successful.

In short, this strategy showcases HP's changing focus and the influence Whitman is bringing to the company.

IBM Expert Integrated Systems

IBM has changed CEOs as well even more recently than HP, but its succession process has been in place for the greater part of a century and the new CEO comes uniquely trained to run today's IBM. In addition, IBM has maintained a massive focus on R&D and currently leads in artificial intelligence technology with a unique division, Watson, focused on this area.

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