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IBM: We lost our way but we're innovators again

Big Blue celebrates 100th birthday

The UK managing director at IBM has said the company changed itself dramatically in the last decade after somewhat losing its way, but insisted it has retained its essence and returned to being an "innovator".

Stephen Leonard told Computerworld UK that IBM had rapidly changed from being a hardware vendor with plummeting profits in the early 2000s, to becoming a software and service-led company that had in effect saved its future.

IBM is celebrating its 100th birthday on Thursday. Throughout its life, IBM had been an inventor of major technology, Leonard said. Historic IBM inventions include cash machine software, the original travel reservations system, and the magnetic strip on credit cards.

IBM employs 20,000 people in the UK, including 6,000 at its Hursley software development laboratory near Winchester, the largest such unit in Europe.

The company has had its troubles. "We didn't change in the 1990s, we wrapped ourselves around one piece of technology, the PC," he said. "We're much better positioned now. We should be creating and leading markets."

Around 44 percent of IBM revenues now come from software, 39 percent from services and the remainder from hardware.

IBM had learnt the hard way that its route to survival and success was "adapting to challenges in the economy, responding to technology change and retaining the essence of the organisation", he said. This essence was in many ways its innovation, he said.

Leonard said IBM was focusing a substantial portion of its research efforts on smarter cities, including through its much advertised analytics capabilities.

IBM's Smarter Planet initiative is aimed at improving the way places operate, as demand is heightened and natural resources become more scarce. It affects the systems and processes of everything from cars, health and policing to power grids and even farming.

"This isn't just about creating economic benefits in towns and cities," he said. "It's also about positive social and environmental benefits."

In March, Glasgow was awarded a grant by the company, one of four European cities to receive it.

"Nearly a third of Glasgow lives in 'energy poverty', meaning people who spend more than 10 percent of their disposable income on energy," he said. "Solving this issue is very complex. There are questions on usage, homes, education, location of buildings. Glasgow is determined to eradicate the problem."


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