Wednesday, November 27, 2013
This year’s Software Analysts Insight (#swgai) event was interesting and valuable. It provided an opportunity to interact directly with key senior executives to discuss key IBM strategies, tactics and plans for 2014. Here are our observations on things of particular interest to us.
First, Steve Mills is well on his way to achieving his goal of selling IBM solutions with less focus on individual products. He anticipated the market shift away from products per se (which is accelerating) to the demand for solutions that address major enterprise challenges resulting from rapidly evolving technology, changing markets, accelerating change, etc. He confirmed IBM’s unequivocal, sole focus on addressing enterprise needs. It is not now, nor will it be, a consumer-focused company. There will be no ‘high concept’ store-barges floating in San Francisco Bay (or anywhere else) from IBM. Success depends upon IBM’s ability to anticipate enterprise demands and adapt tactics, products and messaging to fit. Their focus is on how to help their clients be successful in the markets they choose to pursue.
Second, IBM and the clients it serves must be more customer-focused and -responsive than ever. Big Data and Analytics both drive and address this move as they combine to provide customers and enterprise with informed insight to make better choices and decisions. This spurs continuous market evolution with an explosion of opportunities. As enterprises find themselves operating in a state of perpetual transformation, IT must provide the platform for speedy and agile response. Enterprises must balance optimization (of existing infrastructure and processes) with innovation (investment to change operations, functions and delivery) if they are to be successful.
Third, Cloud computing begins in the infrastructure and extends across business functions, including service delivery. Properly implemented, it provides a consistent, reliable and scalable pillar underpinning enterprise success. To truly leverage the abilities of the cloud, access to services (infrastructure, platform, software, services, etc.) must not be vendor specific. Therefore, IBM fully committed to standards-based implementations. Initially as one of the first to promote and fund multi-vendor standardization efforts, such as Open Stack, TOSCA, etc., next by building standards-based solutions based on published APIs.
IBM is one of the largest Software as a Service (SaaS) providers to the enterprise today. They believe that SaaS is becoming the dominant way enterprises will purchase and deliver new products and services. Adding to its existing 100+ SaaS offerings, IBM will expand to include their full portfolio. Other paths to the market will be maintained, but SaaS is a major part of IBM’s future.
Fourth, Watson has come a long way from its game-playing days. Today, Watson is defining the market for cognitive computing. Mike Rhodin, SVP, acknowledges these are very early days for the technology. However, its influence is already felt as it introduces big changes in the fields of Healthcare (instruction, diagnosis, billing, treatment planning), Client Engagement (service centers, guiding purchase decisions), Financial Services (product selection) and Industry (travel, retail, healthcare). Watson’s unique capabilities, including a natural-language interface that provides human-like interaction, its ability to generate and evaluate hypotheses and its ability to adapt and learn from user selection and response – have just begun to be exploited. Mike described how Watson can create questions to ask itself to learn more effectively. It can recognize conflicts or inconsistencies in its input data. It will then attempt to restructure what it ‘knows’ to remove the conflicts. Efforts to speed commercialization include building a Watson Ecosystem by providing access to Watson to IBM partners, ISVs, researchers, etc.
Fifth, IBM believes that the customer experience is and will continue to be a critical influence in sales and marketing. They also believe that today’s UI experiences, even on the latest mobile devices and smartphones, leave much to be desired in terms of style, imagination, utility and attractiveness. Necessary improvements extend far beyond creative dashboards. IBM will change that by including design to create an exceptional user experience as part of its development process. To that end, an IBM Design Center was built in Austin, Texas, and is being populated by 100’s of newly hired designers from leading Design and Art schools. These are creative arts graduates, not engineers or computer science majors who will be placed next to and work with product teams throughout IBM. IBM executives as well as employees are attending classes in creative design at the center.
IBM presents a clear, consistent message about identifying and providing solutions to, when and where the market demands. They provide convincing evidence that they and their customers benefit. The have a unique, insightful vision which is significantly different from feature/function obsessed competitors. Of course, vision alone does not translate to sales. The message still has to reach the operations and implementing staff.
Future blogs will continue the discussion including how the Cloud and Smarter Infrastructure team is designing portals to improve service delivery, simplify interaction and enhance the user experience. We will see how they plan to complement IBM’s end-to-end messaging.
Tuesday, November 26, 2013
CHANGE is definitely in the air at IBM Software. At a recent IBM Software event for analysts (#swgai), IBM revealed new initiatives and directions that could give IBM a “makeover” by using more contemporary and customer-relevant approaches for updating its solutions and customer interactions. It’s not just business-as-usual with IBM (continuing to add new features and functions to its products and solutions), and customers should start to see visible changes at IBM, such as new ways of buying IBM products and progressive approaches in its solutions.
First, IBM is changing how customers interact and use its solutions. IBM’s new Design initiative focuses on developing new ways that its software interacts with users by shifting the focus of its user interface design from task and function, to enhancing user experience. This is not just a User Interface (UI) refresh or update. It’s a fundamental shift in IBM’s approach to designing user interactions to be more intuitive, beautiful and progressive. Metaphorically speaking, this new approach could effectively “Apple-fy” (as in, taking a page out of Apple’s user interface playbook) how customers interact with and use IBM solutions. Internal IBM DesignCamp training for IBM execs and developers are propagating this new approach across IBM product groups.
For example, IBM showed us an example of an existing IBM management solution that traditionally displayed lists of alerts for administrators. The new user interface allowed users to intuitively and graphically filter the data to find the information they were interested in.
These new user interfaces are beginning to appear in some IBM products, and IBM intends to deliver it in more products as the product teams ramp up with this new approach.
More Ways for Customers to Buy Software:
Traditionally, customers purchase IBM enterprise products through their direct sales teams. Although that traditional sales channel will continue, IBM is beginning to offer “try and buy” SaaS-based software trials over the web. In response to segments of customers who prefer to try software and purchase without having to deal with salespeople, IBM is beginning to offer online software trials, and if customers like what they see, they can download it and buy it online with a credit card.
IBM is leveraging its IBM Cloud, powered by its recent SoftLayer acquisition, to enable this new sales channel for customers. The convenience of buying software online will resonate with some potential buyers, and provides an alternative way to procure IBM software.
The growth in Analytics, Embedding analytics:
IBM continues the drumbeat with analytics, as it takes its analytics capabilities and expands its use across its solutions portfolio, for example, expanding into IT Operations Analytics. IBM has a wide variety of analytics technologies, which it is leveraging in its products. And IBM will continue leveraging more of its analytics assets, incorporating more of its cognitive analytics capabilities.
New Media and Millennials:
It is clear that IBM is paying attention to the effects and influence of the millennial generation, as potential buyers and users of its solutions. The millennial generation is changing our culture societally, as well as in corporate environments. IBM is responding to this new generation of customer by changing and expanding how it reaches out to and interacts with customers. IBM is experimenting with new ways of reaching out to its customers, using new media channels and technologies that it hopes will resonate with the millennial generation.
These are a few examples of the changes that afoot within IBM. Separately, they may seem like small adjustments and changes in a large corporation like IBM. But when looking at the big picture, it reveals adaptive undercurrents that are going on within IBM that have the potential to change and “makeover” IBM in how customers view IBM and how they interact with IBM.These kinds of changes may help IBM shift away from the stereotypical industry views of IBM, and shift it toward more contemporary models. However, making changes in large corporations are a challenge and can take some time. So we’ll have to see how far-reaching these IBM initiatives become, and if IBM undergoes a major “makeover” or a minor style change.
Monday, November 18, 2013
Shortly after the Enterprise Executive Summit at Enterprise 2013, IBM held its quarterly update on the mainframe. The two thirds of Enterprise 2013 were devoted to the Power Systems Technical University and the System z Technical University. Given that IBM’s major market moves are laser focused on Cloud, (Big) Data and Security AND the continuing success and revenue contribution of the platform – it’s no surprise that System z got lots of attention. The mainframe, launched on April 7th, 1964, is the longest lived (50 years next spring) IT processor architecture, so don’t expect IBM’s spotlight to shift away. IBM is well into a campaign to expand the knowledge about and fame of today’s mainframe, System z. Their message and efforts boil down to the following.
IBM is out to assure that the unique capabilities and history of the mainframe are known in IT, in education, in executive offices and by consumers of IT services. The object is to eliminate misconceptions, strengthen the understanding and appreciation of what is increasingly recognized as a very cost effective solutions platform. They are undertaking a more aggressive information campaign both inside IBM and in the general market. The campaign includes the nearly decade old IBM Academic Initiative for System z and its Master the Mainframe competition. The competition attracted 5,200+ US and Canadian competitors, 925 from the U.K., 1,000+ from India and more from over 549 (out of 1000+) participating universities and colleges worldwide. Participating schools included: West Texas A&M (3 top finishers), University of Ottawa, Budapest University of Technology and Economics, Wroclaw University of Technology, MIT and Princeton. IBM has launched a similar introductory program for high schools, which is already showing positive results.
Program benefits were described by the most recent competition winner, now working as a mainframe specialist, described his path to winning the challenge to an executive audience. A young woman, whose high school teacher introduced his science class to the mainframe, changed her career goal from CSI Technician to IT. Now, a college Computer Science major, she told her story (and offered her resume) to IT executives and managers at the event.
First, let’s be really clear that IT infrastructure matters. IBM is clear that the enterprise is not the exclusive domain of the mainframe; other platforms effectively operate there as well. Today’s enterprise data centers depend upon and leverage a broad range of applications, workloads and services. Not all of which require a mainframe solution, and IBM provides platforms to meet those needs. However, both globally and in the US, the Big Data platform that dominates is the mainframe. For example, some 80% of the world’s and 2/3 of US enterprise Big Data resides on the mainframe. IBM is closing on the 11th consecutive year-over-year of growth in both revenue and MIPs shipped.
Second, it’s IT economics and the requirements of the workload, application or service that should determine platform choice. The analysis includes application needs for performance, operations, architecture, as well as business and economic components. It includes Total Cost of Acquisition and Ownership to be complete. Sometimes, the best choice is a mix of systems. The zEnterprise provides an example, which integrates System z with the users’ choice of Power and/or x86 platforms. Workloads and functions are distributed across the platforms to greatly reduce operational expenses, capital expenses and per transaction/application, etc. metric costs. IBM customers are finding that moving the Big Data from the mainframe to a distributed server for analysis is inefficient and wasteful. They can save money; speed processing and effectively analyze more data (dynamic and static) to yield meaningful insights by pairing a PureData for (Big Data) Analytics system with the System z where the data resides. IBM works with customers to determine the most appropriate solution.
The path an enterprise takes to reshape and redefine its customer engagement model can take many forms. But it will certainly involve one of more transformative technology. Whether that technology is Big Data analytics, deploying/leveraging robust, scalable clouds, the design, deployment or integration of mobile applications or requires the highest level of security to avoid costs or create a trusted partnership, IBM has positioned the System z to play a key role. EFiS EDI Finance Service AG runs Linux on z to assure a highly secure environment for its financial customers. Nationwide Insurance realized “enormous savings in software licensing costs” by moving workloads from “thousands of distributed processors to a very small number of powerful mainframe processors”. Sicoob saved 1.5M USD in electricity costs when it moved to a System z from a distributed environment. After a somewhat skeptical reception by analysts at its introduction, Linux on z has proven to be a highly popular base for infrastructure consolidation and virtualization. Mark Shackelford, Baldor Electric’s VP of Information Systems, says, “One of the great things about System z is its ability to reduce costs. All of our Linux environments run on IFLs, which again deliver a very considerable cost saving.” These stories and more are available at: http://www-03.ibm.com/systems/uk/z/success/index.html.
What’s new and we recommend
With IBM zEnterprise models starting as low as $75K (US prices in fall 2013), the mainframe is more affordable than ever. We’d be remiss if we didn’t mention that IBM introduced new models, enhancements and capabilities for the mainframe. These included such things as: a) new data compression acceleration, b) high speed communication fabric, c) new Flash technology exploitation capability, d) analytics to monitor and assure Proactive Systems Health, e) enhancements to Hybrid Computing and new zIIP and zAAP Specialty engines. Details can be found at this IBM website: http://www-03.ibm.com/systems/z/.
We’ll conclude by saying, we left the event very impressed with IBM’s strategy, tactics and success so far. We were also impressed with the value to executives and IT staff. We saw this in the presentations and sessions we attended as well as in conversations on the show floor. But, perhaps more impressive were the discussions with attendees at the event. At meals, during breaks and social events, IT operations staff, administrators and executives were willing to discuss their experiences and success with the mainframe and IBM’s support staff. Their stories and off-hand comments provided anecdotal, informal ratification of the details provided by IBM. We recommend attending one of these events whatever platform you now use.
 65,000 competitors over eight years in 33 countries
 Other participating countries include Poland, China, India, nine Spanish South American countries, Russia, Ukraine, Kazakstan, Belarus, Mexico, Brazil, Germany, Switzerland, Austria, Spain, Taiwan
 About 2/3 of US Big Data is on the mainframe
 Or a DB2 Analytics Accelerator or PureData for HADOOP
Friday, November 8, 2013
IBM began an aggressive ad campaign (11/4) about its cloud with a full-page advertisement on page A8 of the Wall Street Journal. A replica of the ad appears at right. It clearly conveys the message that IBM's cloud technology is more widespread than Amazon's.
The ad illustrates a couple of interesting points. The graphic shows two lines one blue and the other red. IBM is associated with the color blue (as in Big Blue) by default we (correctly) assume that the blue line represents IBM and the red Amazon. The line’s length reflects the difference in the number of customers on each company’s cloud services. IBM’s blue line towers over Amazon’s red line.
Using a question format the text revels that IBM's cloud powers 270,000 more websites that Amazon's. This is surprising. Most people believe that Amazon’s cloud leads in the number of hosted websites. In the small print, we read that IBM's Cloud offerings support 30% more of the most popular websites than anyone else in the world.
The ad doesn’t provide the actual number of websites hosted by Amazon and IBM clouds. So, we checked the Top 500 Hosters at HostCabi.net (11/8/13), IBM (SoftLayer Technologies) was #2 with 358,118 and Amazon was #9 with 74,082.
Future ads will convey additional, generally unknown facts about IBM's cloud offerings. We like the idea of IBM publicizing the strength of their cloud products. So, we are happy to see this campaign. See more: www.ibm.com/getstarted and http://www.youtube.com/ibm. Very impressive. We look forward to more such ads.