IBM Focuses on Digitising Its Clients

Jonny Fry
Jonny Fry
Oct 27, 2020 · 3 min read

2 min video on how and why Big Blue- IBM is reinventing itself again

IBM has announced 90,000 of its current 352,000 employees will be moved to a ‘New Co’ — name yet to be announced. It will also be transferring some of its existing customers and will thereby have an initial turnover of $19billion. The New Co will run IBM’s ‘Managed Infrastructure Services’, i.e. its legacy IT infrastructure, leaving IBM to focus on higher margin digital transformation offers such as AI, Blockchain and Cloud services.

IBM and its New Co — different services offered

Source: NewPlatform.com

When announcing the spin out IBM’s CEO, Arvind Krishna, said, “IBM is laser-focused on the $1 trillion hybrid cloud opportunity.” This follows on from IBM having reported only in September 2020 about how Blockchain adds trust to AI and IoT and stating, “Blockchain and AI are on every chief information officers watchlist of game-changing technologies that stand to reshape industries”. IBM has 1,500 staff and over 500 projects dealing with Blockchain work in a wide range of industries, including financial services, shipping and healthcare. IBM extols Blockchain as being able to both help improve supply chain logistics and offer greater transparency as to the provenance of the origin of food. Indeed, IBM has had some great successes developing the Blockchain-powered TradeLens with Maersk, the shipping conglomerate, and TradeLens has now signed up five of the biggest shipping companies. A subsequence of this has been the been the necessity for TradLens to obtain special exemption in the US in order to overcome any potential anti-trust legislation, otherwise even discussions between a competitor regarding how cargo documents might be used on the TradeLens platform would have been illegal. This, itself, demonstrates how Blockchain technology is changing the shipping and global supply chains and logistics with the blessing of government regulations. Furthermore, IBM has also been successful in helping supermarkets provide provenance from where the food they sell is sourced using IBM’s Food Trust Blockchain platform. Food trust has been used by the supermarket giant, Walmart, since 2017 and this short video gives an insight to the advantages food trust offers for farmers, retailers and consumers alike.

We have seen many tech firms ‘muscling in’ on financial services with IBM (aka Big Blue) being of no exception, having developed its own banking payment platform and signing up banks such as Australia’s National Australia Bank, Spain’s BBVA, and Indonesia’s Bank Danamon. Working with StellarLumens, IBM claims that using Blockchain technology can help banks make international payments faster and cheaper as well as being less susceptible to errors — a real win, win solution. More recently IBM has been working with the Thai Government, having just issued $1.6 billion of bonds using Blockchain technology. The process to issue government debt usually take 15 days but took IBM only 2 days, so illustrating the improved efficiency. The issuance of bonds is huge, with over 22,000 deals creating $7+trillion of bonds in 2019. IBM, with its massive global corporate client bank and contacts within governments, is in an enviable position by getting its clients to switch to using Big Blue’s Blockchain technology for issuing bonds going forward.

Surely one of the key drivers for this more focused strategy on AI, Blockchain technology and Cloud computing is for IBM’s management to inject some vigour into IBM’s share price? Over 1, 3 and 5 years IBM has ‘lagged’ the NASDAQ index, as well as the likes of Google, Microsoft and Oracle. Looking at the performance over 5 years of IBM’s shares (down 13.85%) compared to Amazon (up 552%), it is easy to see that IBM needed to do something. Amazon Web Services (AWS) saw its revenue up 33% in its latest results, which now accounts for 77% of Amazon profits. No doubt IBM hopes it will able to take market share from AWS going forward.

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Jonny Fry

Written by

Jonny Fry

#DigitalAssets#Tokens #ChairmanGemini #Fintech #Blockchain #Assetmanager #Speaker #DigitalBytes #Economics @Teamblockchain Twitter:@jonnyfry175

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +794K followers.

Jonny Fry

Written by

Jonny Fry

#DigitalAssets#Tokens #ChairmanGemini #Fintech #Blockchain #Assetmanager #Speaker #DigitalBytes #Economics @Teamblockchain Twitter:@jonnyfry175

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +794K followers.

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