InterConnect 2015 and the “New” IBM

By Charles King, Pund-IT, Inc.  March 4, 2015

I’ve covered IBM in one way or another ever since I became an IT industry analyst in the late 1990s. The first event I attended was the company’s storage organization’s first-ever analyst summit, and I was also at ground zero for IBM’s eServer launch a few months later. Since then, I’ve tracked the company’s progressive evolution that included a handful of reorganizations.

None were as fundamentally tectonic as the one instituted by Lou Gerstner after he became CEO in 1993, but that era really represented IBM’s nadir. Gerstner’s bestselling book on that period was titled Who Says Elephants Can’t Dance, but the process was more akin to teaching a phoenix to fly. Since then, despite some significant turbulence and buffeting, IBM has stayed consistently airborne.

That said, like most any major enterprise, IBM undergoes occasional shifts and shufflings that aim to rebalance the company’s assets so they are better attuned to changing markets. It isn’t always pretty – with near 400,000 employees, the process can be as challenging and disruptive as reengineering a medium-sized city. But the effort IBM began late last year may be its most significant reorganization in a decade.

InterConnect 2015 as a mirror

Prior to that, the company had steadily expanded its software organization, especially in key areas including analytics (investing some $26B over the past half-decade), cloud (spending $8B+ on internal R&D and acquisitions, including SoftLayer) and cognitive computing (where $1B+ has been spent on Watson, with more on the way). And that doesn’t touch other software-rich areas like its Rational developer tools, WebSphere application integration middleware and Tivoli system and platform management solutions where IBM has made continuing significant investments.

The result of all this has been one of the industry’s deepest and widest enterprise software portfolios, and while that’s certainly beneficial in many ways, it has also become difficult for many customers to grasp. This latest reorg aims to address just that point by breaking up IBM’s monolithic Software Group (SWG) and aligning its solutions and assets with five core strategic focus areas: cloud, analytics, mobile/social, security and commercial.

What does IBM’s recent InterConnect 2015 conference have to do with this? A couple of things. First, it combined/replaced three of IBM’s solution-focused annual customer/partner conferences: Pulse (Tivoli), Impact (Websphere) and Innovate (Rational). Second, it positioned IBM Cloud (which is led by SVP Robert LeBlanc) as an umbrella under which many of those solutions now reside.

That said, InterConnect was not what you’d call a tidy package – executives and representatives from various other company’s strategic areas were present, and the sheer size of the event (21k+ customer and partner attendees spread over two Las Vegas convention facilities) resulted in some natural confusion. But overall, InterConnect clearly reflected the company’s new organizational focus and effectively underscored the points that set IBM apart from its competitors.

Final analysis

What are those points? Three, in particular, were focal points advertising spots IBM highlighted at InterConnect 2015:

  1. The first of these, on IBM’s strengths in and focus on open technologies being fundamental to the cloud, emphasizes the company’s deep experience and continuing commitment. IBM was the first Tier 1 vendor to publicly support Linux (in 1998), and it has supported numerous open source projects since then, and made them central to its product lines and business strategies. There are certainly “purer” open source vendors out there (Red Hat and SuSE, plus innumerable developers and specialty firms), but it’s difficult or impossible to think of an enterprise vendor with more experience and credibility in open source than IBM. Given the key role that open technologies play in cloud solutions and platforms of every kind, that’s a very big deal.
  2. The numerous Watson references during InterConnect 2015 highlighted IBM’s unique technologies and intellectual property (IP). Ever since Watson’s splashy debut on the Jeopardy! television game show in 2011, no other vendor has developed, let alone delivered, a solution comparable to IBM’s. Making Watson central to new classes of cloud services is something that no vendor besides IBM can do.
  3. The third point underscored IBM’s fiscal reliability and stability. This was clearly aimed at competitors that have known or potential weaknesses and red ink they attempt to obscure with less than transparent financial reporting. Though IBM has faced financial challenges of its own, the company is pursuing what appears to be a far more sensible and sustainable path than many other cloud vendors. That’s clear in the company’s build-out of cloud data centers where it is spending about $100M each on numerous global facilities rather than sinking hundreds of millions of dollars into massive, monolithic data centers like Amazon, Apple, Facebook and others are doing. The underlying message is that whatever may happen in the future, IBM will still be reliably supporting and delivering the solutions and services that cloud customers need to do business.

Beyond those issues, IBM’s broader cloud vision and strategy were clearly explicated in keynotes by Robert LeBlanc and other IBM executives and customers. In essence, this related to services and offerings that enterprise customers need to push their businesses to the next level. Far from the gauzy, amorphous claims that some other cloud vendors rely on, IBM is focusing instead on developing and delivering workable solutions and repeatable results.

That may seem mundane to some, but they are the elemental goals that enterprises strive to achieve with their own private IT infrastructures, and public cloud services that fail to deliver similar service levels will either fail or be left behind. Overall, the underlying message at IBM’s InterConnect 2015 is that the company deeply understands and respects these points. As businesses and markets move toward a future defined by hybrid cloud, IBM intends to be and to remain at the forefront.

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