Tag Archives: IBM

IBM ConnectED – Indicator of Changed IBM, ISV Digital Business Realities

What is Happening?

Changes in IBM’s ConnectED event indicate a microcosm of the scope, and pace, of evolutionary change in IBM and one of its core ecosystems of developers and partners. Established as Lotusphere and known more recently as IBMConnect, this event traditionally focused on Notes developers, with an annual fervor of discussion surrounding changes to Notes and the Notes client, and ways to adopt and adapt these into ways to build or improve business systems and operations. This year, IBM – and the event in total – stepped back toward the Notes roots, the beginnings of the event and for many, the beginnings of social business interaction architecture. The number of attendees was purposely reduced, as was the framing of the event in all of its forms (i.e., number and range of presentations, even the after-hours fun). Most significantly, the discussion focus, while still heavy on “social business,” reverted mostly toward developing and adapting within the Notes ecosystem to enable more and better ways of doing business, with “social” as an important aspect – although with more emphasis on user desires, design preferences, and utility.

The event, in sum, is an indication and celebration of business re-focus and re-invention by IBM, partners, and customers. “Social” is being subsumed into the mix, as have been Cloud and advanced analytics. And that’s changing development, partnership, and go-to-market approaches for everyone, but especially IBM. Continue reading

IBM ConnectED – Keep the Conversation Going

Wrapping up the second day of IBM’s ConnectED event – formerly Connect, neé Lotusphere – I’m struck by the conversations going on in all areas and aspects of the event.

As always, the halls and meeting rooms are populated mostly with developers, all learning or sharing knowledge about IBM Lotus, Domino, and Connections environments, capabilities, challenges, advantages, integration, and so on.

But this year’s event is, purposely, smaller than previous events in scope and focus. And this year, to quote more than one IBM Business Partner, “there’s no hot air. It’s all about making things and making them work.”

“Hot air” is probably uncharitable way of putting things. But there is a noticeable lack of hype, and of gung-ho rhetoric, particularly about Social IT and “social business.” A key theme within this year’s event is “new ways to engage,” and the sessions, demos, exhibitor stands, and hallway chats are very focused on that.

The “event conversation,” in sum, has shifted from the concept and possibilities – and hype – regarding Social IT, to a very business-like focus on development, adaptation, and application of IBM’s technologies and services into ways to engage users, buyers, sellers, supporters, and all the other Continue reading

Fireside Chat with Bethann Cregg, IBM on Cloud Data and Watson (CBS14)

On November 12th, 2014, Saugatuck Technology held its 4th annual Cloud Business Summit at the Yale Club of New York City. As with prior Summits, our event brought together more than 100 large-enterprise CIOs, CTOs and senior business, marketing and finance leaders – to explore how they can and are realizing value from the Cloud.

Saugatuck Research Fellow Mike West hosted a Fireside Chat with Bethann Cregg, Vice President, Information and Analytics Group Cloud at IBM. The discussion’s theme was “Turbo-Charging Digital Business with a Cloud-First Strategy.”

The first video clip is an excerpt of their discussion about the way in which the Cloud and Cloud platforms such as BlueMix are changing how enterprises of all sizes Continue reading

The Future of the Mainframe is Cloudy

What is Happening?

This week, IBM announced the next generation of its z Systems mainframe line, the z13. The focus of the announcement centered on four aspects: Mobile, Analytics, Security, and Cloud. As with earlier generations, the new z13 includes specialized hardware for encryption as well as data compression. Both functions are increasingly important in today’s environment of state sponsored hacking and the rising flood of data from mobile commerce and the Internet of Things (IoT).

Saugatuck finds the announcement of the z13 particularly important in light of IBM’s recent divestiture of their x86 server business to Lenovo. Over the last year, IBM has continued to increase its efforts on software and professional services. As a result, the z System is one of three server families that IBM still manufactures and sells. (The other two are the System p and the PureSystems.) Additionally, the other remaining vendors of conventional “mainframe” architecture systems (HP and Unisys) have migrated their offerings to x86-based microprocessors.

Though the primary design of new applications increasingly favors distributed compute systems (well-suited for Cloud infrastructures), the mainframe architecture is a much better match for high-performance, monolithic design. With this announcement, IBM makes the case that it is worth questioning the prevailing wisdom of using the Cloud for any and all workloads, and points specifically to ways where mainframe systems should be used, such as to support mobile device transaction processing. Continue reading

IBM’s 3Q2014 Earnings Debacle: Our Take and What Was NOT Stated

What is Happening?          

On October 20th IBM announced its 3Q2014 earnings, which were down 4 percent year-over-year and missed analyst consensus EPS by a sizable margin. This is the 10th consecutive quarter of declining earnings at IBM. Not surprisingly, the NYSE reacted quickly to the news of another IBM revenue and profit decline. Most financial and industry analysts focused on the details of the earnings and opined that IBM has been woefully slow to capitalize on the growing popularity of Cloud computing, which is gaining traction across both software and infrastructure IT spending.

More importantly, Saugatuck sees IBM’s earnings announcement as representative of the challenges all traditional IT providers are facing. Unique to IBM, however, was the announcement that IBM would back down from the RoadMap 2015 EPS plan put in place by former CEO Sam Palmisano – which has caused a broad array of financial engineering as the firm has attempted to meet its very aggressive targets, including significant share buybacks.

What the announcement indicated or stated:

  • This earnings announcement was no doubt significant as evidenced by the fact that Ginni Rometty, Chairman, President, and CEO, personally participated in the announcement. This was a first for an IBM CEO.
  • On the earnings call, and in a subsequent CNBC interview, Rometty emphasized that the shortfall was due to an execution failure in the month of September. She reiterated that the core business was solid, in her opinion.
  • At the same time, IBM re-emphasized its commitment to its strategic growth areas of Cloud, analytics, and Watson, and announced that to help focus its efforts it will create a new Cloud division – and will trim staff (eliminate layers of middle management) as it focuses resources on growth areas, and moves to become more agile in response to changing customer requirements.

Continue reading

IBM, the Cloud, SAP, and IT Provider Re-Invention

It’s no secret that IBM’s financial performance has disappointed investors and company leadership. We see part, if not much, of the blame being placed on a perception that IBM has been late in, or unable to, transition to being a Cloud-first provider of IT.

A new Strategic Perspective research note for Saugatuck subscription research clients examines this perception through the lens of the recent IBM-SAP HANA deal, providing insight into how both firms have been reinventing and repositioning themselves to be very competitive with Cloud-based business IT offerings. For example:  Continue reading

IBM Needs to Learn the “Other” Software Business

A recent IBM briefing for Saugatuck helped to clarify the breadth and depth of IBM’s Cloud / SaaS portfolio, business strategy, approach, and results. We came away with two key net takeaways:

I.         IBM certainly has a broad, deep, useful, and valuable SaaS portfolio. Almost quietly, it’s long-standing positioning as a provider of software, but not applications, has shifted. Mostly through SaaS acquisitions, IBM today is a very significant and competitive business applications provider. One big example: the $1.3 billion acquisition of HCM / Talent Management SaaS provider Kenexa in 2012 (see Forbes article).

According to our recent briefing, IBM’s SaaS portfolio now includes over 120 busienss applications – across a range of functional roles (e.g., customer service, finance, human resources, marketing, procurement, sales) and solution categories (e.g., advanced analytics, BPaaS, Smarter Cities, Watson). By our estimates, IBM is already realizing more than $1B in annual revenues from this portfolio, and we expect Big Blue to at least double their current SaaS revenues within the next 18 months as this portfolio continues to grow (by acquisition and internal development) reach 150-200 by YE2015.

II.         But given the acquired nature of much of that portfolio, IBM still faces substantial needs for, and challenges in, organization, coordination, integration, and go-to-market approaches for the assembled Continue reading

OpenStack heading for Maturity in the Private Cloud

What is Happening?

Recently several large infrastructure providers have announced acquisitions or strategic directions. Saugatuck perceives these announcements from two perspectives: they underscore the commitment of multiple large vendors to OpenStack; and they suggest a question about the functionality and/or the maturity of OpenStack. The announcements that Saugatuck views as significant are:

  1. HP Buys Eucalyptus. On September 11, 2014, HP announced that they would be acquiring long-time AWS emulator Eucalyptus. Marten Mickos, CEO of Eucalyptus and long an OpenStack holdout will now be HP’s SVP of their Cloud division. Eucalyptus’ expertise with AWS APIs makes them especially attractive to HP’s Cloud efforts as it will likely bring HP the ability to offer AWS compatible, OpenStack based Cloud which could be a boon, as usage of hybrid Cloud environments increases. However, Saugatuck also sees this acquisition as suggesting that OpenStack is lacking in a key area – which can be solved using selected functionality from Eucalyptus. Saugatuck’s assessment is that area is most likely in accurately billing for high volumes of provisioning changes that occur in a Cloud supporting numerous users.
  2. Rackspace remains an independent company. Rackspace, one of the early adopters and main contributors to OpenStack, has been looking for a buyer for quite some time, but gave up on that vision this week with the promise to become the top player in the “Managed Cloud” space. Though Rackspace continues to be an OpenStack shop, they have recently changed their positioning – reflecting a service and support focused strategy, rather than try to compete with the hyper-scale commodity vendors like AWS, Google, and Microsoft Azure. It is likely that they will face competition in the enterprise OpenStack space from HP and IBM, both companies with significant professional services and hosting experience.
  3. Cisco buys Metacloud. Cisco acquired private-cloud enabled Metacloud to help flesh out their complete Intercloud offering, which depends on interoperability with multiple vendors, based on an OpenStack backbone. Cisco has been a long-time contributor to OpenStack and was a founding member of the OpenStack Foundation in 2012.
  4. Canonical and AMD create “OpenStack in a Rack.” Canonical, the maker of Ubuntu (the most popular OS on OpenStack) and chip maker AMD have teamed up to create a pre-built OpenStack Cloud in a rack. The cloud, already completely operational is targeted at those who want to deploy an OpenStack private Cloud without the significant effort required to order and install and integrate the components.

Continue reading

2014 Cloud Business Summit – The Journey to Digital Business

I am pleased to announce some of the details surrounding our fourth annual Cloud Business Summit, which will be held November 12, 2014 at The Yale Club in New York City.

Our conference theme this year is “Innovation, Opportunity, Risk and Reward,” with the event focusing on the journey that large enterprise CIOs, CTOs, and senior marketing and finance executives are on as they optimize their Cloud investments, and begin to remake their companies as Digital Businesses. For a short overview of the event, go to: http://cloudbusinesssummit.com/about-the-event.html.

We’ve moved the Summit to a new venue this year. The Yale Club of New York has a spectacular Grand Ballroom that we will be using, along with its elegant Rooftop Dining Room. Both will provide an optimal setting for the peer-level learning and interaction that are hallmarks of our events, fostering an intimate, C-level setting.

Our program / agenda is coming together nicely, with our keynotes and panels offering unique first-person experiences, insights, and best practices Continue reading

Five Questions about the IBM / Apple Deal

What is Happening?

On July 15, IBM and Apple announced that they would enter into a partnership that would allow IBM to procure, manage, and service Apple devices, as well as have IBM develop significant enterprise applications for the iOS platform.

Some detail of the deal include:

  • IBM will offer tools to procure Apple devices, deploy enterprise applications, and manage mobile devices
  • IBM will develop 100 industry-specific applications designed to run natively on iOS
  • Apple is creating a new extension of AppleCare called AppleCare Enterprise, which will be facilitated by Apple and IBM and which will offer extended phone support, as well as on-site device repair and replacement.
  • IBM will create and provide iOS-specific backend services designed to facilitate the development and operation of iOS business applications.

Industry reaction has been varied, but almost all agree this is positive for both Apple and IBM. Continue reading