IBM Innovation Report: Analyzing Issues and Applying Innovation Models

This report provides an executive summary of IBM's innovation challenges, focusing on issues in cloud computing, AI, and market competition. It begins with an introduction to the linear innovation model and its application within organizations, followed by a background on IBM and its historical innovat...Read More

TECHNOLOGY AND
INNOVATION

Executive Summary
The relative innovation model avails conceptual framework for the mature organisation. It
depends on the growth from four to six percent as being generated want to the shareholders.
Efficient innovation can avail the solution to accomplish growth demand where the model
can provide conceptual framework for finding and creating changes while generating value to
maintain sustainable growth. A familiar liner innovation model can avail historical
elaboration of linear innovation model. This model elaborates four basic steps including basic
research, applied research, development, and diffusion. Other models can be addressing the
negativity of linear model where source of ideas can finally lead to value creation. Certain
variation in model of innovation includes technology push, and market pull. Phase gate
model signifies that liner model can find that there are certain feedback looping with certain
variations between steps.

Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................2
Background of the organisation.................................................................................................2
Issue to innovation.....................................................................................................................2
Application of Innovation model to resolve issues....................................................................4
Conclusion..................................................................................................................................5

Introduction
This report brings a discussion on issues, which are faced by IBM during innovation. This
report identifies a specific innovation opportunity and issue as being faced by the company.
Further, after identifying the issue, innovation model has been used to tackle issue. The
critical evaluation is based on circumstances and these are being handled with the help of
innovation models (Kogan, Papanikolaou, Seru, & Stoffman, 2017). This linear model has
been designed to grasp the relationship between science and technology, which deals with
basic research, applying research, diffusion, and development (Kogan, Papanikolaou, Seru, &
Stoffman, 2017). The company has been continuously shifting with a focus on high value and
non-profitable market. IBM has been named as big blue organisation being among the 30
companies in Dow Jones Industrial Average with employee base of 380000 employees
(Kogan, Papanikolaou, Seru, & Stoffman, 2017). Almost 70 percent of the employees are
based in US (United States) with the country with greater number of IBMers are in India. The
report brings out issues related to innovation and steps that can resolve through innovation
model (Kogan, Papanikolaou, Seru, & Stoffman, 2017).
Before identifying the specific reason of innovation, it is important to know what type of
risks and challenges it faces. For example- A company undertaking the innovation process
whether a new product will work or not can face technological failure of innovation. It leads
to face certain financial strain faced as a challenge to returns where aligning innovation and
long-term growth is difficult. Market failure is the largest risk and uncertainty for any
organisation where demand can be low. This shows there is a lack of depth market research
before committing resources for production and development (Kogan, Papanikolaou, Seru, &
Stoffman, 2017). Once the issue has been found, there is a need to resolve the issue by
applying innovation model on the basis of model such as innovation matrix, technology

innovation, business model innovation, diffusions of innovation, marketing innovation
(Kogan, Papanikolaou, Seru, & Stoffman, 2017).
Background of the organisation
IBM (International Business Machine Corporation) is renowned for American IT
organisation headquartered in New York in nearly 170 nations. The organisation started in
1911 that was found in New York as CTR (computing tabulating recording) organisation,
which was renamed as “International Business Machines” in year 1924. The company sells
and produces middleware, software, hardware, consulting services, and availing services
ranged from nanotechnology to mainframe. The company is a research organisation, which
holds record of US patent as being generated by organisation. IBM`s innovation includes
ATM (automated teller machine), hard disk drive, floppy disk, relational database, UPC
barcode, SQL programming programme and DRAM (dynamic random access memory)
(Aydalot, 2018).
Issue to innovation
With the appropriate application of innovation, it is seen that IBM could not succeed in the
proves of innovation. IBM has crucially focused on cloud computing, mobile, data analytics,
and security nearly too strategic imperative. Revenue will increase through efforts by 27
percent. The company planned to capture certain revenue opportunities by its abilities
(Aydalot, 2018). Biggest challenges and issues relating to innovations are its services, which
used to fall under source of income (cash cow) for the BCG matrix. The company faced
issues in differentiating hardware from its rivals. if the customers are not willing to buy its
hardware then companies often buy less of IBM software by saying they don’t need
programs. This has resulted into IBM`s traditional offerings as being purchased by the
customers and third party services that become less likely to purchase IBM rather than buying

inexpensive goods and open source computation capabilities. In regards to cloud computing
and artificial intelligence, IBM runs complex programs as one of the trending technology.
Big blue faces stiff competition from rivalries such as Google, Microsoft, and Amazon. The
innovation issue are related to technological and management issue. IBM is a profound
example wrong choosing of technology, which leads to punishment by investors. Cloud
business with commoditised leading to big mistake to choose and focus rather than creating
unique product (Aydalot, 2018).
(Source: Azar, & Ciabuschi, 2017)
Amazon avails cloud business as it gained and received first mover advantage in year 2006
that finally allow to a cost effective scaling due to rapid results. It is seen that Amazon used
its competitive human resource has tapped its budget constraints of small application
developers relying on cloud offering and offering certain characteristics to clients (Azar, &
Ciabuschi, 2017). On the other hand, IBM faces severe difficult time while capturing huge
organisations as clients. For the developers, one prefer open sourced cloud solutions that
would go Google. Google generates its maximum revenue from advertisements where they

are willing to avail open sourced solutions when creating an effective ecosystem around it.
Three players covering Amazon, Microsoft, and Alibaba grabbed major market in world
except country “China.” When IBM announced data centre in china, it always remained
addition to cloud revenues. IBM`s stemming issue cannot be differentiated seen as IT
services (Azar, & Ciabuschi, 2017). The global services have competed against Accenture,
HP, and tech Mahindra. IT services will start to act as a utility so that consumers can gain
upper hand with lower prices. Ugly truth in regards to absorb the effect of price war. The
main issue of unsuccessful actions in IBM was due to unmotivated employees as numerous
employees will prove to give a hindrance as an organisation focuses on distractions allowed
to the employees during the daily chaos of actions (Azar, & Ciabuschi, 2017). Employees are
not at all allowed to act in an innovate manner as they are ruled by the decision of top-level
management (Aydalot, 2018). Employees want certain freedom while opting risks and try
few ideas where internal innovation, which cannot accomplish without any support of
leadership. Apart from this, the company has multitude of sins, as employees are not clear
regarding what strategy has to be adopted in order to serve the customer in a better way.
There is a need to look for ideas while streamlining business operations and business models
in regards to existing products. Without any clear vision and coherent strategy, a company
can aim to achieve and wind up feeling as being isolated with innovation efforts (Azar, &
Ciabuschi, 2017). The company lack collaboration in terms of both internally and externally
where competitors and partners can use to drive organisation’s innovation strategy in this
industry. Lack of collaboration undertake to improve links with the nation`s researchers
because lack of collaboration has become hindrance innovation in the time of “intensive
global competition”. It is not broadly well connected to broadened economy. Sometimes, it is
seen that it is not enough globally competitive as research is not connected with whole
economy. As the competitors have grabbed the market of cloud computing at each internal

and external analysis for collaboration and innovation forward to the industry. It is seen that
IBM started adopting cloud computing, block chain and AI, where customers have received
an important especially when it comes to innovative success. Empathy and understanding the
relationships is necessary for all the businesses in order to meet the demand of the world. It
helps the organisation to reach to accomplish future trends. One of the important reasons
include inefficient labour representing the commoditisation solution and application of
innovation model can resolve utilities that has represented 4.1 percent from the prior year.
The company has responded commoditization of the services where the average IT consultant
costing $17000 as compared to $100000 in relation to the US labour accounting where 80
percent of costs relation to 80 percent of IT services where they have run out of the serious
competition with the localisation Indian workers in US.
While resolving the issue of cloud computing and AI disruption, IBM has largely visualised
huge web announcement regarding the partnership draws that good design results into good
business. Specialised and unique IBM clouding services optimise iOS inclusive of security,
mobile integration, analytics, and device management. IBM has expertise certainly cash to
purchase a start-up act.
Application of Innovation model to resolve issues
With certain span of time, IBM has shared progress report as a key area of the quantum
computing and the block chain. The organisation has achieved advanced quantum computing
Q from a qubit machine to the prototype of computers working in regards to the cloud. The
company has started with more than 80k people as being used in quantum technology in
nearly 3 million experiments. Blockchain is as prominent as AI (Artificial intelligence)
(Villarreal, & Calvo, 2015). It has been seen that IBM deserves high credits to prioritise the
recognition and quick progression related to two technologies. IBM is at the enviable position
where it is a centre of major transition, which shows significant promises (Saebi, & Foss,

2015). Before identifying an important model of innovation, it is important to note that
technological frontiers can often lead to disruption with “rule of game.” The work of Amazon
while adopting cloud computing and AI (Artificial intelligence) can drew attention to certain
cases so that the market can be an effective trigger points (Villarreal, & Calvo, 2015). His
distinctive approach with the new generation can be a successful player included in multi-
million dollar marketing (Amabile, & Pratt, 2016). Deriving a huge sale can squeeze out
steady stream of the continuous products and similarly processing of the innovation through
systematic exploration with full extent of the innovative space (Sood, Menon, Hirst,
McCulloch, & Ghani, 2017). With time, certain innovative activities have been conducted
where there were many attempts to impose a particular conceptual order in the whole process
of coupling the innovation procedure and process leading to the consideration of a tool and
combination named as “market pull” and “technology push” (Villarreal, & Calvo, 2015).
These models can be centred at interactive procedure with an emphasis by effective feedback
between the research phases and market regarding the previous linear model (Saebi, & Foss,
2015). This coupling innovative procedure is related to sequential not importantly continuous
when it can be divided interrelated phases at different functional suppliers and customers to
be coupled with integration of teams of the product development (Amabile, & Pratt, 2016).
The fourth generation is related to linear model that has been created in its 80s and 90s. It is
well known as functionally different models of the innovation processes as being featured by
product development and integration (Saebi, & Foss, 2015). This model is nearly based on
general integration and the network innovation (Villarreal, & Calvo, 2015). It is important to
note that this model can be applied on IBM`s late promotion of cloud computing, block chain
and artificial intelligence. A model can be applied featured with product development
accomplished with integrated projects and groups rather than sequential manner that is
responsible for developing new product. This model is purely based on development of

product methods that has been used by the Japanese automobile industry with the electric
products (Saebi, & Foss, 2015). The fifth step indicating generation deals with the linear
models in 1990s. This model is based on general integration of the companies regarding the
collaborative network of the innovation ideas and people acting as per it with the application
of proper rethinking (Salim Saji, & Ellingstad, 2016). This innovation model is to improve
the competitiveness of the employees by availing them proper training appliance to certain
innovators such as key suppliers, industrial organisations, and universities so that they could
take advantage of the technological combination and also solve the complexity to solve the
issues related to new products (Villarreal, & Calvo, 2015).
(Source: Koeppel, 2014)
From the above discussion, it can be seen that the innovation is require in an era of criteria
where it is identified that product can be either incremental or radical. An important
improvement in a product is related old market. On the other hand, radically disruptive deals
with the sales arguments, which have fundamentally changed innovations. Incremental
sustaining can be constantly progress of this happens in every business (Ivascu, Cirjaliu, &
Draghici, 2016). Incremental disruption is related to certain improvements related to leading

of the market disruption. This will radically differ as per the change in the technological
development in terms of product and service (Ivascu, Cirjaliu, & Draghici, 2016).
The organisation can also apply Abernathy utterback model, which indicates that it is a
dynamic business model of the procedure and product related to innovation that has to be
considered as a prominent product innovation in regards to early steps of the innovation
process where the process can be flexible. Organisation complying with the competitive
advantage with the maximum performance of product (Ivascu, Cirjaliu, & Draghici, 2016).
With the passage of time, the focus is in regards to the variations that has been becoming
rigid in terms of Apple as it launches its product once in a year. On the other hand, the focus
often moves variations in regards to the competitive products with the production processes
because they are becoming hard due to the formation of island of automotive world.
Predominant processes and innovations have resulted in increased production volume
(Ivascu, Cirjaliu, & Draghici, 2016). At the third stage, this product innovation with the
incremental processes as competition has been focusing on reducing costs. This model is not
at all applicable to all the industries but it is suitable for electronic, chemical, technological,
and mechanical (Anadon et al., 2016).
Although, with time the organisation has realised that it is necessary for both large companies
as well as small organisations can use cloud computing for operations. For example- 3E
Accounting enabled with quickbook online can use the cloud services by creating the
streamlined with effective accounting solution for the clients (Anadon et al., 2016). Clients
without any strong background can easily ensure and create better cash flow management
(Salim Saji, & Ellingstad, 2016).

(Source: Gupta, 2019)
While applying each of the model, it is seen that technological changes have been adopted by
the organisations in order to stay competitive (Bergek, Hekkert, Jacobsson, Markard, Sandén,
& Truffer, 2015). The world is heading fronting towards cloud. Artificial intelligence can
enhance the development of AI (Bergek, Hekkert, Jacobsson, Markard, Sandén, & Truffer,
2015). It refers to machines with ability while performing human like the goal. AI
intelligence is capable of learning to execute the things rather than executed by command
explicitly (Salim Saji, & Ellingstad, 2016). With disruptive innovation model, it is seen that
cloud computing started influencing the AI where it can be quite interesting such as a
transformational technologies including IoTs (internet of things) (Gupta, 2019). This has
introduced cloud computing landscaping adding to recent cloud computing. It is important
that there should be proper understanding of conflict with no disrupt effect of cloud
technology leading to landscape (Anadon et al., 2016). With a perspective related to growing
technology, mobile capabilities, and IoT that come out with while presenting cloud
capabilities (Bergek, Hekkert, Jacobsson, Markard, Sandén, & Truffer, 2015). With parallel
to the time constraints, there are many platforms as being used and opted by several

organisations Microsoft, Google, and Amazon (Gupta, 2019). After some time, IBM has
opted to create machine-learning model as per the type and size of data (Bergek, Hekkert,
Jacobsson, Markard, Sandén, & Truffer, 2015). Cloud computing is renowned technology
that has been ruling the technological market. Artificial intelligence will come with different
features that could finally affect the computing infrastructural while supporting the new
frameworks, paradigms, and programs (Gupta, 2019). Further, a person can anticipate the
absorption of AI abilities where foundation element related to infrastructure can be found
(Gupta, 2019).
Disruptive and sustaining innovation- it has led to description related to disruptive model and
innovation (Salim Saji, & Ellingstad, 2016). It refers to concept, service, and product, which
has created new value network by existing market and disruption by creating a complete new
market. With the beginning in the cycle of innovation, it is seen that disruptive innovations
that are generally avails lower performing (Bergek, Hekkert, Jacobsson, Markard, Sandén, &
Truffer, 2015). Where these kinds of innovations are not good enough while satisfying the
current customers with an appeal to different market situation (Anadon et al., 2016). It refers
to the type of innovation where it already exist in the market rather than creating a certain
value where there is a scope of improving the existing one. All the modern cars have been
considered as modern cars with sustainable innovations where Toyota Prius has some basic
functionalities. With the continuation of better work with iteration, it continues to cater need
of the typical customers (Salim Saji, & Ellingstad, 2016).
Other types of innovation model are both sustainable and disruptive at the same time that can
be either incremental as well as radical. While creating a completely new business model, it
is seen that radical innovation happens with a new disruption of technology of the existing
business. IBM falls into this category, as they are very difficult to execute. In this case, only
10 percent innovation process are successful and radical (Salim Saji, & Ellingstad, 2016).

Conclusion
It leverages IBM’s firm business power with the cool of mobile phone, which, fairly frankly,
belongs to Apple. Remember, the Mobile Enterprise is not only about phones. Starting from
deals and marketing pros, to service providers, to retail buyers and clerks all rely heavily
iPads. The data they carry needs to be secured tranquil, managed, analysed and leveraged.
Heart ate has recently collaborated with Apple while tailoring certain needs of the
organisation as well as the customers. New packaged contributions from the organisation
“IBM” for device beginning, demand supply, and management. With the passage of time,
IBM’s big data and analytical capabilities of the , with the power of more than 100,000 IBM
industry and domain advisors and software designers behind it, fused with Apple’s imaginary
consumer information, hardware and software addition and developer stand."

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