As February comes to a close, we can see just which tech companies managed to keep their footholds and which businesses lost ground to their more innovative competitors. The findings show that longstanding American tech institutions are losing significant market influence, while smaller, lesser-known upstarts are only gaining.
Take, for example, IBM: after specializing in business tabulating procedures for the last twenty years of the 19th century, the company was incorporated in its current form in 1911. From there, it grew into a computer producer, analytics powerhouse, and infrastructure hosting agency. Even being entrenched in the industry for more than 100 years, IBM stocks are showing losses in 2014. Year to date, the company has lost $4.78 on its stocks, almost a full percentage of their worth. On the other hand, groups like Akamai Technologies, Inc. and Juniper Networks have seen 32% and 24% growth, respectively. Where are IBM and older companies like it going wrong?
Outdated Hosting Methods Need to Stay in the Past
The issue for IBM lies in its continued reliance on physical hardware. Before cloud computing appeared in the foreground, businesses were left to rely on physical servers for their IT infrastructures. For a long time, the dedicated server hosting solutions offered by IBM were the best way to get the job done. After all, dedicated servers brought renewed security, complete server control, and added business mobility.
The problem? Cloud computing moved into the picture, improving on literally everything that physical dedicated servers had done before. Even security, which many critics claimed would take a hit on cloud-based systems, seems to have improved under the new technology, with 94% of business owners claiming they've seen significant security benefits since making the switch. Despite offering their own cloud services, IBM's stubborn reliance on outdated technologies caused the company's revenue to drop from $29.3 billion in January 2013 to a projected $27.7 billion in January 2014. That's a huge hit for any business.
Thriving Services Make Efforts to Show Utility Everywhere
The big reason why services like Akamai Technologies thrive while IBM continues to flounder is really quite simple: they focus on innovation and utility. When you read that, you need to realize that they don't just show potential business partners their utility, they demonstrate it to the entire world whenever possible. Akamai has delivered more data, in the form of video, sound, and textual content, for the Sochi Olympics in two weeks than it did with similar information in the two year period since the 2012 London Olympics. Delivering content to NBC and a variety of other networks on an internationally important event, something you don't see IBM doing, no doubt plays a huge role in the company's explosive year.
It's interesting that both IBM and Akamai offer extremely similar catalogs of services. In theory, both should be able to deliver the estimated 23% savings on business infrastructure to companies when they outsource their server and database storage. The difference, ostensibly, lies in the varied approach and focus. While IBM continues trying to move forward with one eye looking back, Akamai charges full steam ahead toward that next bright point of innovation in the future.