AI Generation: IBM and Microsoft Join Forces

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Most businesses are still unsure about how to effectively adopt generative AI because the market for the technology is developing at such a rapid pace. Microsoft, which was instrumental in popularizing generative AI, and IBM, which was the first to develop an enterprise-grade AI solution with Watson, have chosen to form a partnership to pool their respective expertise in order to better assist businesses in using the technology. IBM Consulting has the most expertise to date in delivering enterprise-grade AI, making it a natural choice for the job.

This week, let’s get into the significance of this alliance.

A tense history between Microsoft and IBM
IBM and Microsoft’s relationship has been tense for a long time. Microsoft began as an IBM partner, supplying DOS and then Windows to IBM when the latter established the non-Apple PC industry with the debut of its PC Company. Then OS/2 came out, and Microsoft saw that the market wasn’t ready for Windows, so it sought to pull back, while IBM saw OS/2 as a way to gain market dominance and control. Microsoft concluded that not only would that not work, but even if it did, it would permanently subjugate Microsoft to IBM, which was never going to happen.

It was a battle between IBM and Microsoft, with Microsoft holding the upper hand since, by the late ’90s, the roles had been reversed and Microsoft was now the industry leader while IBM was still trying to recover from its near-collapse.

Steve Ballmer, who was CEO of Microsoft at the time, and I had a meeting. He told me about a round of golf he played with Louis Gerstner, then the CEO of IBM. Gerstner was polite, but Ballmer said he gave him the impression that if he got the chance, he would “cut off Ballmer’s head and poop down his neck.” IBM’s two unsuccessful attempts to form new businesses with Apple. IBM adopted Linux in the early 2000s and utilized it to assist undermine Microsoft’s supremacy, which was mostly threatened by Microsoft’s missteps at the time.

As we entered this new decade, it became clear that both businesses had experienced similar challenges (often of their own making), and as a result, they were more inclined to view things from the other’s perspective. Another chance to collaborate with generative AI occurred when Microsoft began supporting Open Source and, astonishingly, Linux.

The strongest friendships
Over the years, I have written on and researched partnership. The majority of partnerships end in failure because the individuals involved have different goals and viewpoints for the venture. Successful partnerships typically involve businesses that have a similar history, are in agreement about the partnership’s potential advantages, and acknowledge that each partner’s success is essential to the overall effort’s success.

This is what I would call a fully formed alliance, and it has a far better chance of lasting than the previous OS partnership, which was more of a marriage of convenience. This new relationship is not just between equals but also between organizations that have learned to appreciate each other’s distinctions and benefits, in contrast to the previous one, which was built on shaky ground since IBM considered Microsoft as a subordinate rather than an equal.

In summary, the two organizations have learnt to be better partners over the years, and they are much more similar to each other now than they were when they first formed their AI cooperation, thus it has a far higher chance of lasting than their previous alliances.

To sum up
The appropriate implementation of generative AI is a challenge for any significant corporation. Microsoft has the most in-depth understanding of the technology at hand and the greatest infrastructure in place to deploy it on Azure. IBM has the expertise to train AI systems and the manpower to apply it in businesses successfully. Most AI efforts today are failing, but IBM’s experience, expertise, and persistence are a good match for this challenge.

Despite the fact that no cooperation is without its flaws, this one appears to have a good chance of succeeding since both companies have grown up and, for once, share the same goals.

Rob serves as President and Principal Analyst of the Enderle Group, where he advises local, national, and international businesses on topics such as: developing a credible dialogue with the market; identifying and responding to customer needs; developing new business opportunities; anticipating and capitalizing on technological shifts; choosing vendors and products; and engaging in zero-dollar marketing. Rob has been in the business world for almost 20 years, and his resume includes stints with Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens, to name a few.

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