History lessons from the auto industry apply to cloud

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BAKERSFIELD, CA - OCT 24: Judges ponder Pierce Arrows and Ford Model Ts at the "Rolling Thru the Ages Car Show" on October 24, 2009, in Bakersfield, California

The early 1900’s saw the automobile industry awaken to a revolution of the car – a new product that would be used by the masses. Many saw the opportunity and jumped on the bandwagon.

By 1908 there were more than 250 companies producing cars. Manufacturing cars was not an easy task. Companies had to design, fabricate the chassis, engine design, assemble the components and paint, which all took extensive manpower.The main goal of entering the field was to produce profits.

Can we compare this to the cloud industry? Here are some strategic commonalities between the automobile and cloud industries:

Automobile Industry

Cloud Industry

Game changer: New way to travel Game changer: New way for IT computing
Brought affordability to masses Bringing affordability to industries
Created new job fields and expertise, and increased employment Creating new job fields and expertise, and increasing employment
Many companies were able to ride the growth curve of the product (car) Many companies are riding the growth curve of the product (cloud)

After the initial burst of growth for the automobile industry, the price of the car gradually went down. Competition was fierce and the next two decades saw a substantial drop in companies manufacturing cars from 250+ to less than 45.

In the 1930’s, many of the remaining companies were wiped out by the Great Depression. After World War II, Ford, General Motors, Chrysler and a handful more automotive manufacturers existed.

Car companies who modeled their product on innovation and worked on strengthening their core competencies survived. Ford, for example, was a pioneer in installing improved production equipment. Companies who looked to enhance the product life cycle by streamlining its organizational structure, independent of a single product or single leader, prospered. They brought new technologies and new products every decade.  Three hundred companies that simply rode the automotive growth curve did not have the insight to continually reinvent themselves, and eventually vanished.

The lessons learned from automobile industry can be applied to the cloud industry. When selecting a cloud technology provider, remember the history of the automakers. Decision makers like you should weigh the following factors:

  • Does the company have cloud products that would take them beyond the current growth curve?
  • Will the company survive a downtrend? Is the company a leader in cloud space or a follower?
  • Does the company have an organizational structure in place for innovation and for future new products and growth?
  • Is the company competitive and current in technologies?

René Bostic, IBM Technical VP for the North America Cloud Organization, says “IBM is a thought leader of the IT renaissance — driven by open source, community and culture. IBM has Watson, IBM Bluemix, SoftLayer, and Cloud Managed Services that positions clients to become disruptors in their respective industries. It allow them to focus on their core competencies while staying current in technologies.”

IBM is recognized by Synergy Research Group as the top provider of hybrid cloud solutions for the enterprise.

Come to InterConnect 2016, IBM’s premier event for cloud computing and mobile technology,in Las Vegas, February 21 – 25.  Learn more.



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