IBM Mini-Case Study 1

IBM CASE STUDY

IBM Mini-Case Study Response

9/28/09
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Background

In 2003 IBM announced their new project: e-business on-demand. It’s a new way to use

technology to bring together formerly separate divisions of a company in a way that ensures each

division will become tightly integrated with one another. The beauty of the on-demand product

is that it allows for utility-style pricing (Shankland, 2003). Customers pay only for the

technology they use based on the shifting demands of their company, similar to the way

electricity is purchased (Spooner & Junnarker, 2002). Beyond simply selling the concept

though, IBM began working on transforming their company to serve as a model of it.

IBM’s definition of an on-demand company as stated by their CEO Sam Palmisano, is

“an enterprise (with) business processes- integrated end-to-end across the company and with key

partners, suppliers and customers- (that) can respond with speed to any customer demand,

market opportunity or external threat.” (Shankland, 2003). This strategy is a far cry from their

old one which focused on selling and servicing computers, crunching numbers and dispatching

emails (Perley Isaac Reed School of Journalism, WVU, 2009).

Issue Statement

The main obstacle facing IBM with regard to their on-demand products is confusion over

just what it is they’re selling. They marketed the product to their staff as well as their customers

as a concept, which is by nature intangible. Even IBM’s CEO Sam Palmisano conceded to some

implementation challenges, saying “It’s a bit daunting to get the message out to 185,000

engineers at IBM. They’re much more comfortable with the concept of tools than concepts.”

Indeed, much of their energy in the beginning went into simply explaining the idea of their new

service (Shankland, 2003). If the staff doesn’t grasp the concept, neither will IBM’s customers
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because they won’t know what they’re buying.

Constraints

The main constraint to getting this concept operational is that some industry

analysts believe that only 10 percent of the technology needed for e-business on-demand to

work is now in place and that many of the necessary software programs are at the basic test

stage in IBM’s laboratories (Perley Isaac Reed School of Journalism, WVU, 2009). In order

to prove to customers that this concept can translate into real productivity IBM must first

employ the principles themselves.

Decision Option- Action Recommendation

This action recommendation is concerned with giving IBM an “email makeover”

campaign that will educate the customer about the on-demand concept and generate excitement

to climb on board. In order for this campaign to succeed it must meet the following criteria:

• Make an offer that attracts the reader’s attention

• Tell a story that engages the reader’s attention

• Keep focused on a single product which may have many benefits

• Encourage the reader to explore the benefits of the product in many ways

• Make a seamless transition from one element of the promotion to another

• Offer clear, multiple calls to action

• Always use a subject line and a headline to ensure that that audience instantly sees a

message which pertains to them

• Make sure the first paragraph of copy grasps attention and compliments the value of the

offer

• Keep the paragraphs as short as possible

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• Ensure the tone of the letter is appropriate to the market

• Use a “P.S.” to restate the offer when necessary

(Perley Isaac Reed School of Journalism, WVU, 2009)

Email Campaign Example

Subject Line: Stop paying for what you don’t use- Free infrastructure consultation

Dear Kathy,

As a CIO, have you ever wished for a way to simplify and rationalize your data center-

without going to the CFO for more funding? If so, our E-business On-Demand product suite is

just what you’ve been waiting for. With our on-demand architecture, you will be able to do

more with less. Call IBM today or Chat Now with an On-Demand Consultant and schedule your

free infrastructure makeover consultation.

Imagine being able to respond with speed to any customer demand, market opportunity or

external threat, all with one system. E-business On-Demand puts you in charge and allows you

to avoid the costly hardware purchases that can plague any bottom line. Because you only pay

for what you use, you can spend time dealing with the demands of running an efficient operation

instead of trying to rationalize the high cost of an infrastructure you aren’t consistently utilizing.

Your business ebbs and flows, and your data center usage flows along with it, right?

Shouldn’t you only pay for what you use, when you use it? With our Small Business On-

Demand product line you can achieve the perfect synergy between usage and billing, allowing
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you to take on the projects you’ve always dreamed of but never had the justification.

Let’s face it: any given time you are expected to be an insightful visionary, an able

pragmatist, a savvy value creator and a relentless cost-cutter. We can help you navigate the

maze of contradictions. Call or Chat with us today and let us show you how we can help you

champion innovation within your organization.

Sincerely,

Martha Washington

Chief Executive

IBM On-Demand Computing

P.S. We’re currently offering 10% off our entire line of E-business On-Demand services for

preferred customers like yourself who contact us before October 31.

To unsubscribe from this ezine click here

(IBM, 2009, Schadler, 2003, Shankland, 2003)

Conclusion

Because IBM is selling a relatively new and high-involvement concept they must ensure that

their target B-to-B market understands the capabilities of the product. One of the best ways to

convey the message is through a properly constructed email campaign.

Update

IBM launched the e-business on-demand concept in 2003 and it appears to be going strong.

They sponsored a conference called Lotusphere Comes to You 2009 where participants were

supposed to learn how to “streamline their processes, collaborate effectively and be able to
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respond faster to change” (IBM, 2009).

References

IBM. (2003). IBM e-business Hosting maps out an on demand infrastructure for Mobil Travel

Guide. Retrieved September 28, 2009, from: http://www-

935.ibm.com/services/us/ebhs/pdf/mobiltravelguideappbriefhighres.pdf

IBM. (2009). Lotusphere Comes to You 2009. IBM e-business. IBM. Retrieved September 29,

2009, from: http://www-07.ibm.com/hk/e-business/events/archives/LTCY2009/index.html

IBM. (2009). The New Voice of the CIO: Insights from the Global Chief Information Office

Study. Retrieved September 27, 2009, from: http://www-

304.ibm.com/businesscenter/cpe/download0/183490/MM_CIO_Study.pdf?

ca=smbmmciostudy&re=uspdf

Joyce, E. (2002). Palmisano: On-Demand is Here, It’s Ready. Enterprise. Internet News.

Retrieved September 27, 2009, from: http://www.internetnews.com/ent-

news/article.php/1491151

Perley Isaac Reed School of Journalism, West Virginia University (2009). Online and Other

Email Marketing Techniques. Retrieved September 24, 2009, from the WVU eCampus Web

site: https://ecampus.wvu.edu

Schadler, T. (2003). IBM’s On Demand Strategy Goes Beyond IT. Forrester Research.

Retrieved September 28, 2009, from:

http://www.forrester.com/ER/Research/Brief/Excerpt/0,1317,33182,00.html

Shankland, S. (2003, November 12). IBM: On-demand computing has arrived. Utility

Computing. CNET News. Retrieved September 27, 2009, from: http://news.cnet.com/IBM-

On-demand-computing-has-arrived/2100-7339_3-5106577.html
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Spooner, S. and S. Junnarkar (2009). IBM talks up ‘computing on demand’. Business Tech.

CNET News. Retrieved September 27, 2009, from: http://news.cnet.com/IBM-talks-up-

computing-on-demand/2100-1001_3-963807.html?tag=mncol;txt