109 year old IT giant splits — Lessons for you and me ?

Earlier this month (Oct 2019), IBM a 109 year old IT giant announced a major strategic decision to separate its Managed Infrastructure Services into a new company, with a placeholder name of “NewCo”. You can learn more from here.

I have been part of IBM for the past 10 years. Over the years, I have worked with numerous smart people and teams across the globe which led to continuous expansion of my professional skills. IBM as a company has given me great experiences and this news came as a surprise.

A lot has been talked and discussed about this decision but above all, it definitely reminds and signals a lot of things for us. My few key takeaways from it:

1. Re-invent Yourself:
   If we look at the 109 year history of IBM, it has divested (although “NewCo” is a spin-off) multiple times. It has done to networking in ’90s, PCs in 2000s, and semiconductors recently. It has also acquired many, recent one being the $34 Billion acquisition of Red Hat.
   IBM has been able to grow, survive and stay current by constantly re-inventing itself.
   > “Staying current is the key, be it for a billion dollar company or for you or me.”
2. Think Long-term & Take Risks:
   If you look at the announcement, the unit that will become the “NewCo” is still a thriving business unit. It clocks $19 billion as revenue, supports 75% of Fortune 100 companies and expected to be #1 Managed Infrastructure Services provider.
   Then why ? should be the first question. Per the announcement, IBM wants to focus at the $1 trillion Hybrid Cloud market, furthermore the Managed Infrastructure Services is about to see profound changes in near future.
   > ”Think towards long term opportunities, overlook short-term benefits and be bold to take risky decisions”
3. Change is Necessary and Costly:
   IBM expects the spinoff to cost roughly $2.5 billion of transaction cost in terms of tax, operation charges and others. The cost is huge, for some smaller or mid-size companies this could be their annual revenue, but for IBM this is a necessity. With change in customer needs and public cloud market, IBM has to change and embrace the future.
   For you and me, the cost may involve changing skills, teams or even promised promotions to acquire newer growth path and be of value to business.
   > “Change can be slow, or even costly but it is definite necessity to win the future, for you and me”
4. Focus on Skills or Capabilities:
   Just the name “IBM” has a huge brand value, and several IBMers across the globe including me take pride in it. Clients & business partners value this brand hugely and this definitely gives an edge.
   But as any other organization, IBM has to focus on its capabilities using which it can help the clients and remain a strong technology leader, that’s exactly what it has done. Hybrid Cloud and AI based capabilities are the future and one must acquire them.
   > “No amount of role, designation or even pay-scale can suppress the importance on individual skills or his\her impact on business. Focus on skills, and rest follows”

These are definite lessons one can learn from IBM, which started as Computing-Tabulating-Recording Company and transformed into a technology leader. All of these are my own views and very much important to anybody in IT, but this can be as relevant to anybody who wants to focus on future and stay ahead of the curve.