By Shira Ovide
Big information-technology sellers like Microsoft Corp., Cisco
Systems Inc. and Hewlett-Packard Co. were caught flat-footed as new
business-technology trends started to gain traction, such as
software sold by subscription and data-analysis tools. Now, the
behemoths are waking up and trying to claw their way back to
technology relevance.
In short, the IT Empires strike back.
The tech giants may never regain their lock on corporate
technology. But in 2015, expect them to play offense by embracing
young technologies designed to crush them, swapping out longtime
corporate leaders, forming unlikely alliances, or ditching
moneymaking businesses to reinvest in areas that show more
potential for growth.
"We can either lie down on the tracks or get on the train," said
Crawford Del Prete, chief research officer of technology-strategy
firm IDC, summarizing the big vendors' attitude.
Once unusual events became commonplace in 2014. International
Business Machines Corp. sold its profitable but low-margin
computer-server business and joined hands with consumer powerhouse
Apple Inc. in business-mobile apps. H-P, Cisco and Dell Inc. agreed
to sell generic computing equipment controlled by rival firms'
software, undercutting their own pricey hardware. Microsoft pitched
its cash-cow Office software on the iPad.
The fuddy-duddies are bound to pull out more surprises in
2015.
IDC predicts Microsoft or IBM will team up with Facebook Inc.
this year to jointly develop software services for corporations.
Microsoft watchers wonder whether the company will make a landmark
business shift by offering Windows as an annual subscription for
the first time. The biggest IT vendors will continue scooping up
startups to stay in the game, executives predict.
Wild cards for 2015: Will aging companies put out to pasture
their longtime CEOs, such as Cisco Chief John Chambers and EMC's
Joe Tucci? Will big hardware firms weigh a merger, as EMC and H-P
did for a time in 2014?
What's clear is the Empires can't sit still. IDC says the big IT
vendors' bread-and-butter businesses are shrinking or stagnant, and
predicts one-third of all corporate IT spending this year will be
in emerging areas like mobile, data analysis, cloud computing and
digital intelligence for making cars or factories increasingly
automated. That is up from about 10% of IT spending a few years
ago.
Write to Shira Ovide at shira.ovide@wsj.com
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