Reacting to 10 quarters in a row of declining revenues and the abandonment of IBM’s profit target for 2015, UBS’s Steve Milunovich asked on the Q3 earnings call about IBM’s appeal to Silicon Valley startups. Giving voice to the rising conviction on Wall Street and beyond that the answer to the “disruption” of large companies is to “focus,” Milunovich stated that “they all argue of course they are going to disrupt the large companies, that the large companies basically have to break up.”

IBM’s CEO Ginni Rometty had a two-fold answer. The new areas of “higher value”–big data analytics, the cloud, social/mobile/security–grew almost 20%. IBM’s investments and offerings in these markets appeal to startups, argued Rometty, as evident by the 3,000 applications to join the Watson ecosystem. IBM can and will deliver the type of innovative, non-traditional IT infrastructure and solutions startups typically use.

Innovation…