Recent meetings with IBM reflect forward thinking strategies

Recent meetings with IBM reflect a number of forward thinking strategies; from silicon to software, services and IT hardware. Of course no company is perfect and IBM, as reflected by their last quarter’s results, is not immune to the dynamics of markets and/or technology. Having said this, their initiatives around Smarter Planet, business analytics and Cloud are growing at (an impressive) double digit rates, as too their business in many of the world’s emerging economies, notably China, India and Russia.

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IBM Innovate2012. The Rational Software Conference, June 2012

The $845* million dollar acquisition of Telelogic AB by IBM was more than just a technology acquisition. It reflected awareness in IBM Rational that the industrial (manufacturing) sectors were important, in fact very important.

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IBM invests in the mid to small enterprise

Our observations from IBM’s General Business worldwide influencers conference leads us to believe that IBM is well positioned to make much more of a mark in the sub 1000 employee company space; having said that HP, Sun, Dell, Cisco et al are not likely to let IBM take the initiative without a fight.

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IBM Innovate 2010 Rational software developers conference

Upbeat tempo, an enormous audience of 4000 people and an inspirational keynote by Dean Kamen left me impressed with this year’s IBM Rational software developer’s conference.
Steve Mills’ keynote reminded me (not that I could ever forget) of IBM’s huge momentum in the software industry. One just has to look at their breadth and depth of offerings and number and scale of their investments over recent past to be mindful of the significance that IBM places on their software business. Interesting to note at this particular event that their embedded systems impetus, which one could argue was waning some years ago under Rational brand has been revitalised following the Telelogic acquisition. Responsibility for this programme has recently been placed under the direction of Meg Selfe in a unit called ‘Complex and Embedded Systems’.
Meg’s background appears to be ideally suitable for the Systems and Embedded role not only in recent past within IBM but also in her former experiences in both technology and management in companies such as GM and Motorola. Discussions with her and the ever insightful Neeraj Chandra highlighted IBM’s significant interest in covering more than just the software lifecycle; to that point it’s interesting to note PTC’s recent forays into the realms of application lifecycle (notably software) management with announced support of open source technologies such as Bugzilla, Eclipse and Subversion in their PLM platform Windchill. IBM’s intention is forecast to provide the (tools and) frameworks to support an extended play in the PLM space. Key to this, as always, is the engagement and support of both customers and other software suppliers – with customer needs driving more intimate partnerships. I’d be surprised if we don’t hear more on this soon.
Cloud computing. Hyperbole or fact? Fact, I believe. Although (I’d argue that) the technology is somewhat more evolutionary than revolutionary, the interest level in understanding what, how and why is at an all time high. The cloud sessions I attended were packed to the gunnels reflecting real interest on the values and application of the concept. It’s also apparent that the field is still rapidly evolving, notably within IBM. What I saw and heard at the event was skewed to the larger enterprise but what will be interesting to see is whether IBM will extend their programs to support smaller to mid-size developers and their customers; areas in which Microsoft (Azure) and Google (App Engine) and to a lesser extent Amazon (EC2) appear to currently have more significant aspirations.

Views on the IT industry in Africa –Insights from IBM

IBM’s up-beat briefing on their Sub-Saharan business was not only an eye opener on their aspirations for their business in the African continent, but so too a view into some of the unique challenges facing information technology suppliers in the region.
Notwithstanding IBM’s objectives for global sustainable growth, discussions with their executive team highlight the importance they place on Africa as a key ‘Growth Market’ of the future. The transformational opportunities that make the region unique are without doubt multifaceted and driven by wide ranging issues including geographic, geo-political, and socio-economic circumstance.   The business environment is further complicated by the unique complexities of local legislation, lack of skilled staff, corruption and poor basic infrastructure; even, albeit to a lesser extent, in the more affluent South African region.
History teaches us that first mover advantage is crucial in the IT industry and IBM is keen to take advantage of this to develop a leadership situation in IT provision in the region. Often considered to be slow to change but with robust and effective execution, IBM has frequently been dubbed a ‘supertanker’ within the IT industry. In Africa, however, their aspirations and initiatives are more akin to an entrepreneurial start –up. Plans are pragmatic but the investment intent is clear; with local offices focused in areas of more intense growth, business partners are left to develop smaller and (currently) less lucrative markets.
Yet, the opportunity in the region is significant. Foreign ventures, significant natural resources and low cost labour will no doubt drive IT investments. This will, of course, vary significantly country by country but in an environment where basics such as water and electricity are still luxuries to many, investments in infrastructure will be amongst the largest, and this is an area in which IBM excels; government, telecoms, financial services etc. Although, from a pragmatic point of view, it’s also important that growth will be supported by more than just infrastructure investment. Oil and mining are significant revenue generators but manufacturing fails to match the growth many have seen in other emerging geographies such as Asia.
One can consider these to be the formative years of the evolution of the continent; where mistakes made are still lessons to be learned. Without stable infrastructure elements such as power, telecoms and water however, the incentive to invest is thwarted by supply. The power situation in South Africa is one such example where demand has outstripped supply. Here we have a (relatively) wealthy nation, with a larger than average (in Africa) established mining, process and industrial manufacturing sectors, having to engage in load shedding (intentional power outage) to protect a total national blackout of power ; clearly a challenge to overcome if investment growth is to be maintained.
But there are many areas where Africa offers clear value for inward investors. These include capitalising on mining expertise, South Africa’s nuclear power competence (notably their Pebble bed reactor expertise) and, of course, in taking advantage of low cost local talent. With particular regard to the latter point, it was interesting to have an opportunity to see IBM’s Integrated Delivery Centre. Providing worldwide multi-lingual support for a European banking organisation, it is a clear endorsement of world class technology service capable of being delivered from Africa.
Whilst the timing of Africa’s emergence from 3rd world status cannot be guaranteed by any means, where there’s a will there’s a way. I for one am an avid supporter African economic development, being Zambian born. What is clear is that support from the international community is essential to the Continent’s transition; and this means support from not only international organisations such as the IMF, but also governments and the broader business community. To this end IBM’s expansion and support of infrastructure and industry in Africa is a reflection not only of their belief in the region, but an incentive for others to invest or face getting left behind.

IBM and Dassault Systemes – times are a changing

As most will know IBM has recently agreed to an offer to sell their PLM sales and client support operations to Dassault Systemes. Whilst many will be surprised by this news, there are many amongst us that believe that this is an inevitable culmination of many years of shifting relationship between IBM and Dassault.

Through highs and lows the IBM/Dassault relationship has been unique in its execution. Undoubtedly good for Dassault in delivering vast momentum in corporate accounts and clearly beneficial to IBM in increasing their manufacturing market coverage.

So why change? Well my take is that Dassault wants to be closer (read more in control) of their destiny and customers, and IBM’s keen to extend their footprint in manufacturing and process industries – to leverage their own software and service revenues (not necessarily with Dassault products). Of course there are many other reasons, benefits and negatives to the changed relationship (including, of course, financial); however I think it’s fair to say that due to the constraining nature of the historic IBM/Dassault relationship neither of the above core objectives was particularly achievable. For one there’s too much legacy, and second, these objectives are to a large extent contradictory in nature.

Will the move work? Well as they say, the proof is in the pudding, we’ll have to look at IBM and Dassault’s prospects and customers (and results) to see how they take to the changed landscape; and of course let’s not forget the competition that will be eager to ensure unsettled customers and prospects find a safe haven in their ecosystems. If we’ve learnt anything over the past years it’s that the customer is king. If they see value and benefit from the new constellation then it will work – the threat though is on the counter side.

An interesting move – and one that will, I’m sure, attract much more discussion.