Thursday, March 19, 2009

IBM Water Services Business will open doors for green innovation

I love this latest announcement from IBM Global Services - a new business in water purification and management that could become $20 billion in 5 years - and not just because it makes great headlines (Blue goes Green, IBM Dives into Water, Water is the New Oil... - there are tons of links out there). Its about scale. IBM's announcement leads the way for large corporations to think entrepreneurial; think "smart" - find a big problem that needs solving, apply a healthy dose of technology, innovate and get a new business going. Entrepreneurs have been thinking smart in this space; but when it comes to infrastructure kinds of issues, there is a big gap in innovating smart and taking the innovation to market and repeat the cycle. Because the business model is a little more convoluted and sustainability takes longer to achieve there is not enough VC money around and there it is too much risk for government funding other than the slow university channel. IBM will be able to bring technology, staying power as well as a business model to the green business. So it will endure and scale- hopefully. And a host of new businesses will emerge in this space. This announcement reminds me of the early days of the software industry; I am from the time when software had no business model - we were subsidised by hardware dollars. It just needed Microsoft to get big - and that spawned a whole lot of innovation in software. At that time, startups had one exit strategy - get bought up by Microsoft - and VC dollars became available. Not to mention all the other big businesses that got into the space. So that is why the IBM announcement is so great - its great for IBM (especially since water is just one of a host of other infrastructure services they are looking at) and great for launching innovation to solve a critical environmental issue. Apologies to folks who wanted to hear more about the technology - which is absolutely fascinating - maybe later..This time it is about my favourite subject - How technology+business = social impact scaled. And the fact that big business is getting into it.

1 comment:

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