Was it just me, or did you do a double take at the hoopla around IBM’s announcement to partner with Twitter (following on the heels of the equally odd partnership with Apple)? Ginny Romety and IBM have a big problem, so does Dick Costolo and Twitter. Neither is going to be saved by the other, and both will be hard pressed to keep up with Zuck and Facebook.
IBM is buying back lots of their stock. It’s about the only way they can make their numbers work until they find the next path to reinvention. IBM’s problem is the decline of MIPS and associated services they sell, globally. Don’t get me wrong, they are a stable franchise that will continue to be embraced by large enterprises, with large data enterprise needs. But, that isn’t where growth is and they’ll continue to miss their numbers. That is where stable is. Maybe they can bail Twitter out of their non-revenue and declining user interest challenge – but Twitter isn’t going to do much for IBM. (Ask your Millennial when they last Tweeted.)
What does IBM need? A next generation growth engine. There is a lot of talk about Watson. Why isn’t there a Watson ap on the iPhone or in the Google Store – it must be smarter than Siri. Give it an end point presence.
Twitter has an equally big problem. They have a real struggle to find a revenue model, sustainable engagement model and to beat out Facebook. Facebook’s experience is much richer, engaging and offers a better platform for capturing ad dollars. The only way IBM will save them is buy them and make them someone else’s problem. They will see a big uptick in use during the upcoming election cycle, but is that really going to drive revenue?
So to Facebook. Zuckerberg got pounded for being forward thinking and over investing in new ideas. See above. My money would be on Zuck. One of these days he and the team at Facebook are doing to figure out how to engage us all in a Facebook-What’s Ap-Oculus Rift world. IBM and Twitter beware.