This year marks a turning point in IBM's history. With year-over-year declines in both revenue and operating pretax income, IBM is shifting from its five-year-old Smarter Planet strategy and moving forward with a stronger focus on big data/analytics, cloud computing, and systems of engagement. However, with many of its competitors focused on the same areas, IBM will have to determine how to leverage its brand to differentiate for the future. The beauty of Smarter Planet was that it not only defined and elucidated IBM's strategic road map, but also provided a perfect platform for innovation, culture, experience, and communications-the essence of a great brand positioning.
A partnership with Apple was announced in mid-July 2014 and will bring together IBM's analytics and enterprise-scale computing with the elegant user experience of Apple products to deliver a new level of value (and, potentially, an exciting new approach to technology) for businesses. The alliance will bring businesses the devices, services, security, and integration they need to exploit the full potential of mobile. While Apple will benefit from increased penetration into corporations, for IBM's part, gaining access to popular devices will give it the leverage it needs to compete with rival companies offering similar services. If the partnership blossoms, the input of billions of data points from iOS devices could greatly enrich IBM's analytics.
Continuing to drive innovation, IBM invested USD $3.1 billion in 10 acquisitions, USD $3.8 billion in net capital expenditures, and USD $6.2 billion in R&D. At this level of commitment, it's no surprise that the company earned the most U.S. patents for the 21st straight year. In early 2014, for example, IBM formed the IBM Watson Group to solve the most formidable challenge the information economy has created: how to make decisions based on all the data that exists. In light of the growing importance of big data, and the coming age of artificial intelligence, it's a wise R&D objective.
With this clear eye to the future, the company also unveiled TrueNorth in 2014, a brain-inspired "neurosynaptic" computer chip that can be used in conjunction with other cognitive computing technologies to create systems that learn, reason, and help humans make better decisions. Given its potential to fundamentally change computing and transform science, government, business, and society, this technology may be the basis of another turning point for one of the world's most ingenious and authentic brands.