IBM's Cloud Conundrum: Balancing Legacy Business with Future Ambitions

IBM's pivot to cloud computing was not as straightforward as it seems. In fact, it required navigating a complex web of contradictions and trade-offs.

The company began exploring cloud technology in the mid-1990s, when competitors like General Magic and Compaq started building business plans around the concept. IBM assigned personnel with experience in enterprise IT services to specialize in cloud-based solutions.

By 2007, IBM had launched its official cloud computing division and partnered with Google and six US universities to create a server farm supporting research projects that required fast processors for parsing massive data sets.

Academy of Management scholar Wendy Smith argues that innovation requires senior leaders to have uncomfortable conversations that question the foundation of their companies' current business models. She introduces the concept of the 'paradox mindset,' which involves holding the past, present, and future in mind simultaneously.