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(ITU) (Yonhap Interview) IBM in transition from hardware to mobile: official

All Headlines 18:30 October 22, 2014

By Kim Eun-jung

BUSAN, Oct. 22 (Yonhap) - International Business Machines Corp. (IBM), grappling with shrinking demand for hardware, is transforming itself for the more lucrative mobile and cloud market to turn its fortunes around, a senior official at the U.S. technology heavyweight said Wednesday.

"IBM is moving from a world of products and services to a world of big data, mobile, social and cloud. We're going through a huge transformation," Tim Young, the big data marketing head of IBM, said during an interview with Yonhap News Agency on the sidelines of the Big Data Conference held in Busan.

<YNAPHOTO path='C:/YNA/YNACLI~1/Down/Article/AEN20141022008500320_02_i.jpg' id='' title='' caption='Tim Young, the big data marketing head of IBM. (Photo provided by IBM)'/>

The American tech dinosaur with history of over a century has faced an uphill battle in catering to a new generation of consumers, whose first computing device is often a smartphone or tablet and who use their personal computers at work.

Earlier this week, IBM reported a marked slowdown in business in September and abandoned its 2015 operating earnings target.

Its Korean branch also scaled down last year and announced another round of restructuring in August to deal with declining profits in outsourcing and server, its traditional foothold, in Asia's fourth-largest economy.

"I think it's bad timing," Young said. "Even though the cycle may not happen as quickly as we would like and there may be some challenges on the way, I know IBM is adapting to continue to lead. I think that's the most important thing."

Despite the declining market share in the world's most connected market, Young said his company can't just walk away from South Korea. Instead, IBM is looking for ways to change its traditional market approach.

"The first challenge is making sure that your message adapts to the market," Young said. "What I like about Korea is that consumers are very educated. You have very nice conversations about capabilities, which you can't have in other places. Korea has different buyers and is more sophisticated."

Young said IBM still has ample opportunity to grab business in the faster-growing mobile industry, such as big data, analytics and cloud computing.

"We're thinking very much about lots of data and how we can do some stuff with it," Young said. "Looking at all sorts of things that Samsung is doing in that mobile world specifically, I think the opportunity is massive. I think we've only started."

He was referring to South Korean tech behemoth Samsung Electronics Co., which is heavily investing in the Internet of Things and other smart gadgets using big data.

IBM is now eyeing the faster-growing cloud computing as a new source of revenue, an area where other global tech companies, like Amazon.com, have focused. The company recently signed a deal with SAP, a Germany-based multinational software company, to become the primary provider of cloud infrastructure services.

IBM is also working with Apple, its one-time PC rival, to create iOS-specific security, analytics and management tools and will resell iPhones and iPads. The first products from Apple's mobile enterprise partnership with IBM will roll out next month.

For heavyweight tech companies like IBM, Young said deciding the right time to jump into the new cloud market is important.

"If we moved heavily into the cloud two or three years ago, there would be no market. We would have no money because there aren't enough customers, so we have to get the timing right," he said.

"We kind of ignore early adopters even though they do lots of cool, interesting things, but we have to move with the main stream market. When the main stream market is ready to embrace cloud, then that's the time we embrace cloud as well. We certainly have a lot of capabilities and also mobile as well."


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