Wednesday, October 12, 2011

A Tale of Two Tech Titans, IBM and Kodak

The tale of two 100 year old tech firms is really about  thriving vs surviving.  IBM and Kodak have both been around  for over 100 years. In fact, earlier this year, IBM celebrated its 100th year.  Kodak has been around longer, going back into the 1880s, when George Eastman developed film and the first camera.

Kodak and IBM are part of American history. When I was a kid, my mom loved her Kodak Camera. Later on I got a Kodak Instamatic  and thought it was cool. IBM was there too, with the famous punch card machines that fed data into mainframes, typewriters, and the IBM PC. Today, you can see some of that history when you turn on an episode of Mad Men and watch one of the actors typing on an IBM Selectric or using a Kodak Carosel projector.

Jump ahead to 2011 and it is a very different tale for the two firms. Today, IBM is thriving, its market cap and stock price are up, but that is partly because over the years, IBM has made some very tough decisions that it often took heat for. IBM exited businesses, such as typewriters and PCs as they became commoditized (they also exited the printer business).

Kodak is not in the same place that IBM is, but it is still around (most firms from the 1800s are not).  Today Kodak is struggling to survive, partly because of the shift from analog to digital photography. People are not buying film and they aren't printing photos as much as they used to. Kodak does make one of the best inkjet printers I've used and by far one of the best scanners, but it is a crowded market.

Rochester, New York is the home of Kodak. Kodak employment in Rochester has shrunk from a high of over 60,000 in 1982 to now under 7,400. When I lived there, many neighbors worked at Kodak, but many found their careers cut short. Some were 4th generation employees.

IBM has gone through tough times too, and there was a time when it had to do some serious downsizing. IBM weathered that storm and today it is back on top, as one of the strongest Tech brands in the world.

The lesson learned here is that business survival is tough. In a digital world that we live in today in 2011, it is even tougher because new competitors can emerge out of nowhere.

There is still hope for Kodak, but these are tough times in Imaging and Printing. Just ask any camera manufacturer what they are thinking, now that Smartphones (e.g. iPhone 4S) have world class camera lenses in them.

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