Over the past few years, IBM has certainly copped its fair share of criticism in the Asian media, particularly in Australia. Whether this criticism is deserved or not is beside the point. Perception is reality — and it’s led some companies and governments to exclude IBM from project bids and longer-term sourcing deals. On top of this, the firm’s recent earnings in Asia Pacific have disappointed.
But I’ve had the chance to spend some quality time with IBM at analyst events across Asia Pacific over the past 12 months, and it’s clear that the company does some things well — in fact, IBM is sometimes years ahead of the pack. For this reason, I advise clients that it would be detrimental to exclude IBM from a deal that may play to one of these strengths.
IBM’s value lies in the innovation and global best practices it can bring to deals; the capabilities coming out of IBM Labs and the resulting products, services, and capabilities continue to lead the industry. IBM is one of the few IT vendors whose R&D has struck the right balance between shorter-term business returns and longer-term big bets.
Telstra hosted its annual analyst event in Sydney on October 23 and 24. In his keynote address, CEO David Thodey compared Telstra’s customer advocacy journey to a triathlon that the firm has just begun, which we believe it a fitting analogy for Telstra’s progress on the path it has set for itself. The company is clearly in the race and making progress, but still has many miles to go.
While the company shared a broad spectrum of initiatives, our main observations are that Telstra:
Has made clear progress since our check-in last year, but its transformation remains a work in progress. Telstra is no different than other incumbent telcos working to transform beyond traditional — and declining — sources of revenue. Its dominant position in Australia is secure, but its prospects in new market categories inside and outside of Australia are less certain. We do not believe that Telstra is particularly innovative compared with service providers in the US or Europe, but we do believe that it has a viable transformation strategy and is making progress. Its progress in the Australian media and entertainment industry, including its Foxtel investments, is impressive — it has built a large IP-based digital media file exchange platform to serve global broadcasters and content providers.