Business-to-business brands reinvent,
reorganize, and begin to recover
Cloud transition continues but shows results
Business-to-business technology brands showed financial improvement following several years of playing
catch-up, transitioning enormous, complicated global enterprises to the cloud from business models based
on hardware and devices.
Many of the initiatives seemed more
iterative than innovative, but they were
part of a long-term business reinvention
process that included workforce reduction.
Brands competed fiercely on price but also
collaborated when necessary, sometimes
blurring the boundary between consumer
These efforts to reposition companies for
the cloud and restore sustainable growth
helped drive sharp rises in value for some
brands, with Intel up 58 percent, Microsoft
up 28 percent, and HP up 18 percent.
Intel's chip business had weakened with
the decline of the PC market. Intel's share
price recovered sharply with strong sales
of server and PC chips. Cloud providers,
which are a growing Intel revenue stream,
may have driven server chip demand. Intel
also developed chips for mobile phones and
focused attention on the emerging Internet
The Microsoft improvement reflected a
change in leadership, corporate culture
and business model. In a dramatic effort to
sharpen focus, HP split the company into
two new public corporations - one focused
on the cloud and infrastructure, the other
Two brands entered the BrandZ™
Technology Top 10: Huawei, the Chinese
telecom equipment provider and mobile
phone producer, and Adobe. A maker
of graphic design software and a digital
advertising solutions provider, Adobe
rejoined the Global Top 100, having ranked
in the Technology Top 10 in 2008.
Huawei enjoyed strong profit growth as it
continued to provide economical telecom
solutions to governments and enterprises
around the world. Adobe boosted profits
by providing cloud subscriber-based digital
marketing solutions, from design to channel
Microsoft announced plans to distribute
the next version of its Windows 10 as a free
upgrade for the first year to people who
already own Windows. The initiative ensures
a high adoption rate and the Microsoft
brand looks more generous.
Microsoft also made other free software
available and released Windows for iOS, the
Apple operating system. These initiatives
depended on having desirable products,
cultivating customer relationships, and then
finding opportunities to sell customers
more premium products to improve their
businesses or enrich their lives.
This business model may not seem radical,
but it is a departure from Microsoft's former
culture, which was more sales driven and
protective. It is indicative of the company's
more flexible and collaborative approach
under its new CEO.
Microsoft's initiatives reflect a wider B2B
trend, as customers chose to pay to use a
technology product, rather than pay to own
it. SAP, for example, took a major step in
its transition to the cloud from its business
model of earning revenue from long-term
licenses for software.
SAP introduced redesigned software for
managing management functions, like
finance and logistics, in real time. Called S/4
HANA, the software can be installed on client
computers, or it can be accessed from the
cloud, or used in a hybrid of both options.
Oracle also continued its transition to
the cloud with the purchase of TOA
Technologies, and the company introduced
a server designed for compatibility with
its software, but at a competitive price.
Cisco's rebound was based on its switching
business, which drives almost one-third of
the company's revenue. (Switches are the
hardware devices that connect devices to a
Cisco's share price improved based on
the company's business evolution and the
perception that the brand is well positioned
as a provider of network and Internet
infrastructure as enterprises transition
to the cloud and the Internet of Things.
Cisco collaborated with many companies,
including Microsoft, on a cloud project.
As part of a five-year turnaround effort, HP
split the company into two businesses. One
of the new businesses, Hewlett-Packard
Enterprise, will focus on some of the growth
areas of B2B technology, including: cloud,
big data, security and mobility.
The other business, HP Inc., will leverage
the company's traditional manufacturing
strengths, in PCs and printers for example,
to develop business in related emerging
technologies such as 3D printing.
By splitting the company into two brands,
HP intends to compete with more agility and
sharper focus. Hewlett-Packard Enterprise
primarily will be a B2B brand, facing
competitors such as IBM and Oracle, while
HP Inc. is more consumer focused.
Both companies will operate with a "Playing
to Win" strategy adapted from P&G, in which
the companies compete only with the
products and in the markets where they're
well positioned to succeed.
IBM links with Apple
IBM announced massive investment in
cloud, analytics, mobile, social and security
technology. It made several important
acquisitions, and as part of its shift to the
cloud, sold its mainframe business to
Lenovo. Revenue from new businesses
increased substantially, but during this
transition, not surprisingly, net income
declined for 2014.
IBM entered a partnership with Apple. The
linkage of these two iconic brands enables
IBM to design business applications for
Apple devices. Apple gains a strong inroad
into B2B and an opportunity to sell more
Apple is not the only consumer-facing brand
active in B2B. Businesses look to Google for
analytics. Using Gmail or Google Analytics
is free or less expensive than a package of
solutions from a traditional B2B brand. Using
Google also creates seamlessness between
the technology used at work and home.
Amazon leveraged the enormous computing
power used for its online retail business to
provide cloud services for business. Chinese
e-commerce leader Alibaba opened a data
center in the US that will provide B2B cloud
services. Both Amazon and Alibaba appear in
the BrandZ™ retail category.