This week, IBM announced the IBM FlashSystem 9100 which, on paper, in terms of performance appears to significantly outperform any other similar storage solution in the market. This is an NVMe system which, as you’d expect, is substantially faster than earlier pure flash storage systems and appears to set a new bar for non-volatile high-speed storage. The surprise for me is that, increasingly, IBM appears to again be setting the pace for storage architectures and that is largely due to organizational changes in IBM’s storage unit. Since I ran into significant problems trying to address IBM’s rapid decline in the storage market in the 1990s, I’m actually more interested in the organizational changes in the unit that founded this dramatic change in IBM’s execution than I am in this amazing new storage hardware.
But let’s start with the hardware and then go into the organizational changes that made the impressive return to competitiveness possible.
IBM FlashSystem 9100
The IBM FlashSystem 9100 is an end-to-end NVMe solution. NVMe can approach system memory speeds with non-volatile memory, making it impressively fast. To get the full benefit of this higher performing technology, IBM wrapped it with an artificial intelligence (AI) engine that provides for predictive analytics and storage resource management, and can support a cloud-delivered platform. It is also provided with the full IBM Storage Insights bundle branded “IBM Spectrum,” which covers array management, data reuse, data protection, disaster recovery and containerization. Finally, it integrates with IBM’s multi-cloud solution strategy which, in and of itself, is a very different approach for a firm that was once very reticent to integrate with anything that wasn’t IBM.
In many ways, this new hardware and IBM’s approach to the market are vastly different from the IBM I used to work for and since this recent iteration of IBM storage is what Louis Gerstner couldn’t do, looking at how it got there is important, and for me, incredibly interesting.
The Problem with an Entrenched Division
As companies age, you get an increasing number of folks who are largely paper pushers and a decreasing number of innovators. This is due to two reasons. One is that advancements and raises slow down significantly because the firm hits competition, a slowing market, or gets a CEO who shifts most compensation to their own salary. This last is particularly damaging because the smart overachievers read the writing on the wall and exit the firm. Then you get layoffs, which cut indiscriminately across working groups, and a level of job fear that effectively pits employee against employee and the company flounders.
You can’t just bring in one or two new executives because they’ll burn out. When I was at IBM, we had a running pool on how long an external executive would last; they typically exited between nine and 18 months of being hired. I recall walking into the then head of the division and presenting a list of critical problems, which included entire departments that had decided not to work, outright lies to customers about shipment dates of products we’d eliminated funding for, and internal reporting systems that had ceased to function. I was told that he knew about all of that but didn’t want to try to fix the problems because they would reflect badly on him and he was just a couple of years from retirement (and didn’t want to risk his pension). After that, I did the smart thing and bailed, watching everyone I reported to get fired and the division collapse over the following five years.
However, IBM’s current leadership is clearly on top of the problem.
How IBM Fixed the Problem
IBM’s executive management stepped up to fix the problem and brought in top executives with startup experience in Ed Walsh, to manage the storage business and Eric Herzog, running storage marketing. They effectively sat back, clean slated what they wanted in a storage portfolio, brought in about 30 percent new “get-it-done” talent, and then found they could again execute. Effectively, they turned IBM Storage into a start-up at scale with a solid vision and roadmap.
They needed CEO Ginni Rometty’s backing and apparently got it, the difference between Gerstner and Rometty being that Rometty understood the business well enough to assure strong talent. Gerstner did not.
As a side note on Gerstner: I did get to know one of the key members of IBM’s board shortly after I Ieft the company and, according to him, what most don’t know is that it wasn’t really Gerstner who saved IBM, it was Jerome York, who had learned how to do a critical turnaround under Lee Iacocca at Chrysler (sadly he left after a short period, which stalled what could have been a far stronger effort). Later, he was one of the strongest members on Apple’s board while Steve Jobs was running that company. (What is interesting is that in his linked bio, it says he was recruited by Gerstner which isn’t true. IBM’s board hired him before they hired Gerstner and he, not Gerstner, was their true initial champion).
But the reason IBM Storage is able to execute so well is because they started with leadership in Rometty, who was willing to do whatever it took. She hired executives who could get the job done, and then fully backed their decisions to make it happen. IBM Storage has come back to become a major market player once again.
Wrapping Up: Doing a Turnaround
I’ve been through a rather substantial number of turnaround attempts over the years and the successful ones usually have three elements: strong leadership, full backing to do whatever it takes to get the job done by that leadership, and enough fresh blood to overcome the failing entropy killing the firm. We saw this play out with Apple and Jobs, and now again with IBM Storage. I wish more boards would learn that you need all three elements and stop trying to cherry pick them.
In any case, given IBM Storage’s new capabilities, I’d expect more breakout products like this new FlashSystem 9100 that include, like this hardware does, some powerful new performance surprises unique to IBM. There is a path to success in a turnaround, even a difficult one. Jobs and Rometty have clearly highlighted the best and most viable path. It remains frustrating that it is also the path least taken.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+