1064RA Key Themes at IBM Impact – Cloud, Mobility, Expert Integrated Systems and BPM

What is Happening?  Like many mega-vendors, IBM is making serious investments in key trends and technologies driving the new Master IT architecture (Cloud / Mobile / Social / Analytics + Integration – see Research Alert 1054RA, published April 12, 2012), and the emergent Boundary-free Enterprise™. Several of these threads were on display and emphasized at the IBM Impact conference in Las Vegas, which Saugatuck participated in earlier this week – with a major focus around mobility, business integration and the importance of service architectures.

However, the biggest take away from the event for Saugatuck was a greater appreciation for what IBM is doing with its recently announced PureSystems family of integrated technology, and its potential to dramatically lower the costs of deploying, maintaining and managing new private Cloud workloads.

Why is it Happening?  IBM has long had an emphasis on integration, through its provider / technology acquisition strategy, its own offerings (including its IT services), and most recently its Cloud strategy. Impact, including the PureSystems rollout, really emphasized this and crystallized it for IBM partners and customers.

Throughout the Impact event, IBM emphasized a number of key areas where they have been investing and where they see significant market opportunities for integrative services and management, including Cloud, mobility, expert integrated systems and business process management. Most notable were the introduction of its new Mobile Foundation technology, which provides clients with a mobile platform for developing, integrating, securing and managing mobile applications. Leveraging its recent acquisition of Worklight, this looks like a promising platform for developing and deploying new mobile solutions.

IBM also made a number of important announcements related to its WebSphere business integration software portfolio. This included some new BPM capabilities, and some interesting new business integration capabilities via IBMs new WebSphere Cast Iron Live Web API Services – both of which help developers better develop, integrate, socialize and manage solutions.

While these are all important new capabilities from IBM, Saugatuck walked away from the event most impressed with a better understanding of its recently announced PureSystems initiative, and what they are now delivering with their new PureApplications System and its Virtual Pattern Kit. Essentially, IBM is providing an environment that allows customers and partners to create / automate / package up Cloud-driven solution capabilities into “patterns of expertise” that IBM claims helps substantially lower deployment costs and the ongoing maintenance of newly born Cloud workloads. IBM shared that on average, these complete ready-to-go pattern-driven systems reduce deployment labor costs by 47 percent, and ongoing maintenance / management costs by 73 percent.

Market Impact  While they are only now just getting started, with more than 100 downloadable “patterns,” the impact of what IBM and other infrastructure providers (and their ISV partners) are doing as it concerns pre-configuring systems and solution assets for the Cloud, could potentially have a very significant impact on ongoing IT staffing and operational costs in general.

The key is to recognize that most IT organizations spend an enormous amount of time and internal labor performing a wide range of systems integration / testing activities to make sure everything works as needed. In fact, during a 1-on-1 meeting at the event with Beth Smith, VP WebSphere, she estimated that more than fifty percent of large enterprise staffing is focused on these efforts. In a follow-up meeting with a CIO at a large hospital / medical chain (with a global footprint), he estimated sixty five percent of his staff works on these issues. With large enterprises rapidly moving not only to highly virtualized but highly pre-configured Cloud architectures, the amount of staffing required to deploy, maintain and manage ongoing infrastructures should dramatically shrink over time – in some shops by as much as 10-20 percent over the planning horizon.

Historically, the amount of ongoing spending focused on turning the lights on, and managing the existing infrastructure and applications portfolio, has consumed 70-80 percent of IT budgets (on average) for most mid-to-large size organizations – with a significant portion of this spending derived by people costs. While numerous strategies have been deployed to lower these costs, this figure has not changed much over the past 20+ years. While the shift to pre-configured systems will not change this overnight, each 5-10 percent improvement in operational efficiency related to the deployment and maintenance of new systems, as well as the migration of existing workloads to new private Clouds, could potentially have a significant positive impact to IT budgets. The implication of this shift is the potential to unleash significantly greater amounts of funding to drive new business and IT innovation.

The challenge for many organizations will be how best to retrain and repurpose staff, as today’s evolving (and highly pre-configured) IT architectures just won’t need as much internal people support related to the testing and systems integration of new infrastructure deployments.

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