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How IBM creates and captures value through innovative technologies.

In the past 15-20 years the use of networks and web have made the spreading of ideas easier than ever. It is not until the recent motion/movement of Web 2.0 that allows emergencing technologies to grow like never before. Web 2.0 includes things such as Social Networking, service oriented business processes, and virtual worlds just to name a few. The use of Web 2.0 has changed the ways companies operate in order to acheive their mission statement. IBM is no different.

IBM is known for it's leaders in innovation, global trendsetting, the idea of being a "green company" and for it's many patents acquired by the company. IBM has over 400,000 employees worldwide including scientists, engineers, consultants, sales professionals and while not technically employees, customers are one of the most important informatin assets available. IBM has created the notion of Value 2.0 which gets it's name from Web 2.0. Value 2.0 has seven distinct rules that make for the best possible use of Web 2.0 technologies. Those rules are seperated into 3 categories:

Capitalize on new markets and business models

•RULE #1: Grab and monetize the long tail of demand.
~IBM has figured out that when customers want a particular product/service, they need to make sure that the market for it has a high and long demand. Which means that, the company needs to invest into something that many customers will want and that it is not just a fad or flavor of the month kind of thing.

•RULE #2: Customers value digital content.
~In the internet age today, many forms of entertain are digital. Music, Videos, Pictures, Games, Services, and even books. The idea of getting the most entertainment to the customers with as little "middle man" fees is the new standard. Having one create form of entertainment and being able to distribute it out to the whole world in such a short time gives not only IBM the edge, but any company that is willing to follow this rule.

•RULE #3: Virtual Worlds are real business
Making an alternate worlds has a large market. Having a world/dimension/place for people to go to get away from everyday life is becoming a big thing. Most notably in MMORPG(Massive Multiplayer Online Role Playing Game) customers are willing to pay money to have something they can not realistially touch or do in real life. The most well known form of an MMORPG is World of Warcraft. As of 2010, is has over 12 Million Players WorldWide. Another interestig note is that all players have to pay $15 dollars a month just in order to play the game. This does not include any of the "products/items" bought in the game itself. Even if all 12 Million players only played World of Warcraft for 1 month, it would rake in over $180 million in just subscription fees!


Get closer to markets and customers

•RULE #4: Information Accumulation through networking
~IBM knows that data/information on almost any subject in the world is easily accessible to anyone with an internet connection. IBM has used this to target and find out what customers want and what markets they are looking to spend their money on.

•RULE #5: Embrace customers.
~Once a company has a customer base not only is adding more customer important but keeping customer loyalty is important as well. Most customers tend to look for the latest and greatest and will not hesitate to "jump ships" if they feel they can get better service/products somewhere else.

•RULE #6: Use social networks to create solutions.
~The most common example would be typical FAQ(Frequently Asked Questions) but on a much bigger scale. IBM wants the world to know that it has solutions to many things and that once you find your solution spread the word that IBM has it. This in turn will create a ripple effect and will continue to grow.

Create new capabilities

•RULE #7: Embed flexibility in business models and information systems.
~IBM knows the importance of being "fluid" and adjusting to whatever is coming. Once a new idea has been put into place, they make sure that if something were to change or must be done differently it will be done quickly. Doing so gives IBM the notion of being "on the edge" and forefront on innovation.

•RULE #8: Foster rapid, collaborative innovation in the enterprise.
~IBM not only encourages it's employees to talk to one another but encourages it's customer base to talk to one another. The notion of spreading ideas around, will allow things to be bounced off of many different thinkings and produce many different views and opinions. IBM is known for it's culture of spreading ideas all around to be innovation driven.

Sources:
http://www-935.ibm.com/services/us/index.wss/ibvstudy/gbs/a1029189?cntxt=a1005266