IBM and Sun Microsystems in the 90s each avoided the idea of purchasing Apple, are now contemplating a partnership, according to reports in the Wall Street Journal and MacNews.com.
The idea of the two companies partnering is particularly interesting given their histories of partnerships and the acquisition plans both drew up on more than one occasion during Apple’s lowest points in the 1990s.
Like Steve Jobs once did with Apple, Sam Palmisano, former CEO of IBM, restructured IBM to eradicate its complexity to better match his skills and experiences. The result has been a company that may not have always been the best brand on market but often has the optimal profitability. In a world of too many generic offerings, both companies were able to differentiate themselves using their own secret formula.
As well, both companies are distinctively trying to fight the trend to focus almost exclusively on price competition and are hoping to increase value so that they can justify higher margins and enhance customer service.
Both companies have a long track record for customer and employee loyalty and are relatively unconventional in their ability to get buyers to publicly praise them and their products. While the Apple fan base is well known, what isn’t well known is how hard it is to get IT buyers to praise them for their service. At IBM, there are several businesses — such as Visa and HyGen Pharmaceuticals — that are consistently advocating for what IBM does.
Apple is well-known for embedding their marketing initiatives deeply into the company’s vision and making choices based not on what engineers feel is the right thing to do but are based on what customers are hoping to buy. This marketing focus is not something that IBM has implemented just yet– although it should be — because many of its market-leading products aren’t of interest to their customers.
IBM, on the other hand, is known for quality, and in its market has to drive to achieve success. Apple has good quality, but it is generally differentiated by perception. Apple should bring its quality up to IBM’s levels to better match its image with the expectations of its buyers.
While we appreciate both companies’ need to keep future products secret, IBM appears to be more transparent when it comes to making people aware of problems and correcting them. Granted, this is a requirement of the segment that IBM occupies, but critics remain pessimistic that consumer electronics companies’ common method of stonewalling about problems puts consumers too much at risk.
It will be interesting to see how this partnership will play out in the near future. How will this effect each company’s customer service and sales records? Read more about the merger here.