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GLOBAL 2016: Results improve for venerable brands reinventing for the cloud

But an influx of challengers slows progress

Not long ago size mattered more. Because choosing the right business technology provider was so fraught with risk, the safe bet for a corporate IT manager was to hire the biggest and assume it was the best. Times have changed in in an industry being transformed by cloud computing and small disruptor brands.

And some of the disruptors are not small. A key competitor in cloud data storage is Amazon, the e-commerce giant and number 7 in the BrandZ™ Top 100 Most Valuable Global Brands ranking. Google, the number 1 brand in the BrandZ™ Global Top 100, has entered the cloud storage business, too.
Salesforce, the cloud-based consumer relationship management company, joined the BrandZ™ Technology Top 20 for the first time. And a 41 percent increase in value put Adobe, the cloud-based media and marketing company, into the BrandZ™ Global 100 Top 20 Risers. Meanwhile, more traditional business-to-business brands attempted to increase their cloud subscription revenue faster than revenue decreased in the old licensing model.
At the same time, the boundaries between business-to-business and business-to-consumer became more porous as brands prepared for a future in which the Internet of Things and smart homes will require collaborations among companies that have complementary technology, skills and customer bases. In addition, the “consumerization” of business-to-business accelerated, as a younger generation of corporate IT managers continued to harmonize the devices used for business and personal purposes.
Talent remained a key concern for the business-to-business brands. Young people generally prefer to work in technology, especially when compared with industries viewed as socially objectionable because of their negative impact on health or the environment. Even within technology, young talented individuals covet jobs at certain brands more than others.
Brands in transition
After two years under new leadership, Microsoft was in the process of radically reshaping the corporate culture to be less controlling and more open about involving technologies other than its own. In developing a public cloud available in 140 countries, Microsoft issued a developer kit instead of creating all the apps.
With the launch of Windows 10, Microsoft attempted to expand the brand’s impact in personal computing and mobility. The brand introduced the developer version of the HoloLens, an augmented reality headset that enables designers to see their plans in 3D, strengthening Microsoft’s business-to-business offering, which accounts for over half of its revenue.
Moving through a transformation to cloud computing and data analytics, IBM invested heavily in areas it calls cognitive computing, which can not only store and organize data but also comprehend and learn from it. Initially focused on several industries, IBM brands its initiatives “Watson”, the name of its cognitive platform. These businesses - IBM Watson Health and IBM Watson Internet of Things, for example - all operate in the IBM Cloud.
The businesses that represent IBM’s future performed relatively well. Cloud computing, data analytics, security and mobile computing products accounted for just over a third of total revenue in 2015. However, IBM’s legacy businesses were a drag on overall performance, and with about two-thirds of revenue coming from outside the US, the strength of the dollar impacted the business.
Established in 1939, HP executed its plan to reinvent the company for today’s world by splitting into two publicly traded entities: Hewlett Packard Enterprise, which will focus on software, cloud storage, and networking; and HP Inc. which will continue the core printer and PC businesses. Because the split, which was intended to accelerate innovation and improve customer service, took place at the end of 2015, it was too early to assess results.
Positioning in a transforming category
Meanwhile, the technology consultancy Accenture benefited from its global reach across industries, as enterprise IT departments shifted their investments from outsourcing to the cloud and other digital technologies.
With the acquisition of Altera, a maker of programmable chips, Intel accelerated its transition from a company whose success was based on developing the microchips powering PCs, to a company devoted to the connectivity needed for the Internet of Things.
SAP grew its cloud subscriptions at the same time it introduced the next generation of its Hana product, which offers a combination of deep analytics and fast results for making real-time businesses decisions. While Oracle continued to be dominant in relational database management, smaller start-ups nipped at parts of its business. A supplier of the switching equipment and other devices that comprise the Internet, Cisco was well positioned for a future that includes the Internet of Things.
Adobe boldly shifted from a boxed software model to a cloud subscription model three years ago in order to meet the creative and analytic needs of digital marketers. The subscription business grew 55 percent in 2015, representing 67 percent of total revenue. Salesforce was launched in 1999 as a cloud brand exclusively. The consumer relationship management company offers a menu of six cloud-based service packages, for sales, marketing, or customer support, for example, all on a subscription basis.
The “consumerization” of B2B
An aspect of the technology category’s transformation is the blurring of traditional boundaries between business-to-consumer and business-to-business. Factors driving this integration include the move to cloud computing, efforts to position for the Internet of Things, and a shift in business mentality from adversarial to cooperative, in which the brands both compete and collaborate, depending on the project.
Apple collaborated with Cisco and SAP to push more iPads and other devices into enterprise. The arrangement is also intended to expand availability of B2B software on Apple devices. An earlier partnership between Apple and IBM introduced more Apple products into the workplace. IBM also partnered with Facebook, pairing IBM’s data analytic strength with Facebook’s user data to enable marketers to more effectively personalize messages on Facebook.
All of these developments created a demand for talent. LinkedIn has created a successful brand as a platform to help individuals network and find their preferred employment match. It doubled the number of listed jobs to 6 million and launched an app to simplify the user experience.