SERVER

By –

Jaydeep

Bhattacharya;

Simantini Samanta;

Somnath Sahu;

Wasim Akram

(PGDM – 2012-14)

IBM: International Business Machines

IBM, is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States.

The company was founded in 16th of June, 1911 by “Charles Ranlett Flint” as the Computing Tabulating Recording Company (CTR) through a merger of three companies:

(a)The Tabulating Machine Company.

(b) The International Time Recording Company.

(c) The Computing Scale Company.

INTRODUCTION:

‘Flint’ recruited “Thomas J. Watson, Sr.” from the National Cash Register Company to help lead the company in 1914.

He focused on customer service.

His favorite slogan, "THINK", became a mantra for C-T-R's (computing-tabulating-recording) employees, and within 11 months of joining C-T-R, Watson became its president.

CTR adopted the name International Business Machines in 1924.

Its distinctive culture and product branding has given it the nickname Big Blue.

In 1957, IBM developed the FORTRAN (FORMULA TRANSLATION) scientific programming language.

It is a general-purpose, imperative programming language that is especially suited to numeric computation and Scientific computing.

Fortran is still used today for programming scientific and mathematical applications.

IBM In India: IBM has been present in India since 1992.

IBM India's solutions and services span all major industries including financial services, healthcare, government, automotive, telecommunications

Products of IBM: IBM manufactures and sells computer Hardware's and Software's.

Some Software’s are:

Lotus Domino: Combines reliable, security-rich e-mail, calendar and scheduling capabilities with a powerful platform for business collaboration.

IBM Graphical Data Display Manager (GDDM): IBM Tivoli Access Manager (TAM) is  and  an authentication authorization  solution for corporate web services operating systems, , and existing applications.

Some Hardware’s Are :

Personal Computer XT/370 IBM 801  Pioneering prototype RISC processor IBM 6240 Magnetic card typewriter IBM 3268 Dot matrix printer

Details of The Market Structure What IBM Provides Today:

IBM

Application management

Service Business process

outsourcing

Enterprise mobility

IT outsourcing

Security services

Strategic staffing services

Business communication

services

Cloud servicesInformation technology

services

IT services sourcing

Technical support services

Business community

Data center services

IT infrastructure

services

IT strategy

Workplace services

Clients of IBM:

IBM has acquired 28 companies to build targeted analytics and information expertise since 2005, and continues to expand its ecosystem, which today consists of more than 27,000 IBM business partners.

Some of their clients are: • Air Canada• Bank of Bermuda• Bank of Montreal• Panasonic• Sony• Toshiba

Market Share of IBM:Company Total Revenue

($M)Market Share (%)

IBM 3,311 27.9

Hewlett Packard 3,071 25.9

Dell 2,227 18.8

Others 3,248 27.4

3,311

3,071

2,227

3,248

Total Revenue ($M)

IBM Hewlett Packard Dell Others

27.9

25.918.8

27.4

Market Share (%)

IBM Hewlett Packard Dell Others

Competitors of IBM 

IBM ACN HPQ MSFT Industry

Market Cap 192.10 B 53.04 B 56.21 B 311.36 B 8.51 B

Employees N/A 2,81,000 3,17,500 99,000 143.10 K

Quarterly Rate Growth -0.06 0.02 -0.03 0.14 0.08

Revenue 99.75 B 28.70 B 112.30 B 83.43 B 8.10 B

Gross Margin 0.49 0.33 0.23 0.71 0.52

EBITDA 24.30 B 4.42 B 13.03 B 31.83 B 992.00 M

Operating Margin 0.2 0.14 0.07 0.34 0.08

Net Income 16.48 B 3.33 B 5.11 B 22.82 B N/A

EPS 14.94 4.7 2.62 2.7 0.91

P/E 12.25 17.73 11.24 13.89 38.1

PEG (5 yr expected) 1.16 1.53 -3.82 1.85 2.23

P/S (ttm) 1.93 1.83 0.5 3.72 2.18

ACN = Accenture plc; HPQ = Hewlett-Packard Company; MSFT = Microsoft Corporation; Industry = Information Technology Services

Major Competitor of IBM & their Products

Product category Description competitor

PCs:Notebook PCs

Powerful, portable computers good for travel or replacement for a full-sized desktop PC.

• Dell Inspiron and LatitudeNotebooks.• HP Pavilion and CompaqPresario notebooks

Desktop PCs Low cost desktop PCs with largely integrated components. Suitable as home or home office PCs

• Dell OptiPlex andDimension Series PCs• HP Pavilion and CompaqPresario desktops

Workstations Ultra high-end Unix workstations for extremely advanced and/or technical users (CAD/CAM, Design, Engineering, Technical Analysis)

• Dell Precision Workstation650 Series PCs • HP Workstation zx2000and zx6000 workstations

Continued…..Servers: Blades Modular, dual-CPU servers designed for optimal

scalability and performanceHP Proliant BL e-class blade servers

Mainframe High-end, high-security scalable mainframe system for virtually any enterprise application, including high end scientific and technical analysis, application servers, ecommerce, accounting functions, materials management, distribution, manufacturing, human resources, asset management, business intelligence, and data mining

• HP9000 SuperdomeMainframe PCs

SAN Storage Systems Scalable SAN servers with Fiber Channel host to drive technology

• Dell /EMC Fiber ChannelRAID Array CX200, CX400and CX600 Series

Continued….

Entry Level & Midrange Servers

High-end storage server. Supports storage sharing for many systems including: WinNT/2000/XP/2003, Linux, Novell Netware, Irix, Unix, and IBM eServer iSeries, pSeries, and zSeries servers

• Dell/EMC Fiber Channel RAID Array CX600 Series

Clusters Powerful ,low-cost 64 bit processors that don’t sacrifice 32 bit computing performance. Ideal for technical and scientific analysis.

• HP HP9000 and RP5430 server

Continued….Software:Enterprise/DesktopOffice

High-end, high-capacity ultra-scalable data storage system designed for ultimate reliability and availability. Includes cluster management software designed to simplify deployment and reduce administrative costs

• HP Linux LC Clusters

Suite/ProductivitySoftware

Office Suite includes word processing, database management, spreadsheet program, and graphics/presentation software

• Microsoft office XP or Office 2003 professional

Strategies Followed by the Marketer

Initially IBM was only dependent on third parties which use to introduce new clients to IBM. ---- Till 1970

During 1980’s IBM become more involve with Independent software vendors (ISV’s) & Reseller as personal computer start gaining reputation.

In 1990’s the demand of personal computer start increasing in huge number, so IBM reinvented themselves and combined all small business & channels to cope up the market.

In 2001 suddenly the whole demand pattern took a change throughout the market, as people started searching benefits out of new technologies. --- Market become harder.

Continued… Here the strategy of ‘MARKETING’ evolved rather than only selling. They

started understanding their customer:

The company should more concern about the customer & should be driven by the clients not by the technologies.

Marketing should be done by the business that they are doing not by the communication or advertisement.

Focusing on the customer they created different segmentation/ channel to meet the goal of marketing. One channel or segment is not sufficient so, to do the marketing more efficiently IBM divided all the transaction into three groups:

I. First type is already a owner of one or more products aiming to buy more of them & hence would have some knowledge of the product.

II. The second type of transaction involved buyers who would be more of an expert, a technology expert.

III. The third & most critical transaction consisting of people carrying out complex business changes etc. & consisting of both expert & non-expert buyers.

Continued…

All these processes leads to find the right way to market also called ‘ Routes To Market’ (RTM) are now seven in number:

1. The first one which is being used to address and deal with the most complex matters (the third type of transaction) is being controlled by ‘GLOBAL SERVICE’ ( it has been now renamed and the new name is ‘Business consulting Services’).

2. The second route is being governed by the Independent Software Vendors (ISVs).

3. Major SIs was majorly controlling the third route. It consisted of both Hardware (HW) and software (SW).

4. Fourth being controlled by the ISVs and regional Sis.

Continued…

5. Fifth being controlled by FTF specialists.

6. Sixth route was through the solution providers. They were also the core business partners for IBM.

7. Finally, the seventh route was being controlled directly through the Tele-Web.

The next step involved the analysis and comparison of the profit expected out of the clients and the cost of the spent money on providing them with the required services. This was done in order to decide about allocating or putting up sources such as the direct telephone services or direct teams for clients. The step followed made IBM look at the abilities of the different channels.

Group Impression About IBM

Strengths

• First mover in cloud computing solutions for enterprises

• Brand reputation• Diversified business• Strong competency in acquisitions• Integration of products and services

Weaknesses

• Expensive service and software solutions

• Focus mainly on large enterprises

Opportunities

• Expand services and software divisions

• Increasing demand of cloud based services

Threats

• Increasing competition in the cloud computing market

• Slowing growth of world economy

SWOT

“The company´s financial management and shares buyback are one of the aspects that the Oracle of Omaha likes the most. Cloud computing and other trends in the sector provide ample growth opportunities for this IT titan in the future. IBM pays a 1.5% dividend yield, has increased dividends for 16 years in a row and trades at a very reasonable P/E ratio of 15.4.” ~ Warren Buffet

FACTS :Selected as the best company in information technology for 9 consecutive years.

The company transformed itself through the years from a hardware manufacturer to a provider of software and services, increasing profit margins and cash flow generation in the process.

Management has been able to make the right decisions and adapt the company to a changing scenario to better fit its client´s needs.

Group Saying…….It is a stellar example of a high technology company that has kept

recreating itself over the last 4 decades...from emphasizing hardware.. to software... to services.

 It adheres to some basic principle like respect for the individual and quality

customer service and this has kept it at the top of the heap. 

At Big Blue they truly think outside the box.

Cont…..

IBM a leading player in the server market follows good strategy, innovating ideas. So they can continue this business for long term.

IBM creates value not just technology, so they can sustain in business for a long time.

Ease of management makes the company and the products attractive.

What’s negative….Product perception issues-Despite being a comprehensive IT solutions provider,

IBM is perceived as an expensive and highly complicated solutions provider. For instance, IBM offers certain solutions, where it provides its hardware solutions with competitors' software and in some cases its software solutions on competitor’s hardware.

This creates confusion in customers’ minds and will drive them to a lesser complex

or easier alternative. Negative perception of the company’s solutions will require focused marketing efforts to induce confidence in customers’ decision making process.

Thank

You..!!