IBMers Must Look Forward, Not Back: The Hudson Valley View

If you want to truly understand the opportunities and challenges facing IBM, then tune out the Wall Street noise and take a close look at New York's Hudson Valley -- about 90 minutes north of New York City. There, you'll find examples of what's right -- and what's wrong -- with IBM as the technology giant strives to accelerate its cloud and mobile businesses.

First, the big picture: As most IBM trackers know, Big Blue's quarterly revenues have been flat or declined for 10 consecutive quarters. CEO Ginni Rometty recently abandoned a 2015 profit goal -- earnings of $20 per share -- because IBM's core businesses (hardware, software, IT services) aren't strong enough to deliver such results.

Global Shifts Impact Local Economy

Now, the micro picture. Visit New York's Hudson Valley and you'll find IBM's rich history, and ongoing IBM R&D with local college students. But you'l also find outdated views that are stuck in the 1980s; those views undermine the very transformation Rometty is trying to drive.

Yes, IBM's workforce in the Hudson Valley has fallen for decades. During the mainframe boom through the mid-1980s, IBM employed about 31,000 people in the mid-Hudson Valley. Today, that figure is under 7,000 people. The deep cuts stared in the early 1990s, when IBM faced a potential breakup before incoming CEO Lou Gerstner saved the ship by focusing on IT services.

Gradually, IBM rebounded in the late 1990s and through the early 2000s. Along the way, the Hudson Valley economy diversified a bit -- but IBM's roots were still everywhere. I was among the benefactors of those roots. In 1992 when I was a senior at Marist College in Poughkeepsie, N.Y., the company hired me as an intern. That opportunity was a springboard that launched me toward IT media -- or, more precisely, CMP Media and InformationWeek.

During my six months working in IBM in 1992, I worked with some very talented people. But I also saw a sense of entitlement among some employees. Some folks arrived late and left early. And there were plenty of long lunches at the local IBM country club. Yes, IBM had country clubs back in those days. 

Let Go of the Past

IBM sold off those clubs under Lou Gerstner in the mid-1990s. Fast forward to the present, and some former IBMers still wax poetic about "the good old days" -- when you had a job for life at IBM, and you had complete access to those upscale country clubs.

And therein resides the problem. Local media in the Hudson Valley keeps looking back -- speaking with former IBMers who resent the changes Gerstner made more than a decade ago -- instead of pointing out what's ahead for IBM and the IT industry as a whole.

For example, a joint study between IBM and Marist College continues strong. During a visit to Marist's main campus this past weekend, I heard terms like Big Data, cloud storage and software-defined networking (SDN). IBM's brand was mentioned multiple times in those conversations.

Build the Future

The big question: What is IBM doing to transform those local college students into I.T. entrepreneurs who build successful businesses in the Hudson Valley? Many of the students, after all, graduate and head off to Silicon Valley or Redmond, Wash. -- home of Microsoft. 

But the Hudson Valley could become a hotbed for IT startups. Just ask Google -- which is seeing user groups pop up across the Hudson Valley.

A prime example: The Hudson Valley's Google Developer Group met this past weekend at SUNY New Paltz, a New York State University about 20 miles or so from Marist College. During those developer groups, I.T. entrepreneurs and students discuss Android, Google Cloud Platform and plenty more.

Local Inflection Point

The key takeaway: Some members of the Hudson Valley's next generation work force see opportunities to build businesses atop Google's platforms. The same should be true for IBM, especially as Big Blue strives to attract ISVs onto the Watson platform.

Back at Marist, you'll see buildings like the James A. Cannavino Library and the Hancock Center (named after Ellen Hancock). Cannavino and Hancock both were high ranking IBMers who continue to give back to Marist -- and by extension, the Hudson Valley economy.

My hope: Those buildings -- and others across the Hudson Valley -- become incubators for next generation I.T. entrepreneurs and emerging business leaders who further strengthen the local economy. And hopefully, local IBMers -- both current employees and retirees -- celebrate those potential startups, rather than looking back on country club days that Lou Gerstner (and market realities) ended more than 20 years ago.

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