The shift to cloud and real-time analytics has disrupted every legacy company in enterprise tech, forcing major adjustments with regards to operations, investing in new divisions and pruning those that will have relatively little use in the future.

At IBM Edge 2016, Dave Vellante (@dvellante) and Stu Miniman (@stu), cohosts of theCUBE, from the SiliconANGLE Media team, met to analyze and discuss the shifting state of IBM’s cloud-first strategies, as well as the influence its business operations might have on other companies and the market at large.

Forging a path

Looking at some of the recent changes IBM had made, Vellante said, “What’s left is the remnants of IBM’s massive hardware business.” He questioned how IBM will shape its growth in the near future, to which Miniman felt that at least in some areas of their development, “it’s a lot about how [Linux and the cloud] tie into these infrastructures.”

According to Vellante, “IBM has sort of pivoted … a complete opposite of what HPE and Dell are doing … . Its shed its lower-margin x86 [server] and some of its networking.” He then proceeded to examine how, as he put it, “IBM has really been aggressive … in driving power partnerships.”

The economic and innovative influence of China was also put on the table, with an exploration of its chip situation driving the conversation. “China couldn’t get the latest and greatest chips … so they made their own,” Miniman said, leading into discussion of the international barriers for certain tech and the effects those barriers were producing.

IBM’s playbook

Another point of interest was in IBM’s business strategies. “IBM recognized that the research and development expense of competing with the likes of Intel and Oracle was very expensive … . IBM’s taking a play out of the Linux book, in my opinion … and it successfully moderated Microsoft’s monopoly,” Vellante asserted. “IBM figures, ‘Let the ecosystem drive innovation,’” he added.

Miniman agreed, citing IBM’s “long legacy of how they deal with open-source … and that’s a foundational layer for everything that they’re doing.”

Vellanted continued: “Software … that’s where IBM plans on making its margins,” and he noted how “EMC and HPE are arms dealers to the cloud, whereas IBM has a captive channel.” Vellante also looked at how IBM was bringing “services into the cloud, and focusing on [a hybrid strategy].”

Keeping it clean

Along with IBM’s organizational arrangement, particularly in regard to executives, the company’s division handling came under examination. “By jettisoning and selling its x86 business to Lenovo, that has opened up some huge opportunities for IBM,” Vellante said, adding that “the whole world is moving toward hyper-converged, and [IBM] just sold off their networking division.”

Miniman speculated: “IBM doesn’t have an Intel box anymore … I wonder if they’re just going to cede this part of the market. Maybe they’ll just offer the software, and they partner for the hardware.

He continued: “IBM doesn’t have hyper-converge yet, and they don’t have networking. … How are they gonna fit in the mix? … For hyper-converged, all these guys are going through some churn and fighting each other for control.”

Vellante responded by saying, “IBM is using a lot of its old plays that worked well … but it’s a captive business.” But he added, “The difference is bringing in a lot more partnerships through technology,” as the focus moved toward IBM’s work to clear itself of departments and divisions that form clutter and aren’t essential to future operations.

“You’re seeing this very large company slowly turn and aim for the future,” Vellante said. “The future, I think, is bright, but still a lot of questions here. You’re really starting to see the IBM strategy come into focus.”

Watch the complete video interview below, and be sure to check out more of SiliconANGLE and theCUBE’s coverage of the IBM Edge 2016.

Photo by SiliconANGLE