Irving Wladawsky-Berger

Some Thoughts on Digital Convergence

The Consumer Electronics Show (CES), which took place in Las Vegas at the beginning of the year, is not one I have ever attended or followed closely through the years.  It is primarily about consumer products, mostly for the home, and while I am personally very interested in the area it is not one I have been much involved in professionally.      

This year, though, as I read press articles about CES, I sensed that something was changing.  The "gadgets" have grown up for sure.  They have not only gone digital and added more and more capabilities, but they are now based on computing technologies that just a few short years ago would have been found only in high-end PC's.  But the biggest change that caught my attention was the focus on connectivity, integration and open standards - all areas that I generally associate with IT systems not consumer products. 

It's a (Globalized) Jungle Out There

At times during the last several years I have felt that the business world is being pounded by what seems like a succession of asteroids, in the form of competitive threats and new challenges. These asteroids, much like those that pummeled the earth in the distant past, leave behind a drastically changed landscape, making what seemed like a jungle before even more forbidding.  Those companies that do not adapt to the major changes taking place will be left behind, their place taken by new companies born from the new competitive landscape.  One such "asteroid" or disruptive force is globalization. 

I just read a very good article on this theme - "Are You Enjoying Globalization Yet?" -  in the Mercer Management Journal, which is published by Mercer Management Consulting.  The basic premise of the authors - Adrian Slywotzky, Peter Baumgartner, Larry Alberts, and Hanna Moukanas - is that "Globalization is changing the nature of competition and value creation in ways more subtle and fundamental than simply cost. By incubating scores of new business models that can unseat established companies, globalization is creating opportunities for new value creation and highly profitable growth at the two ends of the value chain––new customer connections at one end and new models of innovation at the other."

IBM’s Linux Initiative

It's funny what associations particular times of the year can bring to mind. For me, one of the things the time around Thanksgiving has come to mean is the formation of the Internet Division ten years ago -- a time I recently wrote about.  And the December holidays and New Year period, among all their other meanings, remind me of IBM's embrace of Linux.  It was over this time that we organized this groundbreaking effort six years ago.

In retrospect, it's remarkable how rapidly this all coalesced. Personally, I first started hearing seriously about Linux from people in the supercomputing community early in 1999, although I was aware that some Linux activities were already underway in our labs in IBM.  Universities and research institutions were using clusters of Intel processors running Linux as a way of building relatively inexpensive and increasingly powerful supercomputers.  So were fields like seismic processing and life sciences, whose applications were well suited to parallel Linux clusters.  At the same time, Linux-based systems were becoming popular in all kinds of Internet infrastructure applications, such as web servers, file and print servers, and network firewalls. 

The 39th Hawaii International Conference on Systems Sciences

The first week in January I attended the Hawaii International Conference on Systems Sciences (HICSS) where I was honored to be “Distinguished Lecturer” and spoke on the theme of Innovation in the 21st Century (abstract in page 8 of the conference program).  HICSS is sponsored by the College of Business Administration of the University of Hawaii and has been held every year since 1968, making it one of the longest running conferences in the field.  Papers were presented in nine different tracks, ranging from Collaboration Systems to Internet and the Digital Economy to Software Technology. 

Big Blue Bit by the Blogging Bug

Earlier this week, the Journal News published an interesting article on IBM's blogging initiative  - Big Blue Bit by the Blogging Bug  written by reporter Julie Moran Alterio, who interviewed me for the article. 

She asked me why IBM encouraged its employees to participate in the blogging community, to which I replied that "We absolutely recognize that blogging, just like the Internet, World Wide Web, Linux and open source, is a major initiative in the marketplace that we should be part of. The best way to be part of it is not to observe it passively but to do it actively."  I also commented on the difference between blogs and other more institutional, less personal forms of communication: "Even if you're writing about mainframes or you're writing about XML, it's your personal style that comes across. What you choose to write about is which of the contents of your head are you sharing with the world" 

In addition to focusing on IBM's blogging initiative, the article discusses the general topic of blogs by business people and corporations.  Commenting that many corporations are worried about the potential negative impact of blogs by disgruntled customers, David Sifry, founder and CEO of Technorati, a leading search engine for the blogosphere, said that  "In the world of the Internet, you don't own your brand. Your customers and your users own your brand. You're lucky if you get to shepherd it. That loss of control is very scary."  Sifry also said that the number of corporate bloggers is growing, with about 15,000 doing so as of a survey six months ago.  "We're still very much in the early stages of how corporations are learning to use blogs," he added.

This very much reminds me of the situation ten years ago when businesses started to seriously embrace the Internet and World Wide Web.  I remember that lots of businesses were at first nervous about going on-line and providing Internet access to their applications and information to everyone out there, as well as letting their employees connect to the Internet at work.  They feared a similar loss of control, pretty much like how David Sifry describes the fear many businesses now have toward blogging and similar new collaborative innovations that are increasingly  empowering individuals and communities. 

While the particulars might be different, I have no doubt that businesses will have to learn to embrace these emerging Internet-based market forces just like they did ten years ago.  It will be fascinating to see how it all develops this time around. 

 

Improving Patent Quality as a Community

This week, the United States Patent and Trademark Office (USPTO) released its annual list of the top patentees, and with almost 3000, IBM earned more U.S. patents than any other company for the thirteenth consecutive year.   This is the eighth consecutive year IBM has received more than 2,000 U.S. patents.  Our patent leadership reflects a culture of innovation at IBM of which we are justifiably very proud.  But just as we did last year, we think it's important to use this leadership opportunity to help organize and call attention to some very important programs.

A year ago at this time, we made a patent pledge that granted access to more than 500 software patents to individuals and groups working on open source software like Linux.  This year, in partnership with the US patent office, the Open Source Development Labs (OSDL) and members of the open source software community and academia, we are announcing a set of initiatives to apply the power of communities to improve patent quality.

Let Go to Grow

My colleague Linda Sanford has just published a book, Let Go to Grow: Escaping the Commodity Trap, co-written with Dave Taylor.  The book's basic premise is that the Internet, globalization, and deregulation have given rise to an ultra-competitive marketplace in which many products and services have become commodities.  It then presents a sequence of management principles to not just help a company survive the commodity threat, but actually turn it into a growth opportunity by letting go of outdated business models and management systems and bringing innovation into all aspect of the business.

Managing Innovation

I recently read a provocative article, Money isn't Everything (free access, registration required), in Strategy + Business, a magazine published by Booz Allen Hamilton, the consulting firm.  The authors studied the top 1000 publicly held companies that spent the most in R&D in 2004 and concluded that "There is no relationship between R&D spending and the primary measures of economic or corporate success, such as growth, enterprise profitability, and shareholder return."  Instead, they suggest that "Superior results, in most cases, seem to be a function of the quality of an organization’s innovation process — the bets it makes and how it pursues them — rather than the magnitude of its innovation spending."