“All the time, a product is not a commodity, you can charge premium prices, the moment it is commoditised it is the Chinas of this world who take over manufacturing.”
Today, IBM makes very sizeable profits from software and services.
Dr Andy Stanford-Clark, who rejoices in the title distinguished engineer and master inventor, represents the new face of the company.
We toured the Hursley research centre where around 1,500 staff work.
Years ago all sorts of groundbreaking computer hardware was developed on this site bought from Vickers Aviation, which had used it to build aircraft during the World War II.
Today, in an atmosphere more like a university campus than an industrial site, it is mainly a software development laboratory.
As we left Dr Stanford-Clark’s office, the LED nameplate on his door changed to say he was out, reacting to a sensor in his mobile phone.
That was a colleague’s research project, part of a wider exploration of ways of using sensors to share information between devices.
We saw various rooms set up to demonstrate the company’s innovation to visiting customers – from a mock supermarket where prices on electronic paper could be changed by remote control, to a living room where household appliances could be controlled and energy use monitored from a mobile phone.
Cloud computing
But most of the hardware and even the software on display was not created by IBM.
