A career in Big Tech. Strategy in the fifth great technology surge

When I first went to work I never once thought what I was doing as a “career.” The economy was in shambles. Japan’s auto companies were taking market share from the big three US automakers as they shuttered car plants in the major US cities. The deindustrialization of the US was in full swing. Mortgage rates were over 10%. It looked like the US economic dominance was finished. All of this right when I was getting started. At that time I was just grateful to have a paycheck.  Later I would discover we were at the start of the current great technological surge and I had unintentionally placed myself near the surges epicenter. Instead of focusing on a career, I focused on every job and how to get good at that job. The tech industry was growing so rapidly I always felt like I wasn’t qualified for the assignments given to me. They call it imposter’s syndrome today.

Act I

I had already been working in tech for a decade and a half when a headhunter targeted me for a job at IBM for their global services unit. I got the job and the team was suddenly dissolved eight months later. Knowing nothing of IBM I found an opportunity in the manufacturing division. Typically IBMers stay in the same division as they move between jobs in their careers. Since I didn’t know anybody, I didn’t know any better. What a great turn of events that was for me. First off my manager, Barbara Reynolds, was wonderful. She really cared about the people she managed and she got the most out of us in how she managed the competitive analyst team. We had moved to Poughkeepsie, NY for that job and in short order I was told to write a paper for the chairman’s office. Gerstner wanted to understand how each server group was going to compete against Microsoft, Intel and Compaq.

I was pretty nervous with this assignment as my writing skills had never set the world on fire and I was a brand spanking new competitive analyst. My analyst peers all had PhDs and that was their chosen career. Fortunately I was assigned great resources. Mike Swanson was an IBM fellow who knew what he wanted strategically from the paper. This made the paper which was technicality complex much easier to write. That and the first draft (80pages) they said was good,. Now write a summary in 20 pages. I did and they said great, now right a summery of all it in two pages. I did. They then told me he reads the 2 pager and if he likes it he goes onto the 20 pager and if he really likes it he then reads the 80 pager book. Evidently he was pleased with the paper as it stood on Gerstner’s personal IBM website for two years after I had filed it and my GM had to present it to the CEC.

Act I Intermission – Education Loading

On the strength of doing the research and getting this paper accepted I was offered a job back in global services. The VP of the unit took an interest in developing me as we had worked together in a previous company. He assigned me a slew of books to read centered on replicating an MBA in business strategy. The readings were primarily from Harvard’s Portable MBA series with titles such as The New Portable MBA (business and strategy).1 As I read the books we would apply the theory using the portfolio of services I was developing. I was using Porter’s Value Chain model to map out how our services were addressing how our customers create value in their markets. The Porter Value Chain is shown on the left side.

Nothing sets theory into deep understanding faster than application via real life problems. And yeah – having your own personal proctor motivating you to internalize the material quickly with tough questions. I think he enjoyed the sessions as well because we approached every problem form opposite ends of the spectrum. Joe would turn everything into mathematical variables and then calculate the solutions. I always worry about variables because if they are off even by a fraction the result can be totally out of whack. Therefore I used qualitative logic to Joe’s quantitative approach. We had some real knockdown drag out arguments. When he would start calling me professor I knew he longer was interested in the debate. Once, when he stumped with a variable that I didn’t recognize I returned to his office 30 minutes later. He simple said “no, no, the answer you give in live combat inside the Thunderdome stands as your answer. No take backs after the fact.” Many times he brought up topics I had no knowledge of such as how to merge some new group into IBM. Sometimes I think he argued with me simply to measure the speed of my thinking.

As I went through the portable MBA reading my prior experiences raised questions about the theory and I went in search of other tools. The second major tool I put in my strategy tool box was the five domain network model. The OSI2 domains model is pictured to left and to its right is an image of the systems OSI stack layers. Because of where we were back then in the microprocessor revolution – I would utilize the OSI system stack far more frequently to measure how much of the market my solutions were addressing as well as how fast x86 technology was maturing.

Because x86 microprocessor technology was so very new in servers, enterprise customers were in effect rolling their own solutions. Independent business units were deploying the Wintel (Windows & Intel) servers leaving IT to support the technology.

This created major pain points where the OSI layers met. Resolving the pain points were the values the services were designed to address. The image to the left shows the the logical spaces between each of the OSI layers customer IT departments would end up supporting in the face of no standards.

The last major piece of the puzzle I found was the answer to questions like what time is it in the development and lifecycle of microprocessors technology? And how could I tell what was a significant advancement in innovation and therefore was justifiable in building out new services or modifying my units strategy? Those were questions which really bugged me if I didn’t feel like I had a grip on them.

Those questions were answered when I read Carlota Perez’s Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. I will provide some examples of her model below but for more depth in understanding of her immensity of her breakthrough please visit this link. Scroll down to the section labelled the model which reflects reality – the incredible breakthrough of Carlota Perez.

Act II

On the chart above left. I showed where we were in 2005 and then how Clouds would come to dominate in the Synergy phase. As an example the ubiquity of power lines from the 3rd technology cycle were depicted during the Maturity phase to illustrate how common the technology would become. I have generalized the right side of the slide. I removed the actual words and images from the right side as it would be inappropriate for me to publicly share such information even 20 years after the slide was created. On the right side graph is an image of Perez’s five surge cycles which was utilized in published strategies from my unit. It shows a graph of what the actual data looked like from after the 2009 crash when I graphed 100 years of market data through both crashes. On the left slide image you still see the more theoretical gentle “S” curve I used prior to the onset of the 2009 crash. I would leave IBM for 9 months in 2022 and therefore the chart of the Cloud as Power lines is about all of the charts I still have.

With the tools, theory and 20 years of working experience in the fifth great technological surge I had what I needed to no longer feel like an imposter and to spend the second half of my career as a services portfolio manager and the US offering strategist. The second half of my career began in earnest when I went to work with who would become my closest friend in life, the late great Bob Neave. Bob cared intensely about IBM and I was focused totally on the strategy. We perfectly complimented one another at work and respected the hell out of one another.

The image on left is to a link to the former IBM General Manager of the Internet division in 1995. Irving Wladawsky-Berger posted during the 2009 crash and his blog page has a very eloquent outline of Perez’s theory. To illustrate just how much I ate and slept Perez’s model as well as the other tools scroll down to the 4th response from his post. 

I built so much of Perez’s technology cycles into the offering strategy, one of Bob’s peers once commented “oh please no more about those #*~# Klondike bars.” Bob and I referred to the theory as Kondratiev cycles back then. Hence the Klondike bar crack. IBM was in major cost cutting mode at that time. In the latter 2000s an order came down to reduce the offerings team by 40%. Bob was consuming tums tablets like they were tic tacs due to the enormous stress levels as he really cared about the team which he had for the most part assembled. He and two others were the inaugural offering managers in the unit. Bob progressed into offering management due to his keen business sense. He had said to me many times, the word manager is both a noun and a verb. Meaning a managers job was not just to issue orders but to actively remove any obstacles and motivate their teams.3 Sadly his drive for the job quite literately cut Bob’s life short. He was still in his 40s.

Act III

The third all-time great manager I had was Ken Haynes. We had been peers on Bob’s team. Ken took the helm in managing the team later and when an opening occurred in software services he gave me the job. It was in this job that all training and theory was applied and would assist in generating hundreds of millions in revenue for Open Source (OS) support services both commercial and community distributions,4 the commercially supported versions of the software services. When I took that job, the Open Source revenue was generated using spreadsheets for each sale! And was generating a piddling $5Mish annually in revenue. I was told this was due to IBM customers not using OS software. Total nonsense in the face of the huge growth rates in OS adoption rates in the marketplace.

Knowing where we were in the 5th great surges technology cycle enabled me to focus on building out software offerings which would tap into the monster OS growth rates. Strategy is one thing but it took a team, and the likes of people such as Hector Luna landing some of the largest OS clients. Tom Clatterbuck5 built a tool for the sales team to quickly quote, and Ken Haynes faith in my strategy as he invested in the resources required to stand the renovated offerings, new processes and tools up. It took more than those three, but they were the majors. Now I know that Arvind is the force behind IBM’s purchasing Red Hat. But what Arvind doesn’t know is that his strategy was assisted by what we did in expanding OS support services. This was because IBM managed all external fixed costs back then. Every nickel that was to be potentially spent on external goods was required to go before a review board (GSB). That requirement was put into place just as we were ramping up the portfolio and super charging revenue growth. That meant that every single deal for years to the tune of hundreds of millions of dollars had to pass through that review board. I am sure Arvind found some additional support from the executives for buying Red Hat as the board executives had to sign off every TSS (now TLS) OS deals. I am confident that the TLS revenue growth created a very solid supporting business case for IBM to purchase Red Hat!

Act IV

Since this page is not my biography I intentionally have left out many of the bits. Rather the page is how I used and continue to use Perez innovation cycle theory. Let’s conclude with the 4th great manager I have had at IBM. Chris Bonnell hired me to assist in managing the non-IBM portions, what we call Multi-Vendor Services (MVS), for some of the top 100 accounts. I had spent years building the strategy and the offerings for many of the MVS offerings, therefore this role fits me like a glove. Chris is amazing. Like Barbara, Bob and Ken she deploys my skills to maximum advantage. She is a tireless worker who constantly pitches in at night or even on weekends. All of my “Big Four” managers share that energy, intelligence and laser focus on the business.

Now I realize at my age this is the 4th act of my unintended career. Clearly I won’t finish the fifth great surge working inside the tornado of Big Tech. The end of the current technology cycle is two(+) decades into the future. I will however continue to work at documenting and contributing in the evolution of the macro-economic models and theory in the core technologies which power each cycles surge.      

  1. List of books: Competitive Advantage: Creating and Sustaining Superior Performance. By Michael E. Porter. Published by Free Press, 1985. Competitive Strategy: Techniques for analyzing industries and competitors. By Michael E. Porter. Published by Free Press, 1984. The Innovator’s Dilemma. When New Technologies Cause Great Firms to Fail. By Clayton Christensen Publisher: Harvard Business Review Press. 1997. The Portable MBA in Strategy. By Liam Fahey & Robert Randall. Wiley Publishing. 1994. The New Portable MBA (The Portable MBA Series). Eliza Collins & Mary Anne Devanna. Publisher: Wiley. 1994. Diffusion of Innovations. By Everett Rogers. The Free Press of Glencoe. 1962. ↩︎
  2. OSI stands for Open Systems Interface ↩︎
  3. Bob’s stress generated Barrett’s Syndrome which turned into cancer which then spread to his liver before it was discovered. A doctor at Duke medical put him on anti-depressants instead of doing an MRI while the cancer was spreading. We will never know what could have been if the doctor would have simply ordered an MRI instead. Bob left us in late 2010. Ironically at the very same time I developed a brain tumor that was not diagnosed until a couple of weeks after Bob’s funeral service.  ↩︎
  4. Open Source community was the free Open Source software distribution. While Open Source commercial services were the commercially supported distributions of the software. ↩︎
  5. Tom Clatterbuck was far more than someone who built tools. He built most of the MVS (non-IBM) network and server offerings during his career. Tom remains a very special person. He cares about others and is very smart. ↩︎