In June of this year, IBM, a technology giant based in Armonk, New York, was 105 years old, but before Ginni Rometty took over as CEO of the company in 2012, IBM had been trapped at an intersection. The old computing technologies that IBM and its suits and consultants used to build monopoly positions in the 20th century, such as servers and mainframes, have gradually failed to keep pace with the times. IBM understands that the future of the company is pinned on cloud technology and artificial intelligence technology, and that Rodriguez firmly promotes this concept. However, this veteran technology company's decline rate exceeds the speed of the rise of technology rookie. The company’s turnover dropped for 16 consecutive quarters, and its turnover in 2015 dropped to US$81.7 billion. Not only that, IBM's share price has fallen by 30% since it peaked in March 2013, and it is even poorer than the S&P 500 by 62%. "We don't know when this situation is a head start," Mark Moskowitz, an analyst at Barclays, said pessimistically.
With cloud computing, companies do not have to invest heavily in building their own infrastructure to store and manage data, and its emergence has revolutionized IBM. Cloud technology has weakened the market demand for IBM's servers, and the accompanying high-margin consulting and support services.
IBM competed against the cloud market, with a market value of US$10.8 billion, accounting for more than 13% of the company's total operating revenue last year. But the company has devoted most of its energy to the so-called hybrid cloud service that integrates personal servers so that IBM can continue to provide customers with "middleware" and support. According to Moskowitz statistics, middleware's profits account for about 40% of IBM's total profits. But this business model puts IBM at a disadvantage when it competes with rivals such as Amazon and Microsoft that pay less attention to expensive public cloud services. "You will not be fired for using Amazon Web Services." UBS analyst Steven Milunovich said the company's chief information officer is Tell him this. "This is a new look of IBM."