Are IBM (NYSE:IBM) Traditions Causing it to Fall Behind?

The world of IT undergoes remarkable development with each passing day. In light of such rapid updates, it is quite a challenge for companies to survive in this competitive market. Lately, Cloud computing has made a significant impact with in the IT field and among users. So it’s unusual that a big name like IBM (NYSE:IBM) still hasn’t entered into this market. IBM (NYSE:IBM) has been promising shareholders an outstanding cloud computing business, but till date they seem like empty promises. One wonders how long till IBM (NYSE:IBM) realizes the significance of this latest technology.

Cloud has become part of every business now, as it simplifies and streamlines everyday tasks for the corporate sector. It won’t be long when companies will prefer using only cloud over other methods, because of its security assurance and significant space availability options. But IBM (NYSE:IBM) seems to be lying off this switch to the cloud, as consulting has played a major role in IBM (NYSE:IBM)’s success in the past; hence the hesitation. With a decade of hard work and dedication put into the consulting; abandoning it for new high end products and services is looking to be much harder for IBM (NYSE:IBM) than expected. This consulting business goes hand in hand with its software sales. To put it bluntly, there business model goes along the motto, “Tell us what you desire and we will pick out the best solutions available to cater to your needs and help you install them and will monitor it. All this at a high price but your satisfaction is guaranteed”.

The Cloud option is not only cheap, but fast, vast and easy to use. It has gotten the attention of students using Dropbox. It comes with a trial period; one can try out the product and only make the purchase if they are satisfied with it. Another benefit is that the services are updated on a regular basis. With such products lined up for corporate clients, consulting service that chooses and installs products that come with high fees and licenses, may seem quite inadequate.

According to Mark Russinovich, the chief technology officer for Microsoft (NASDAQ:MSFT)’s cloud business; Azure: the companies that want to inject cloud into their systems need a cultural shift altogether. The best companies offering cloud services at this stage aim at creating a relationship with their client, by frequently updating and generating fees after a long period. They aren’t aiming at expensive sales at this point. The cloud leaders have invented a budget friendly and rental software to help build trust among their customers. The services offered through this software include storage, data centers and computing. There are additional products for added security and data analytics.

If IBM (NYSE:IBM) continues to focus on consulting as its primary business, and cloud software as secondary interest, they might face serious competition. IBM (NYSE:IBM) already showed terrible figures in its third quarter, and officials have reassured investors by promising that the company will reinvent itself to match market demands.