Tag Archives: IBM Erich Clementi

IBM – will US Patents or Services generate higher value by 2015

USPatent

On Thursday it was announced that IBM tops the U.S. Patent List for the 20th Consecutive Year.

“IBM announced that it received a record 6,478 patents in 2012 for inventions that will enable fundamental advancements across key domains including analytics, Big Data, cybersecurity, cloud, mobile, social networking and software defined environments, as well as industry solutions for retail, banking, healthcare, and transportation. These patented inventions also will advance a major shift in computing, known as the era of cognitive systems”. IBM Newsroom

“IBM’s flow of patents lets the computer-services giant produce about $1 billion a year in licensing revenue. The intellectual property also gives it the freedom to move into new businesses with less risk of being sued over technology”. Sarah Frier – Bloomberg

IBMstock

2015 IBM Financial Road Map

A commitment to deliver at least $20 earnings per share has been made to shareholders ($13.44 in 2011).

Earnings for 2012 will be announced this month and will show a fourth straight year of improved margins.

A $20B war chest has been allocated for acquisitions in the Cloud, Analytics, Smarter Planet, Servers and Networking areas.

By 2015 IBM estimate that Hardware/Financing = 13%, Services = 36% and Software = 50%

IBM will expand margins in a shift to higher value and deliver enterprise productivity savings of $8B.

  • Locate work to where it best can be performed.
  • Focus integrated operations on high value advisory services.
  • Continuous improvement leveraging analytics.  Enabling clients to turn oceans of data into predictive models and actionable decisions.
  • Balancing savings between re-investing and driving margin performance.

MikeDaniels

One of the key players in achieving this performance is the head of Global Services Mike Daniels.   Daniels has overseen the creation of a global delivery network and rapidly moved jobs offshore to cut expenses and increase profits.  Previously 78% of IBM employees were US based.

So he is not the most popular guy with the rank and file.

IBM in their annual 10-K filing to the Securities and Exchange Commission at the start of this year announced that Mike Daniels would be stepping down and would not be replaced.

CEO and Chairman Virginia “Ginni” Rometty issued a company email in early Jan –   “Mike is a builder. He helped create our services business, which today generates more than half of IBM’s revenue and employs more than half of our global workforce”.

“IBM announced a leadership change in its gargantuan services division, as the company said Senior Vice President and Services head Michael E. Daniels will retire on March 31 after a 36-year career with the technology giant.

IBM didn’t appoint a new singular head to lead its services division. Instead the company said responsibility for running the group would fall to its two other top executives, Bridget van Kralingen and Erich Clementi. The responsibilities are effective immediately, and both executives will report to IBM Chairman and Chief Executive Virginia M. Rometty, according to a company email.

Ms. Kralingen, 49, a rising star who was named senior vice president for IBM Global Business Services in early 2012 in one of Ms. Rometty’s first promotions, runs the group responsible for providing consulting services and the development and management of software applications.

Mr. Clementi, 54, senior vice president for IBM Global Technology Services, runs the part of the business that handles the outsourcing of technology systems and business functions such as customer relationship management”. Wall Street Journal

Bridget van Kralingen provides an insightful perspective on the impact of mobile on businesses and consumers, noting that we are now entering the third era of computing, and the first that is not led by IT, but by the consumer.

Erich Clementi talks about the the focus areas of IBM’s Global Technology Services.

WDGLL specs

6,478 US Patents were received by IBM.  It would be very interesting to know how many patents, over the last two decades, have been converted into customer facing solutions.

Samsung at #2 in the US Patent list [5,081] is rapidly closing the gap with IBM.  Samsung is focussed on the consumer and presented a prototype of the OLED screen Flexible Phone at the Consumer Electronics Show this week.   

I don’t really “get” the whole Smarter Planet campaign. IBM says it is about instrumented, interconnected, intelligent to create Smarter Commerce, Smarter Cities, Smarter Cloud etc.  

So if IBM has the most US patents does the industry believe that IBM is the most innovative company on the planet?

On 10th January the Boston Consulting Group released the Most Innovative Companies 2012 report.

“In today’s fast-changing world, innovation is more important than ever to driving organic growth and achieving competitive advantage,” noted Andrew Taylor, a Chicago-based partner and a coauthor of the report “Both are critical to generating sustained, above-average returns, especially in a turbulent economic environment.”

Boston Consulting also released the Global Innovation Index 2012 which Names the World’s 50 Most Innovative Companies. report

  • Apple has been number one every year since 2005.
  • Google has been number two every year since 2006.
  • Microsoft has been in the top ten every year since 2005.
  • IBM and Sony have been in the top ten nearly every year since 2005.

“Billions in profits are at stake for companies that can crack the code and deliver meaningful advantage from innovation, as we’ve seen from the ever-changing list of most innovative companies,” said Kim Wagner, a New York-based senior partner and a coauthor of the report”.

So US patents provide a steady stream of $1B in revenue annually.  IBM has made a commitment to deliver $8B of productivity savings by 2015.  

For me higher value will only be generated when IBM rolls out solutions for the era of the consumer, for example Google Glass, Google driverless cars etc.

That is when we will truly see a Smarter Planet.

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