What is Happening? This year’s IBM Connect event – formerly Lotusphere – clearly affirms and confirms IBM’s company-wide and –deep commitment to the inextricably intertwined IT and business realities of Cloud, Mobile, Social, Analytics and Integration.

The event’s over-arching theme of “Social Business” established two years ago has taken hold and permeates IBM’s product and service positioning and messaging. We see IBM’s key positioning tenets of “Social Business,” “Innovation,” and “Transformation” continually carrying the message to the attendees.

However, Saugatuck sees a major challenge for IBM: Put simply, IBM risks being inconsistent or unclear in its core positioning, and stunting the effectiveness of its efforts with customers and the effectiveness of its business partners.  This opens the door for other vendors to define and articulate the market – leaving IBM as a powerful, but less influential and less profitable player.

Why is it Happening? Heading into the third day of the Connect event, Saugatuck has already sat through a handful of analyst briefings and Q&A sessions in addition to the usual keynotes and customer presentations. The three themes of “Social Business,” “Innovation,” and “Transformation” are repeated by every presenter, to the point where some of the more cynical in the audience already consider them to be buzzwords rather than doctrine.

IBM executives have been pressed in analyst sessions to define and articulate what these terms mean, and how they should resonate with customers and partners. In each case, those executives have offered their own (sometimes vague) definitions, and several have volunteered – in multiple sessions – that IBM needs to get better at articulating a consistent position.

In addition, Saugatuck has conducted about 30 ad hoc, “three-minute interview” sessions with attendees (i.e., IBM business partners and customers), informally asking them what they consider the three core themes of “Social Business,” “Innovation,” and “Transformation” to mean. While all consider the themes to be powerful in concept, few expressed agreement on actual meanings, especially as regards their own business and organizations.

After compiling summaries of the responses, we have concluded that relative to Social and Innovation – the people we talked with seem to fall into three categories:

  1. Optimists – people that appear to be near the top of the hype cycle and believe that in rather non-specific ways Social and Innovation can bring significant improvements
  2. Cynics – people that feel IT is now beginning to catch up to business and that IBM is just selling consulting
  3. Pragmatists – people that believe Social is really collaboration; that innovation is better use of IT and finding better ways to get things done.

Relative to the concept of Transformation, we find two almost universal views from the folks we talked with: 1) Transformation implies major change (which is difficult), and 2) Transformation implies a major expense (which should be avoided if possible).
Saugatuck research clients will see a premium Strategic Perspective based on these discussions next week.

Our fear regarding IBM and its market presence is not with the relatively vague, conceptual quality of IBM’s chosen terminology. For example, the term “Innovation” has formal definitions, but is as widely misused as the term “ecosystem” when it comes to IT users, providers and markets. Like “ecosystem,” and indeed like “Social Business,” the term can survive and thrive more as a concept than as a definition.

Rather we see IBM’s real risk is in being inconsistent in its own understanding and use of the terminology and concepts. Saugatuck believes that IBM’s greatest challenge in this is organizational, and possibly cultural, more than anything else. The company clearly “gets it” when it comes to Cloud, Mobile, Social, Analytics and Integration. In fact, the company is one of the best-positioned and most-capable IT providers across all five of these critical categories. They have invested big, and well. And while IBM has developed dozens of “Social Business” use cases, the concept itself almost has to remain loosely defined.

What IBM has not yet been able to do – even as it develops and promotes concepts like “Social Business” – is be consistent in its communication of those concepts. If 30 or so customers and partners at IBM’s own defining event cannot articulate or agree on the meaning of IBM’s core themes, that suggests that IBM has room for improvement in its communication and consistency.

Sadly, one message was clear: IBM’s own strategists, at IBM’s leading event for forward-thinking customers, developers and partners, have trouble seeing beyond established and traditional market behaviors, and translating the company’s core themes (e.g., Innovation, Transformation) into those markets.

For an extended version of this Research Alert, click here.

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