Looking ahead, Adkins identified three macro trends that will continue to make those types of investments and innovations essential for leadership in the systems business: 1) Consolidation will accelerate in the service space as "computing is delivered as a service in the cloud." 2) Data growth will trigger a corresponding need for smarter, better, and simpler data-management tools, including security, compression, and real-time access. 3) Integration: customers are demanding not just technical integration but also strategic levels of integration tailored to specific needs of companies and/or industries.
Adkins also noted that "competitive intensity out in the marketplace is at an all-time high," and said IBM's strategy around continuing to push its capabilities in the comprehensive offerings described above will provide significant challenges for primary competitors Oracle and HP.
"We'll see some of the same old things from HP and Oracle in 2011. You'll see HP talk about integration of commodity capabilities and supply chain and global reach, and they'll talk about those things because they have no choice—they've got no alternatives but to do that because they simply haven't made the necessary and extensive investments in sustainable tech portfolios," Adkins said.
"HP can't help but continue to focus on some of those same things because they haven't invested in differentiating their capabilities.
"As for Oracle/Sun, we'll also continue to hear more of the same from them: in the last year, they've embraced aggressively our point of view about the importance of integration and of delivering highly integrated and highly optimized systems. And that's a good thing," Adkins said.
"However, the challenge Oracle has is time: you don't go out and acquire a company and then immediately declare victory, and declare that you've got everything all squared away—it takes years of work to get those software and hardware teams working together. And believe me, we know that from our own experience here at IBM.
"So Oracle will continue to tell that story but the reality is that they have a one-trick pony called Exadata—that's all they have," Adkins said.
"They've had some success with it, but it doesn't scale to every need—yet, that's what they have to offer. So I think we'll be seeing lots more rhetoric about Exadata but that'll still be the only thing they've got."
Clearly, strong earnings reports inspire vigorous ideas and lofty aspirations, and Adkins clearly realizes that while HP's future strategy for high-end systems has not been established, Oracle CEO Larry Ellison has very publicly declared that it will be his company and IBM battling for leadership in the high-end systems market.
Adkins says time is Oracle's enemy, and that's something Ellison understands quite well. For CIOs, the result should be a spike in choices, more innovation, and more-attractive pricing, particularly if/when new HP CEO Leo Apotheker and his team get their high-end ideas together and begin aggressively contesting IBM and Oracle.
So it'll be fun to see if Adkins and IBM can continue to combat the one-trick pony and the reluctant investor in what is sure to be an incredibly high-stakes competition.
Bob Evans is senior VP and director of
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