Managing a business divestiture. IBM closes sale of x86 server business to Lenovo.

Managing a business divestiture. 

IBM closes sale of x86 server business to Lenovo on 1st Oct.

 

On 1^st October 2014, the initial closing of the sale of IBM’s x86 server business to Lenovo started in most of the markets, including Asia Pacific. The 7,500 employees that work within the x96 unit across the globe will make the move to Lenovo’s Enterprise Business Group headed up by ex-IBM executive Adalio Sanchez.  This divestiture is a significant, strategic milestone for IBM and STG. 

1. WHAT CHANGED

The IT world has seen this x86 server become a fast-growing and lucrative technology that lifted sales at companies like HP and Dell, which still relied on them for billions of dollars in sales. As when IBM sold its personal computer business to Lenovo in 2005 which sparked success at both companies, this sale signals a change in the computing market.

Despite the competition, buying IBM’s x86 server business is a boon for Lenovo. Enterprise products are generally a higher-margin business than consumer gadgets. Lenovo’s own manufacturing capabilities and sales channels could help squeeze out more profits from the server sales.  


2. THE BUYER'S VIEW

 
Yang Yuanqing, Chairman and CEO of Lenovo said, “Lenovo will add a world-class business that extends our capabilities in enterprise hardware and services, immediately making us a strong number three in the global server market. By combining Lenovo’s global reach, efficiency and operational excellence with IBM’s legendary quality, innovation and service, I am confident that we can drive profitable growth.”


3. THE SELLER'S VIEW

On the other hand, IBM is turning its focus to higher end systems where it can generate competitive advantage.  “IBM will intensify the focus on our Power, mainframe and storage systems, where we can apply IBM’s valuable research and development capabilities to differentiate our offerings.  As we innovate in areas such as big data and cloud, allowing clients to capture value from opportunities in these segments.”says Tom Rosamilia, Senior Vice President of IBM Systems & Technology Group.

4. THE TRANSITION

 
Over the nine months, IBM has been preparing for this transition with a few key investments, including $3 billion in new chip technology to help IBM remain the systems innovation leader, $1 billion investment in Linux and open source technologies for Power Systems, $1 billion investment in Flash storage technology, and billion dollar investments in Watson ad cloud. These investments will help fuel renewed vitality and growth in our core STG businesses.

At such critical times, one server competitor who was fearful of the combination of IBM’s size and Lenovo’s profitability, showed their true colours with blatant competitive ads to undermine the confidence of customers and business partners on the server business.  We have chosen to ignore these ungentlemanly acts as baseless.


5. STEADYING THE TROOPS

I am privileged to be involved in the transition of the x86 team to Lenovo.  We have been going through a lot of planning for the integration of the business and a quick transition turnover of the business systems that supports how we operate.   IBM will continue to provide maintenance services to existing System x customers to ensure the transition between IBM and Lenovo is seamless.  IBM marketing has also been designed to support Lenovo marketing to ensure that our strong demand generation capabilities are transferred.

To the departed x86 colleagues, remember the “I love System x” campaign where you have demonstrated team work and confidence in our technology, regardless of the fear of the unknown new company.  Here’s a encouraging quote “Sometimes what you’re most afraid of doing is the very thing that will set you free.”  I wish you success in your new company.

To the IBM Systems & Technology Group team that remains, I wish you what I have experienced in supporting the transition. I have learnt so much more about the business, processes, people, differentiation and competitive advantage.  “A smooth sea never made for a skilled sailor.”

Secrets to a winning pitch

Our company is known as a great sales company, where sellers who graduate from our Global Sales School are highly respected. With rapidly advancing technology, we have to re-invent ourselves on a regular basis. How much more the front liners that lead the client engagement and the brand teams who provide innovative solutions!

The sales manager plays a part with the day to day coaching of the team for each client.  But even the most seasoned seller needs to take time out think out of the box to create innovative propositions.  

Besides sharing best practice examples, we conduct a Client Experience Academy to put the sales leader through a real account scenario to work through the methodology of creative thinking. The sales leader facilitates discussion with the team to come up with a winning pitch for a pitch competition.

The sales managers have to select an account, gather the account team across the various brand experts, start developing new ideas and learning IBM’s value proposition, deepening expertise and developing the value add for the account.  We arm the team with an opportunity workbook and client provocation tool to generate a unique selling proposition that delivers value in the sales proposal.

Facilitators are assigned to account teams, to help guide the sales managers to use key coaching techniques.In compressed time, the team learns to be concise, yet thorough, to develop a precise pitch.

From a total of 25 teams, 3 finalists are selected for the final battle. The team that I facilitated was voted as the overall champion.

Here are a few tips & secrets on why our team won:

1. Know your client: Besides the account team's knowledge of the client, we often forget that there is a lot of information about the client from annual reports and industry write-ups that help develop deeper understanding of the company’s strategic and business directions.  Knowing this helps to align business and technology.

2. Tap on expertise: There are experts from team mates who have contacts and experience in other similar organizations that can provide insights to validate whether our proposal would resonate with the client, prioritize the initiatives and help quantify the impact.  We also reached out to our Chief Financial Officer to consult on financial metrics and innovative pricing models for feasibility.

3. Break and re-group: An account team is more effective if individuals are allowed to choose to develop sections in their areas of interest.  So it is important to get inputs from the entire team, know when to break up the large team into smaller groups to dive deeper into specific areas, provide clear delegations and then re-group the team again for a final run through.

4. Test & validate: We secured the help of various mentors from different parts of the organization to put our proposal to the test. We validate whether key concerns are addressed adequately and ensure that we have considered every possible angle and have the appropriate response for every stakeholder.

The above applies not just in the pitch competition but also in real life! A boardroom pitch is short but its impact is measured by how extensive the prepartion has been. We sometimes neglect to gather the team to maximize the outcome.

Congratulations & kudos to the sales leader who led the winning team, the account rep and the entire cross brand team that collaborated to deliver the winning pitch.  May you also win the real deal!

Top 5 memorable moments as Marketing Director of IBM Systems Technology Group ASEAN

Come 8^th August 2014, I will celebrate my anniversary as Director of Marketing, Communications & Strategy in IBM Systems & Technology Group (STG) ASEAN.

As I reflect on the past year, I am happy that the team has made tremendous success in developing an integrated approach, driving a clear strategy, creating innovative marketing, demonstrating leadership, rallying collaboration, helping clients solve their business challenges and contributing to the business revenue.

Here are just five of the most memorable moments:

1.       Building a motivated team of marketing leaders

I believe that the most important asset in any organization is the employees.  The most proud moment is to turn a deflated directionless scarcely staffed team perceived to be low performers to the motivated team that takes the leadership, shares individual expertise, bonds together as a team, demonstrates collaboration across the organization to produce best marketing contribution to the business compared to past years, and even than other more senior teams.

2.       Achieving 275%  revenue targets by creating IBM’s Signature Tech Expo & other innovative programs

The winning ASEAN STG team conceptualized and produced ASEAN's signature Tech Show of the year – IBM Technology Conference and Expo. Themed "Smarter Computing. What’s Next? Ready Now!”, the roadshow took place across 7 cities, drawing over 6000 IT professionals, 200 CIO engagements, customer sharing & topic tracks, 70 partner solutions demo and 104 news/TV/radio exposures. The Tech Expo achieved 275% revenue target and showcased IBM's capabilities across brands (systems, software, services & financing) in the areas of cloud, big data and analytics.  This is possibly the largest business-to-business IT event in Southeast Asia.

3.       Leveraging analytics-based segmentation for clear business strategy

Working in IBM STG is like working for several companies all at the same time, as each product group is like a single company. The challenges that the team faced was cannibalization of one another's business and as a result, confusing sellers, clients and business partners.  By developing a segmentation model using predictive analytics which I called Project Wealth, we were able to integrate the portfolio, determine client segments for various approaches and gained agreement with the feuding sales leaders on collaboration.  The result was a clear strategy, a strong go to market plan, better return on investments and an integrated approach which led to greater results and satisfaction from all stakeholders.

4.       Integrating diverse portfolios to address hot industry concerns

Just like most multi-nationals, we have a large global team which drives silo brand and even multiple sub-brand plans with disparate launch schedules that rain down on the region and country with uncompromising fervor and determination.  As leaders, we filter what is relevant to our market, build a strong compelling integrated storyline and manage expectations on the pipeline generation targets with a low expense/revenue ratio.  We were able to create integrated launch experiences across our region, with STG’s portfolio with servers, storage and converged systems that is ready for cloud, big data & analytics, social and mobile.  Not just with STG, but also working with our software, services, financing and consulting teams to bring forth solutions to clients.  Speak with any IBMer, and you would know that collaborating within the business unit is hard, and across business units is a miracle. And the ASEAN STG marketing team did it!

5.       Collaborating with renowned experts to set the industry standard

Having worked with many analysts and research firms, one of the best collaboration is with Rajnish Arora (Vice President for IDC's Asia Pacific Enterprise Computing research group). We developed several projects such as research on storage and converged systems, integrated launch plans, webcasts, white papers and CIO round table discussions.

I was privileged to take the stage with Manoj Saxena (then General Manager of Watson Solutions) to share about the latest analytics wonder and as the keynote speaker on “Smarter Computing in Action – Beyond Innovation”.

The most enjoyable banter and collaboration was with Dr. Guraraj Rao (IBM Fellow and Vice President, Systems Chief Engineer, STG Development, IBM India and South Asia) as we co-hosted ASEAN’s CIOs in round table discussions on their views on “The Future of Data Centres and Cloud Adoption”.

In a virtual event, we drew the highest visitors from Southeast Asia and beyond (five times more than our global webcasts!) when I hosted & facilitated discussion sessions with Dr Rao, and where I also shared about “What’s Next? Trends, Predictions and Impact” which covered critical trends in IT from The Institute of Business Value’s CEO Study, Gartner and IDC.

I am thankful for the friendship, trust and respect that has been shared among the team - in STG, in IBM and with our strategic partners. It has been a privilege and honour to work with the best in the industry. I pray that the coming year would bring an even better working environment and greater achievements!

P.S. Check out some exciting links on IBM Tech Expo promotion video and virtual event.

Tech Expo promo video

Virtual Event on Smarter Computing

Gratitude brings happiness to the heart.

"It’s not happiness that brings gratitude, but gratitude that brings happiness."

I have not continued the blog on my Lent challenge of keeping a gratitude jar.   So, here is the list of the entries in my gratitude jar over the past few weeks.

Wed 12 Mar: Light shines best in the dark. I went for a night snorkel in Krabi, Thailand.  Plankton shines like glittery light in the sea when there is movement.  As the moon was up, the glow was not as strong. Lesson learnt – thank you for the times when we experience waves in our lives to create a chance for us to shine in the darkest times.

Thu 13 Mar: Everything is in God’s hands. I arrived safely in Singapore with sufficient time for a quick shower at home before the next flight to Brazil for the IBM Corporate Service Corp.  The Krabi trip had been planned last year before I was notified of the selection for CSC Brazil 17 team. The timing of the required arrival to Brazil was just in time so that I did not have to move the Krabi trip which we would have had to incur additional expenses.  It worked out well that I could spend quality time before being away for a month.

Fri 14 Mar: Safe travel and smooth transfer. I was happy to have a safe transit into Dubai after 7.5 hours on Emirates Airlines and the 2 hour 20 min transfer time was sufficient to get onto the next flight to Rio De Janeiro in Brazil.  After 14 hours 20 min flight from Dubai Airport, I arrived safely in Rio De Janeiro GIG airport with sufficient transfer time of 3 hour 30min to buffer for the obligatory luggage checks for food items in all my luggage.  Managed to print my boarding pass at the self serve terminal and luggage weight went uncharged.  Met a fellow passenger on transfer from Rio who told me that Fortaleza is paradise. Glad to arrive safely in paradise after an hour flight delay and another 3 hour 20 min flight on TAM Brazilian Airlines. Survived 25 hours to Brazil paradise!

Sat 15 Mar: Airplanes make everything possible.  Due to crossing of time zone when travelling across the globe, while I landed on Friday night Brazil time, it was Saturday morning in Singapore. We finally met the IBM CSC team face to face at breakfast after 12 weeks of telecon! Especially my project mates Julius Kiss, Shi Yi & Berna.

Sun 16 Mar: Safe neighbourhood in Fortaleza. IBM had placed the CSC team at Biera Mar of Fortaleza where the tourist stretch in front of the sea is relatively safe. Fabiana of Pyxera took us for a walk around the neighbourhood for where to get our necessities like pharmacies, supermarkets, laundrymat etc. I managed to walk to church alone to attend mass.  A stranger held my hands as we lifted our hands in prayer. I felt safe and accepted.

Mon 17 Mar: Successful kick off of IBM CSC with clients. We heard each group present their organization and introduced the IBM consultants. We met our client ITEVA Sara, Andersen, Gabriel, Fabio and the team for the first time. It was like meeting old friends.

Tue 18 Mar: Heart-warming Brazilian hospitality. First full day meeting at ITEVA was filled with warm hospitality – transport to/fro, lunch, 2 tea breaks, smiles, hugs and genuine welcome.  It’s a promise of more good things to come.

Wed 19 Mar: Team bonding time. This was a public holiday for San Jose.  The IBM CSC team went to a beach for team bonding.  We made friends as a relaxing start to an intense CSC assignment.

Thu 20 Mar: Joining in a meaningful cause.  We learnt about the challenges faced by Brazil communities for education, and saw how ITEVA was helping the lives of youths to get educated and be able to find jobs.  I know my efforts will truly help a worthy cause.

Fri 21 Mar:  Promising youths of Aquiraz at EEEP Alda Facanha. Awesome sharing experience. IBM CSC Brazil 17 team had an awesome community day with the students of EEEP Alda Façanha in Aquiraz. The IBM consultants shared about our home countries & our life experiences. The youths gave us a warm welcome, clapped & cheered their appreciation. We are overwhelmed with the promise that the youths have - positive attitude, team work & passion.

Sat 22 Mar: New experience with team mates at Canoa Quebrada. We took a weekend trip to Canoa Quebrada, the pearl of the east coast of Ceara in the municipality of Aracati.  We saw the beautiful red cliffs, took buggy adventure rides over the sand dunes, zip lined into the oasis and para-glided over the beautiful coastline.

Sun 23 Mar: Built deeper team friendships across cultures. Shared room with Shi Yi and got to know her better. Spent Sunday shopping with Andrea and Shi Yi.  Each of us have different cultures, personalities but we blended so well together.  Girly activities like walking, chatting, shopping and having dessert together was very relaxing.

  

  

Mon 24 Mar: Sisterly love.  Today Berna my team mate shared with me something personal.  We shed tears together like sisters.  .  She also appreciated that I was sensitive over last week that she was going through a difficult time and was patient with her.  I appreciated that she was open with me, and I fully emphatized with her.  The CSC is not an assignment, but made up of people to care for.

Tue 25 Mar: Rare experience of Maracatu parade. This was the 2^nd public holiday during our CSC assignment. While we spent the day working from the hotel, four of us went to the Maracatu parade, which was a black faced procession of African queens.  This was not a publicized tourist attraction and we were the only tourists there. Thankful that Eoin could read the local papers and grateful that we were safe despite the same newspaper citing Fortaleza as having the 3^rd highest murder rate in Brazil with 37 murders over the past weekend. But we are safe.

Wed 26 Mar: Singapore meals made with love. As a special cultural experience, I prepared a Singapore meal to be cooked on Thu for my new ITEVA family. The dishes included our national favourite chicken rice,  our Peranakan specialties Laksa (pimento noodles) & shrimp paste chicken. I hope they enjoy the meal that I will cook with love.

Thu 27 Mar: Heart and action for the youths.  We met Nunes Conceição (Secretária Executiva do Conselho Estadual dos Direitos da Criança e do Adolescente) from the STDS (Secretariat of workforce and social development for teenagers) in Fortaleza. She shared with us about the drug problems that the youth face and the efforts made to provide activities for the youths so that they get out of the social problems. Real actions from the heart.

Fri 28 Mar: Friend in need is a friend indeed. In the preparation for the Brazil trip, I was not aware that visa was required for more than 30 days stay in Brazil.  Fabiana from Pyxera called on a friend to help secure a workable appointment date with the Federal Police for my extension, which would have otherwise not been possible with the on-line appointment booking. My passport on records had a 90-day visa free approved stay.  Thankful for the help rendered & care showered on us for a worry-free stay.

Sat 29 Mar: Blessings of rain to Guaramiranga city with drought. Trip to Guaramiranga, the smallest town in Ceara with an altitude of 865m 110km equivalent to 3 hours drive from Fortaleza.  The waterfall was dry due to drought.  We had 2 days of rain, a blessing for beautiful days.  We were rewarded with cool weather and a view of the gushing waterfall.

Sun 30 Mar: Being still and quiet.  Rain brought us to a chance to pause and enjoy just being, instead of the helter skelter of daily chores.  We enjoyed a night of Slovakian home made apricot Schnapps, caipiranha and beer, with a slow dinner with CSC friends from Europe Eoin (Ireland), Rene (Switzerland), Julius (Slovakia), Martina and Christine (Germany). And had a lovely morning of fishing and admiring the rain fall.

Looking forward to gratitude jar experiences next week with the CSC Brazil 17 team!

Above photos were taken by Anne Phey at Ao Nang Beach, Krabi, Thailand in March 2014