Moderator: Peter Burris
Analyst: David Vellante
Recently several Wikibon members attended IBM's Systems and Technology Group analyst day. These sessions are held for industry influencers and hosted by key IBM executives to provide an opportunity to gain information on IBM's overall awareness of customer problems, approach to solving those problems and tactical efforts to compete in the systems and storage marketplaces.
In this meeting, several issues stood out. Most importantly, IBM strongly pushed its view that IT organizations large and small will have to take more of a systems approach, rather than a best-of-breed product approach, to satisfying their systems requirements. While for some this may be a euphemism for purchasing less capable products, a systems approach is a superior strategy for attacking the current technology challenges facing business. Specifically IBM recognized that users are focused on improving productivity in ways that cannot be accomplished without a systems perspective. For instance,IBM talked about performing more work through service oriented architecture (SOA). While we heard nothing specific at the conference about how that might work, the assumption that users will continue to increase their focus on SOA over the next few years.
We did hear about how IBM expects users to reduce resources, including costs, devoted to computing over the next few years. IBM executives identified three main approaches to cost reductions:
- Energy efficiency through implementation of “green” strategies.
- Business resilience through improvement of overall safety and security and certainty of processing.
- Reduction in the amount of wasted resources through the more aggressive use of virtualization.
These broad initiatives cannot be accomplished without a systems orientation in computing. Of course storage plays an important role in how users will work with IBM tactically to achieve these laudable goals. For instance, IBM has more than 3,000 specialists focused on virtualization and more than 3,400 SAN Volume Controller (SVC) systems being implemented. IBM sees itself as one of the two most credible storage virtualization suppliers today. Tactically we recommend that users focused on virtualization work closely with IBM on storage because its products are broadly adapted and by all accounts seem to work well.
IBM's second major initiative was archiving. Here the Wikibon community hoped to hear an overall coherent approach for how users can begin to integrate archiving practices and thereby more readily assimilate applications into a broad set of archiving strategies, something badly needed today. We were disappointed in this hope: While IBM has all the pieces, it still lacks an overall systems strategy. As a result, archiving remains a disjointed set of activities that will require significant effort from users and suppliers for the next few years.
We did, however, hear a strong message on security and encryption. About 2.5 years ago IBM made multiple aggressive promises about encryption and security in storage, and we think it has delivered on those promises. One member of the Wikibon community says, "If you are paranoid in storage, go to IBM.”
On the green computing front, IBM recognizes that green computing concerns are not likely to cause dramatic changes in product purchasing plans in 4Q07 but nonetheless aggressively promotes the idea that green computing delivers benefits that go beyond social consciousness to deliver significant operational savings. This is again a strong systems and infrastructure play that affects every aspect of computing, including facilities, personnel, and ancillary support technologies as well as products. Near term IBM can demonstrate tooling and expertise to help customers move forward on green energy initiatives that are likely to lead to implementation decisions in 2008-'09.
Finally we were encouraged by IBM's moves in the SMB space starting with their demonstration of the BladeCenter S(imple) product that clearly has been designed, packaged and implemented with the needs of SMBs (although not the absolutely smallest businesses) in mind. Most importantly, IBM seems committed to reengineering its overall business processes to streamline the complexity that SMBs face as they work with myriad integrators, application providers and IBM business partners, to gain access to IBM technology. We anticipate that many of IBM's efforts to design simplicity into products and go-to-market practices will eventually move up into the enterprise market, changing how enterprise computing is envisioned, marketed, purchased, implemented, and managed.
Action Item: IBM is emerging as a leader in storage where leadership is more than just market share but is characterized by a willingness to put forward an overall vision that can and usually is fulfilled. We expect that in the areas of virtualization and small business, customers have multiple opportunities to push IBM hard to gain access to important technologies under excellent terms and conditions. We also expect that in 4Q07 users will begin to use IBM products and expertise to initiate plans to improve overall energy efficiency, thereby saving significant operational expenses.