Thoughts On IBM’s $100M Expansion Towards The CMO

Thoughts On IBM’s $100M Expansion Towards The CMO

August 12, 2019
Michael Brown Headshot
Michael Brown Managing Partner

downloadMost folks likely saw the news late last week that International Business Machines (IBM) is going to spend $100M to go deeper into the CMO stack. This will predominantly come in the form of beefing up their consulting business to compete with the traditional “Madison Avenue” shops as well as some increased activity in the analytics arena. While this doesn’t change things materially for the company as it relates to our Deep Dive On IBM we did notice a few interesting points worth mentioning.

First, this is just another disparate business unit like IBM Enterprise Marketing Management, IBM Social Media Marketing Solutions and IBM Digital Marketing Network and we still don’t see IBM talking like Oracle, Salesforce and Adobe about a marketing cloud or a singular entity and product suite for the marketer. This time they are calling it IBM Interactive Experience.

Second, IBM continues to follow their historical path here and have chosen yet again to go internal to expand their role within the CMO suite. At this point we count 5 products launched internally and only 3 acquisitions and only about $1.1B spent to get into and grow in this space. We believe that this mentality (build vs buy) is likely to continue.

Third, the move is obvious for the company. It is clear that IBM is the most ingrained in the client/server and on premise product world and have been looking to move into higher margin software and services for some time. This allows them to further dive into this area as the shift towards the cloud happens in the F1000.

Fourth, they also announced that they are creating an additional 10 laboratories – spaces specifically designed for clients to work side by side with IBM staffers – in 10 markets around the world. Most folks who know the ad agency world know that this is nothing new or novel.

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