Lenovo‘s Cool Fix for HPC Energy Consumption

By Charles King, Pund-IT, Inc.  March 7, 2018

High performance computing (HPC) and supercomputing haven’t always been closely associated with energy efficiency. In fact, for the first four decades (beginning in the early 1960s) of commercial supercomputing, owners were far more concerned with systems’ computational capabilities than the electrical energy they consumed.

That was mainly because of the unique value of custom-built systems like the Cray CDC 6600 (delivered in 1964) which performed highly complex calculations faster than most people could imagine. In addition, the heady price tags of supercomputers limited interest in the systems to any but the deepest-pocketed large enterprises and government labs—organizations that cared more about results than virtually any cost.

External events began to change that dynamic beginning in the early 2000s. Those points resonate in Lenovo’s new ThinkSystem SD650, a high-density commercial solution designed to maximize compute performance for HPC workloads and applications while minimizing energy consumption. Let’s take a look at how power issues are impacting HPC and supercomputing, what Lenovo has achieved and how its new ThinkSystem SD650 addresses customers’ energy constraints and concerns.

Taming the HPC energy beast

So what made energy efficiency a central issue in HPC?

  • The arrival and eventual dominance of Intel x86-based solutions that fundamentally changed the availability of and interest in commercial HPC
  • Economic crises, including the com bubble/bust and subprime mortgage debacle, along with their slow recoveries and investors’ heightened focus on companies’ short-term financial performance
  • Growing interest in renewable energy technologies, coupled with concerns about connections between global warming and fossil fuels, including coal

It should be noted that these are not equally important to every HPC customer or even individually germane in many situations. For example, Intel-based clusters that supplanted custom-built systems have helped businesses of nearly every type to access and use HPC. However, government and university research labs mostly continue to define the leading edge of supercomputing with massive installations sporting thousands or tens of thousands of servers. Those same organizations remain relatively immune to many of the financial pressures that publicly-held companies face.

That said, interest in renewable energy technologies and trends is growing steadily. To cite an extreme example, Iceland’s pioneering work in geothermal power production has made it a leader in energy-intensive computation, like bitcoin mining. Similarly, numerous countries in the Middle East are pursuing solar energy development despite the fact that they’re sitting atop some of the world’s richest petroleum reserves.

Government programs also impact these efforts. For example, many fund research into alternative energy, and regulate the cost of services to reward thrifty and dun spendthrift power customers. However, such programs can differ substantially within individual countries, including the U.S. where some states amply reward renewable energy companies and consumers while others prop-up locally-produced fossil fuel industries, including coal production and power plants.

Similar disparities exist in the U.S. response to global warming. As we’ve seen during the past year, Federal policy is highly dependent on and can vacillate significantly according to who is in power. That’s inspired officials in states, including California to formulate and implement their own climate-related policies and programs.

Lenovo’s ThinkSystem SD650

Given these widely and wildly differing points, the way ahead for global-facing HPC vendors like Lenovo is clear. That is, to focus on innovative, flexible new solutions that address and can be adapted to a variety of use cases and circumstances. The new ThinkSystem SD650 fits that scenario to a “T.”

As noted in a blog by Vinod Kamath, Ph.D., a Lenovo thermal architect, the SD650 arose from a customer project with the Leibniz Supercomputing Center (LRZ) in Germany to develop a highly powerful, highly energy efficient system for HPC. In collaboration with Intel, Lenovo developed a motherboard that uses warm water (up to 50°C/122°F) rather than air to cool numerous system components, including the processors and DIMMs.

That helps the SD650 to run considerably cooler than previous water-based solutions which only cooled the CPUs, and also required water to be chilled to a lower temperature (45°C/115°F) than the SD650. The new Lenovo systems also utilize unique heat exchanger technologies to enhance overall energy efficiency. I plan to write more about that subject in a future issue of the Pund-IT Review.

Why is innovative water cooling such an important element in the new ThinkSystem SD650? Water conducts heat (thus removing it from the server) far more efficiently than air. In fact, Kamath noted in his blog that the SD650 can deliver up to 90% heat removal efficiency—a 2X increase in cooling capacity compared to conventional air-cooled systems. In addition, cooler systems mean that their Intel Xeon processors can continuously run in “Turbo Boost” mode, thus delivering greater computational performance.

There are also other potential benefits to using water cooling. For example, the LRZ used the hot water produced by its SuperMUC HPC installation (a 6.8 petaflop cluster that was deployed in 2012 and leveraged IBM System x iDataPlex dx360M4 technologies) to heat other parts of the facility.

The LRZ is looking at a substantial upgrade with its new cluster which will consist of some 6,500 Lenovo ThinkServer SD650 systems and deliver roughly 26.7 petaflops in compute capacity, an order of magnitude performance improvement over the original SuperMUC. However, despite that massive performance boost, the SD650’s warm water cooling capabilities will result in almost no additional demands on the LRZ’s chilled water infrastructure—a critical issue for the facility.

The Lenovo SD650’s energy efficiency will also deliver substantial operational savings, a crucial point in Germany where energy costs can be 2X to 3X more than what U.S. companies are charged. Over the 4- to 5-year operating life of a HPC cluster that consumes 4 to 5MW (like LRZs), Lenovo estimates that annual facilities savings can amount to over €100,000 (or about $125,000.00 US).

Final analysis

Nothing like a “one size fits all” solution exists for HPC or supercomputing, largely because customers focus on and systems are designed for such a wide range of projects, use cases and workloads. The affordability, flexibility and scalability of Intel-based technologies have helped x86-based solutions reach and remain atop the HPC market for the past decade.

But during that same period associated issues, including energy cost, availability and efficiency have profoundly impacted the value and affordability of HPC. Climate change and its likely impact on traditional power generation resources, including hydroelectric mean that HPC customers and the vendors that serve them need to focus their attention and talents on future-focused, energy efficient alternatives.

That underscores the importance and value of innovative solutions, like Lenovo’s ThinkSystem SD650. The company’s new offering delivers the topline performance that customers have come to expect from Intel-based HPC solutions. But by means of highly imaginative and effective thermal engineering, Lenovo is delivering that performance in a substantially more efficient and less operationally expensive package.

That’s great for Lenovo’s customers and their HPC projects, of course. But it’s also excellent news for markets and a world increasingly concerned by the financial and environmental impacts of energy production and consumption.

© 2018 Pund-IT, Inc. All rights reserved.

IBM Power Systems – Balancing Technical Advancement and Mainstream Business Value

By Charles King, Pund-IT, Inc.  February 21, 2018

Next generation silicon and servers typically represent an apogee for data center-focused vendors. After months or years of development and tens of millions of dollars in investment, new systems make a clear statement about a vendor’s essential capabilities and its ability to push the limits of technical innovation.

Given the sheer cost of such endeavors, it’s no surprise that initial systems are aimed at customers whose need for leading edge performance outweighs normal budgetary concerns. But what happens after that first rush of topline, high-margin sales begins to slow? How do vendors translate and deliver the value of their new solutions to mainstream customers?

Some of those organizations are likely to put new systems through their paces, but others’ computing requirements are decidedly middle of the road or even pedestrian. IBM’s rollout of its newest scale-out Power Systems solutions offers an interesting window into these subjects and is particularly intriguing given the company’s focus on its own POWER9 silicon and other system technologies.

What’s new in POWER9 solutions

First, what upgrades and new features do the new Power Systems boast? Generally speaking, the new solutions offer about 1.5X better overall performance than previous generation POWER8-based servers. Much of that boost is due to the POWER9 SO (scale-out) chips IBM announced in December that drive the new 2-socket and 4-socket configurations.

The new systems support industry DIMMs to enhance the servers’ cost competitiveness (.vs x86-based alternatives), but they do not disappoint on capacity. In fact, the new Power Systems support 2X to 4X more memory than previous POWER8-based servers, and also offer considerably better bandwidth features than past gen solutions. Those include up to 4X increased CPU fabric bandwidth to maximize scalability, increased I/O bandwidth via PCIe GEN4 slots (and a future expansion drawer), 25Gb ports for GPU or OpenCAPI acceleration technologies and integrated support for NVMe Flash devices.

Despite these significant upgrades, the new solutions’ power requirements and form factors are in keeping with past gen Power System solutions. Plus, IBM is utilizing single chip module (SCM—as opposed to dual chip module, or DCM) packaging for all 2- and 4-socket systems. That will reduce software licensing issues common in DCM designs and also lower latency for simpler CPU-to-CPU transfers.

IBM’s new cloud-enabled Power System solutions

The new Power Systems solutions come in four upgradable models:

  • S914 – an entry level single socket 4U system available in both rack and tower designs. Available with 4, 6 or 8 cores, 16 DIMM slots, 1TB of memory, 2 CAPI 2.0 slots and integrated IBM PowerVM virtualization. Operating systems include IBM AIX, IBM i and Linux.
  • S924 – an entry level dual socket 4U rack system. Available with 8, 10 or 12 cores, 32 DIMM slots, 4TB of memory, 4 CAPI 2.0 slots and integrated IBM PowerVM virtualization. Operating systems include IBM AIX, IBM i and Linux. IBM notes that the S924 offers considerably more memory capacity than comparable x86-based 2 socket systems.
  • S922 – an entry level 1- or 2-socket 2U rack system designed for high density deployments. Available with 4, 8 or 10 cores, 32 DIMM slots, 4TB of memory, 4 CAPI 2.0 slots and integrated IBM PowerVM virtualization. Operating systems include IBM AIX, IBM i and Linux. IBM notes that the S922 leads the industry in memory capacity compared to x86-based 2 socket systems.
  • L922 – an entry level 1- or 2-socket 2U rack system designed for high performance/security Linux-only deployments and applications. Available with 4, 8 or 10 cores, 32 DIMM slots, 4TB of memory, 4 CAPI 2.0 slots and integrated IBM PowerVM virtualization. Like the S922, the L922’s 4T of memory footprint leads the industry compared to x86-based 2 socket systems.

IBM emphasizes that all four of its new solutions are “cloud-enabled” in the sense of supporting highly flexible and powerful virtualization and management tools. Those mirror the ease of public cloud solutions and significantly simplify on-premises private cloud deployments, processes and maintenance. They can also be easily integrated with a range of services and solutions from IBM Cloud.

That’s all to the good, but the overall price/performance of the new offerings is also significantly better than past-gen POWER8-based servers and x86-based competitors. That underscores a prime strategic point for IBM – continuing to develop solutions that keep existing customers happy and faithful while also expanding the value that Power Systems solutions offer to prospective customers, especially owners of x86-based servers.

Mainstreaming innovation

Many of the features outlined above will enhance the value of system upgrades for IBM customers but it’s also worth considering where the new systems stand in terms of the POWER9-based AC922 Power Systems the company introduced in early December. Those solutions fully exploited the robust memory and fabric capabilities of POWER9 to optimally support artificial intelligence (AI) applications and associated machine learning (ML) and deep learning (DL) processes.

These newest servers focus squarely on mainstream workloads, like the traditional database and SAP HANA-enabled applications used by thousands of IBM Power Systems customers running AIX, IBM i and Linux. Garnering better performance and lower costs (via software licensing changes) are critical points for those organizations, including smaller and medium-sized businesses.

Despite the wooing of competitors pedaling x86-based alternatives, those companies continue to buy, deploy and be fully satisfied with the ability of IBM Power to support and secure their business-critical applications and data. At the same time, many of those same customers are exploring ways to modernize and adapt their IT infrastructures and workloads.

Private, public and hybrid cloud are certainly part of that process. But so is adopting or preparing to use advanced analytics applications and tools, including various big data offerings. Their capacious memory and high-performance fabric options will make the new higher-end Power Systems S924, S922 and L922 ideal for mainstream customers exploring analytics options.

It should also be noted that the new POWER9 solutions are well adapted for the evolving needs of core IBM operating system constituencies, including users of the company’s homegrown AIX and IBM i, as well as those dedicated to Linux. The needs of these clients are particularly important to IBM given the years or even decades of past engagements the relationships represent, and the roles they play in the continuing health of IBM’s OS efforts and investments. Satisfying those customers is also crucially important to the members of IBM’s channel community that build value-added services on Power Systems.

Final analysis

As I suggested earlier, new generation silicon and systems offer a wide variety of innovation bragging rights. Those include latest/greatest speeds and feeds and other significant achievements. But while those advancements may grab the public’s attention and media spotlight, how vendors adapt and deliver those innovations to mainstream customers is more strategically important and commercially impactful.

The new POWER9-based Power Systems S914, S924, S922 and L922 all demonstrate that IBM clearly understands the importance and practical value of that process. The new solutions offer immediate, significant performance benefits for existing and legacy applications. Plus, they pave the way for customers exploring or adopting transformative analytics applications and other modern solutions.

Overall, these new solutions find IBM doing what it does better than the vast majority of its competitors and continuing the chain of innovation evident in eight previous generations of POWER silicon and Power Systems.

© 2018 Pund-IT, Inc. All rights reserved.

Lenovo Surfs “Three Wave” Strategy to Success

By Charles King, Pund-IT, Inc.  February 7, 2018

Consistency may be, as Emerson noted, the “hobgoblin of little minds,” but for performance-focused analysts and investors it can qualify as the difference between a company “walking the talk” and one muttering incoherently in an alleyway.

Why is that the case? Partly because it helps clarify central points for market-watchers who hope future events can be prognosticated from today’s tea leaves. In other words, the more often and regularly a business achieves its goals, the more likely they are to repeat themselves.

Plus, reaching or exceeding those touchstones also signals that a company and its leadership knows what they are about organizationally and in market terms. Those are good points to consider when examining Lenovo’s latest 2017/18 Fiscal Year Q3 earnings report and the light it casts on the company’s overall performance and market prospects.

Riding a triple wave

So what did Lenovo report for Q3? First and foremost, that it achieved positive overall revenue growth, with a 6.3% increase year over year (YoY) and a 10% sequential increase (over the previous quarter). That included significant gains in its PC and smart devices (PCSD) organization and Data Center Group (DCG), and as-expected performance from its Mobile Business Group (MBG, the home of its Moto Z solutions). That delivered a strong uptick in pre-tax income growth to $150M, 4X better than Q2 and 50%+ YoY.

Lenovo’s leadership, including CEO Yang Yuanqing, attributed this success to Lenovo’s “three wave strategy” which emphasizes,

  1. Leadership in PC and Smart Devices by balancing industry-leading profitability with an emphasis on consumer, commercial and SMB customer segments. Each segment has full end-to-end accountability and ownership of its business.
  2. Growing and diversifying the Mobility Business and Data Center groups into new profit centers. These efforts include simplifying the MBG portfolio and focusing on key growth markets. The DCG business has been restructured around five fast-growing segments: hyperscale infrastructure; Software Defined Data Center (SDDC); High Performance Computing (HPC) and Artificial Intelligence (AI); solutions-based data center infrastructure; and services.
  3. Capitalizing on promising existing/emerging opportunities, such as “Device + Cloud” and “Infrastructure + Cloud” segments powered by Artificial Intelligence (AI). These include the likes of Lenovo Connect (an MVNO-based E-SIM card that enables users to remain constantly connected/online) and the Lenovo Smart Home Assistant lunched at CES in January

No transformation in stasis

Analysts and market watchers who track Lenovo know that the company’s achievements rest on a foundation of organically-developed and externally acquired innovation, including its acquisitions of IBM’s PC and Intel-based server businesses (respectively in 2005 and 2014). But it’s important to note that while those deals both provided Lenovo immediate shots in the arm in terms of enterprise market exposure and solutions, the company did anything but sit on its laurels.

The fact is that delay and dissembling are seldom rewarded in IT markets, especially those dependent on commodity components. That reality was and is no mystery to Lenovo. Instead of faltering or fading from the scene, the company instead intelligently leveraged those acquisitions, first to achieve global PC market leadership.

That success has been complemented by increasing financial and technical success by Lenovo DCG which has also enabled the company to prove its mettle as a maker of enterprise-class desktop-to-data center solutions. This latest earnings report found the group delivering its best quarterly revenues in two years ($1.2B, up 16.7% YoY and up 25.5% sequentially) with all geographies achieving double-digit growth and margin improvements.

That was complemented by the company extending its #1 position in TBR’s customer satisfaction rankings and adding 98 new world record workload benchmarks to its leadership standing, 4+ more than its closest competitor.

Final analysis

This all points to the fact that while Lenovo continues to pursue, as CEO Yang Yuanqing noted, “Its transformation to become a world leader across every part” of its business, achieving those ambitions is not coming at a cost to clients. In fact, Lenovo’s continuing success suggests that the company’s current programs and its future-focused efforts are well-aligned with the direction of local and global markets, and its customers’ needs and anticipated plans.

In essence, Lenovo’s “three wave strategy”, along with its unwavering focus on customers has resulted in a remarkably consistent, upward trajectory. As is true of any other business, whether that will continue is difficult to predict. However, past performance suggests that Lenovo is well-positioned to thrive both expected and unexpected cross-currents, rip tides and undertows.

© 2018 Pund-IT, Inc. All rights reserved.

Is Intel Melting Down? Hardly.

By Charles King, Pund-IT, Inc.  February 7, 2018

Hang around high-tech, or any other industry long enough and you learn that headline-worthy bad news comes in mostly predictable flavors.

There’s good old executive malfeasance, often complicated by breathtaking greed and/or egotism. Plus, don’t forget what might be called Stupid Employee Tricks which can range from simple misadventures to cluelessly earnest activities whose idiocy or sociopathology is utterly lost to those involved. To be fair, not all negative headlines are internally-created, so be sure to mention shady activities by associates, like contractors and partners.

Then there’s faulty/broken technology news. Continue reading

IBM—Innovation, Investments Fuel a Transformational Journey

By Charles King, Pund-IT, Inc.  January 24, 2018

Ocean-going ships offer one of the most commonplace images for describing large enterprise behavior. You know the drill, including allusions to the difficulty of stopping or turning aircraft carriers or oil tankers “on a dime.” Plus, there are the difficulties businesses face from iceberg-like challenges whose dangers are mostly invisible or unknowable.

Such time-worn analogies often collapse into cliché, but the underlying concept has value. Why? Because though a ship may appear to travel in a straight line, the piloting process is one of non-stop motion, making countless adjustments related to constantly shifting tides, currents and circumstances. The task is also anything but rigid. Laid-in courses can be altered to account for changes in plans, and an experienced ship’s company can usually respond to expected and unexpected emergencies.

These points are worth remembering when it comes to analyzing corporate behavior and performance, especially when considering long term trends and transformational issues. They also factor into two recent IBM announcements—its Q4 and full year performance in 2017 and its 25th year of patent leadership.

IBM’s journey to date

Like other successfully sea-worthy vessels, large businesses are built for both durability and flexibility, with future-focused strategies and chains of command. That said, few corporate leaders thirst for the perils of the open sea. In fact, it seems entirely likely that some long-gone CEO penned the old Spanish/Catalan blessing/farewell, ‘”Que no haya novedad” (“Let no new thing arise”).

During the past decade or so, IBM faced and survived problems that threatened, damaged and sank some other well-positioned companies. Those challenges began with the 2007 sub-prime mortgage debacle and following global depression, events that postponed the orderly transfer of leadership from previous IBM CEO Sam Palmisano to its current chairman, president and CEO, Ginni Rometty.

Rometty took on her new role in 2011, after global economies had stabilized and began moving back from the abyss. That’s not to say her gig was a cakewalk. Fundamental changes in technology usage, particularly the rise of cloud computing and swift, massive adoption of wirelessly-delivered content and mobile endpoints, including smart phones, were shifting the ground beneath traditional IT vendors and inspiring the rise of new, highly creative competitors.

To their credit, some vendors anticipated many of these changes and began actively preparing for and pursuing new lines of business. That included IBM which, in 2012, outlined five strategic imperatives—cloud computing, analytics, security, social business and mobility—it believed offered sizable new business and commercial opportunities. The company also introduced innovations, like its Watson cognitive platform, and strategic investments, such as its acquisition of Softlayer for enterprise-focused cloud computing to support related efforts.

Competitors’ challenges

Some IBM competitors fared less well. HP, for example, which had suffered years of leadership turmoil, appeared to enjoy some badly-needed stability by naming BoD member and former eBay CEO Meg Whitman as its CEO. Interestingly, Whitman took on that role about a month before Rometty’s appointment as IBM’s president and CEO. But the pair’s experiences, and those of their respective companies could not have been different.

While IBM steadily executed shifts in its corporate and go-to-market strategies, along with associated, sometimes painful changes in its solution and services portfolios, HP stumbled from one crisis to another. Those included ongoing litigation with former key partners (Oracle), multi-billion-dollar write-downs of massive and massively failed acquisitions (like EDS and Autonomy) and “spin-mergers” that involved the sale of majority interests of underperforming HP businesses (including enterprise software and services) to third parties.

Facing continuing declining sales and margin pressure, Whitman orchestrated the split of Hewlett-Packard into two fully separate businesses—HPE (enterprise, consisting of the company’s data center assets, solutions and professional services) and HP (containing its emblematic PC and printing/imaging solutions). By doing so HP/HPE essentially exited the ranks of vendors offering integrated desktop-to-data center solutions, leaving the market to Dell and Lenovo. The new HPE positions itself as a direct competitor of vendors, including IBM and Oracle, though it relies on third parties to provide key software assets and professional services.

IBM’s 2017 Q4 and full year performance

This is not to imply that IBM’s and Rometty’s path was straight ahead and untainted by delays, misadventures and even breakdowns. Like most other corporate transformations, the experience included painful decisions about underperforming businesses and employees.

In some cases, entire business units, including IBM’s customer care call centers and its System x (Intel-based servers) group were sold to third parties. In others, product and service lines were consolidated, reduced or eliminated, resulting in substantial headcount reductions. Those were offset to a degree by expansive hiring in new, more promising areas. But the process of winding down old and spinning-up new businesses impacted IBM’s sales and financial performance, leading to 22 straight quarters of falling revenues.

That provides the context for last week’s IBM Q4 and full year (FY) 2017 earnings call which found the company delivering its highest revenue growth (nearly 4 percent) since Q2 2012. That also handily beat Street revenue estimates by nearly half a billion dollars, making Q4 the ninth in a row the company outperformed analysts’ expectations.

The “hows” of IBM’s achievement were even more impressive than the numbers themselves. Since their introduction a bit more than half a decade ago, IBM’s strategic imperatives have grown to constitute nearly half (46 percent, or $36.5B) of IBM’s revenues over the trailing 12 months. More importantly, the group’s revenue growth in 2017 (11 percent overall, and 17 percent in Q4) handily outpaced the company’s other BUs.

Of course, some imperatives did better than others, and in different ways. For example, though IBM Cloud’s $17B in 2017 revenues trailed the $20B the company’s analytics efforts (including its Watson cognitive platform) drove during the year, its 24 percent growth in 2017 (plus 30 percent growth in Q4) was far more robust.

In addition, IBM Cloud now accounts for over a fifth (21 percent) of the company’s annual revenues, or more than double what it contributed just four years ago. More importantly, IBM remains one of the strongest leaders in cloud services, particularly among enterprise customers. Competitors, including AWS, Microsoft Azure and Google Cloud are pivoting their businesses to engage those same large clients where IBM is already a preferred vendor.

Finally, IBM continues to deliver on longstanding commitments to shareholders. Consider that even as annual revenues declined from about $98B in 2013 to $79.9B at the end of 2016, IBM raised its annual dividend from $3.70 to $5.50 per common share. That outstrips all the company’s direct competitors and highlights why IBM remains a darling among income-focused institutional investors.

Patent leadership and return on innovation

Let’s take a look at another recent announcement—the January 9th press release about IBM achieving its 25th straight year of patent leadership (with a record 9,043 patents in 2017). How the company has maintained its patent leadership for a quarter century isn’t always obvious. However, if you take a close look at the IBM Research organization, you realize the group manages both its budget and its scientists’ energies to emphasize areas that demonstrate or promise significant commercial and market opportunities.

This year’s list (which is heavily weighted toward cloud, AI and security) is a good example of how IBM makes this work. All three are aligned with the company’s core strategic imperatives. It’s also interesting to consider how IBM’s funding of R&D relates to its patent leadership. Back in July, Recode published a list of companies that were top spenders in R&D. Not surprisingly, more tech vendors were in the top 20 than from any other industry.

However, if you compare that list to the new list of 2017 leading patent holders, you discover some interesting juxtapositions. Among big spenders, Amazon easily topped the Recode list by investing $16.1B on R&D in the previous fiscal year which was nearly 3X more than 13th place IBM (with $5.4B). But while IBM clearly led in 2017 patent generation (with 9,043 patents–nearly 1,000 more than last year), Amazon Technology’s 1963 patents qualified it for 14th place.

In fact, topping IBM’s 2017 patent total would require adding together the R&D efforts of the top four big spenders on the Recode list: Amazon, Alphabet, Intel and Microsoft which together generated 9,884 patents in 2017. That handily beat IBM’s 9,043 total but as Recode reported, the quartet collectively spent $55B in R&D in the previous fiscal year—over 10X the $5.4B IBM spent on R&D during the same period.

This is obviously not an apples-to-apples comparison since the time periods covered by the two reports don’t fully overlap. But it does offer food for thought about the industry- and market-leading returns IBM continually reaps from its innovation investments. The fact is that 25 straight years of patent leadership offers a company a lot to brag about. But achieving that while spending a small fraction of what major competitors are putting into R&D is simply remarkable.

Final analysis

Returning to my initial nautical allusions, what is the status of IBM’s voyage under the leadership of Ginni Rometty? In short, after successfully weathering years of rough economic seas and constantly shifting competitive tides, its performance during 2017, and particularly Q4 offers hope that the company has entered quieter, more predictable waters.

However, the vessel we see today is somewhat different than the IBM Rometty took command of in 2011. Frankly, the company is considerably more weatherly in rigging, shape and capabilities, meaning it is better able to provide for its own and its customers’ requirements to undertake entirely new adventures, and survive and thrive despite whatever chance and circumstance place in its way.

In addition, while the organization’s appearance may have changed, the continuing leadership of IBM Research shows that the company’s innovative bones remain fully intact. That qualifies as good news for today that also bodes well for the quarters, years and voyages to come.

© 2018 Pund-IT, Inc. All rights reserved.

CES 2018: Dell Blows Past Market Boundaries

By Charles King, Pund-IT, Inc.  January 10, 2018

Of the dozen or so IT industry conferences I attend annually, the Consumer Electronics Show (CES) is easily the most over the top in terms of people, products, substance and hype. That’s partly due to the sheer size of of the event, but the Consumer Electronics Association (CEA) leadership’s priorities also has a hand in the matter, especially when it comes to market hype.

In the former case, this year’s estimated 170,000 participants (down from last year’s 184k) will find Las Vegas’ vaunted ability to host parties of any size stretched to breaking. The streets will be crowded, transportation and parking will suck, and increased security due to the mass shooting last October near Mandalay Bay will make lines even longer than usual.

In the latter case, it only takes a couple of keynotes and press conferences to realize that just below its glittery surface, CES is always on the hunt for the Next Big Thing. Continue reading

IBM’s Q Network and the Road to Commercial Quantum Computing

By Charles King, Pund-IT, Inc.  December 20, 2017

The IT industry loves to talk-up cool new technologies. Though impressive, it’s typically half an exercise in PR and half self-referential backslapping. What is less discussed is the careful process and considerable effort required to bring those products and services successfully to market.

It isn’t just a matter of beating the bushes for willing clients. That’s especially true in the case of unique technologies for which no appreciable market exists. You also have to engage able, energetic partners, and work to educate potential customers.

Consider the iPhone which recently celebrated the 10th anniversary of its launch. Continue reading