Addressing The IT Labor Challenge

Back in April, I blogged here about the new IBM PureSystems line of servers that have been in the works for some years and backed by $2 billion in investment by IBM.

Here we are a few short months later, and we’re seeing some substantial uptake of this new line, including in growth markets.

Just a few updates:

• Over 700 IBM Business Partners have now adopted IBM PureSystems, and 1,300 of those have completed training on the new lines
• 160+ solutions and “patterns” of expertise have been developed both by IBM and our partners across 20 industries
• New financing options now all for organizations to defer the first payment for IBM PureSystems for 30 days

Organizations around the world are increasingly looking for ways to reduce IT complexity and overcome the growing worldwide skills shortage. Today, approximately three-quarters of global employers cite a lack of experience, skills or knowledge as the primary reason for the difficulty filling IT positions.

Egads!

Because of this, organizations are searching for new ways of computing that don’t require the additional commitment of significant resources or employee training to set up and maintain.

And voila, IBM PureSystems.

PureSystems meets this demand by providing patterns of expertise –- a new technology model that builds on the experience of thousands of IBM clients and radically streamlines the set-up and management of hardware and software resources.

Global Clients Embrace IBM PureSystems  

Since launching in April, clients around the world are using IBM PureSystems to reduce IT cost and complexity. For example:

• BPTP, a leading Indian real estate company, selected IBM PureSystems to streamline its IT infrastructure to improve the overall home buying experience for its customers. Established in 2003, BPTP has experienced rapid growth over the last decade. Sustaining and building upon this growth required BPTP to find a better computing and storage solution. To meet these challenges, it selected IBM PureSystems for all of its processing and storage requirements.
• PCCW, a leading information technology outsourcing company based in Hong Kong, has selected IBM PureSystems as the foundation for its new Enterprise Solutions Superstore — an online environment for Independent Software Vendors (ISVs). As a result, they are now able to offer customers applications on the cloud using a Software-as-a-Service model.
• ValeCard, a multi-industry conglomerate based in Brazil, has achieved 40 percent growth annually over the past three-years. Facing rapid expansion of its business, ValeCard turned to IBM PureSystems to manage thousands of transaction records from contracts with large companies and government entities. Additionally, ValeCard is using IBM PureSystems to help it meet an increasing set of new regulations and standards for data availability.

IBM’s Partners Drive PureSystems Adoption 

For IBM Business Partners, PureSystems creates a new opportunity to help clients solve the complexity of enterprise IT.

From resellers to distributors and Independent Software Vendors (ISVs), more than 700 Business Partners are supporting IBM PureSystems.

PureSystems currently run tens of thousands of existing ISV applications across four operating environments including Windows, Linux, AIX, and IBM System i.

Additionally, Business Partners have created more than 160 new solutions and applications that are optimized to run on PureSystems. These patterns of expertise, which span 20 industries, can be accessed through the IBM PureSystems Centre.

They include leading solutions from some of the world’s largest ISVs, including ERP systems and applications for the banking, marketing, healthcare and energy industries.

Numerous partners are also installing PureSystems in their own datacenters. For example Computer Gross, a managed service provider in Italy, and OneTree Solutions, an ISV from Luxembourg are both using the cloud capabilities of IBM PureSystems as a way to more easily meet the needs of their customers.

PureSystems Training, Certification, & Validation

To help address the new opportunity that PureSystems presents, IBM is also providing training, marketing, certifications and technical validation support to business partners.

For instance, dozens of IBM Innovation Centers in cities such as Bangalore, Dublin, Johannesburg and Shanghai are helping Business Partners develop and test their applications using IBM PureSystems. Business Partners can also bring their clients to IBM Innovation Centers to see PureSystems technology at work.

In addition, more 1,300 business partners — ISVs, managed service providers, resellers, system integrators and distributors — have been showing their support and interest in PureSystems by attending Business Partner Day and training events in 27 cities around the world.

PureSystems cloud capabilities are also drawing interest, with 500 developers using the PureSystems Cloud Trial to create applications through IBM’s SmartCloud that are ready to run on IBM’s new expert integrated systems.

IBM Financing For PureSystems

To help credit-qualified clients easily acquire IBM PureSystems, IBM Global Financing is making available a range of financing options.

As a result, clients will be able to avoid paying cash up-front, while lowering their total cost of ownership.

This is the first time that clients can lease the entire value of the system, including hardware and software.

Credit-qualified clients that elect financing can see immediate benefits with PureSystems while deferring their first payment for 90 days. Additionally, IBM Global Asset Recovery Services can buy back servers, including those made by HP and Oracle, for clients migrating to IBM PureSystems.

There are two models of the PureSystems family available — PureFlex System and PureApplication System.

PureFlex System enables organizations to more efficiently create and manage an infrastructure, while PureApplication System allows organizations to quickly deploy and reduce the cost and complexity of managing applications.

Both have already shipped to leading clients in 5 continents.

You can learn more about IBM PureSystems in the Expert Integrated Systems blog here.

Live @ IBM Smarter Commerce Global Summit Madrid: Steve Cowley On The Smarter Commerce Opportunity

IBM vice president Steve Cowley sits down with Scott and Todd at the IBM Smarter Commerce Global Summit in Madrid for a Q&A on all things Smarter Commerce, among other topics.

IBM vice president of worldwide sales, IBM Industry Solutions group, Steve Cowley, has worn a number of leadership hats at IBM, but most recently, he’s been busy helping make over the IBM Smarter Commerce play and help his global team take the Smarter Commerce solutions to market.

In his role, Steve is responsible for acquiring, growing and selling a portfolio of industry specific solutions to meet client’s needs in todays’ rapidly changing marketplace.  If you push him, he’ll also explain that he has a passion for Formula One racing

Previously, Steve was General Manager for IBM Central & Eastern Europe, Middle East and Africa, based in Dubai, where he was responsible for driving sales and helping clients to maximize their IT investments across the region.

Responsible for all of IBM’s business with some one hundred countries from the Czech Republic to Russia, all Africa and the Middle East, the CEEMEA region was at the heart of IBM’s Growth Markets strategy.

Scott and I queried Steve about a number of topics, including the evolution of the Smarter Commerce opportunity, what’s going on IBM’s growth markets, and the need for increased focus on enterprise mobile computing.

AIMing For An Immense Market Opportunity

I made it to my first session at IBM Impact 2012 earlier this afternoon here at the Venetian Hotel and Casino in Viva Las Vegas.

The session was a stage setter for the rest of the event, and I just HAD to share what I learned with the rest of the world.

At IBM Impact 2012 today, IBM market advisor Rahul Sahni provided a comprehensive overview of the application and middleware (AIM) market. Here, Sahni highlighted a few key macro-economic factors that are affecting the IT market.

Rahul Sahni, a market development advisor with IBM’s AIM and ICS organizations, shared a market view for the Application and Middleware Infrastructure market, which we know is changing underneath our feet.

Rahul’s presentation was excellent, hitting the highlights of both what is shaping the market, and what’s driving some substantial changes in it.

The Economic Shakeout

He set up his presentation with some macroeconomic data: Japan still coming out of recession, Europe still a wildcard with obvious volatility in the south, the US/Canada holding steady in the 3-4% GDP growth range, and the BRIC’s coming in for a gentle landing, some more softly than others.

There are some potential threats to business growth: In the developing markets, the currency devaluations.  In the mature markets, the sovereign debt crises.  And yet despite all this volatility, the storage and software infrastructure markets remain strong.

Mr. or Mrs. CIO, Can You Spare A Project?

Why?  CIO plans require strong IT infrastructures. If you look at where IT execs are spending, the sweet spots include AIM middleware, where often one or several IT projects will include parts of the AIM middleware portfolio.

Becoming Agile For The Upturn

Of those, projects required Agile/OOD systems, process simplification, industry and/or government compliance, cost reduction mandates, the amount and availability of data, and finally, workforce mobility and productivity are the top six drivers. Ergo, the AIM market is expected to grow some 6% in 2012, and will grow to an estimated $1 billion opportunity in 2013.

Economic conditions are such that key projects have resulted in more demand for small IT initiatives with short term ROI and a need for greater productivity and efficiencies.  Pie-in-the-sky projects with long-term prospects for growth have been mostly sidelined.  Show me the money, and show it to me soon (meaning, the value that will be returned against the project).

The AIM Market Is Growing…and Changing

Of the three AIM market segments, there’s Application Infrastructure (growing at 8%), Business Process Managment (11%), and Connectivity and Integration (2%).  In the first, key growth drivers are the enterprise need to provide transparency, reduce costs, and stay competitive.

For BPM, cloud adoption is now a key driver in BPM as smaller and medium-sized businesses’ processes become more complex and as BPM cloud solutions become more price-aggressive.

For Connectivity and Integration, on-premise integration can now be matched by cloud services in functionality and also aggressive pricing.

So, writ large, the AIM market is growing today because its products can help simplify IT complexity, and help organizations better understand, improve, and make more transparent their business processes.

Organizations also need to make the best use of what they already have in the way of IT investments, and AIM products provide the ability to integrate existing applications, infrastructure, and processes with new development initiatives.  This becomes especially critical as we see continued activity in mergers, acquisitions, and divestitures.  All to applications, infrastructures and processes have to be integrated somehow.

This Is Not Your Father’s Application And Integration Market

So what about some of these new arenas?  Mobile platforms will most definitely continue to grow and evolve, with market data suggesting that enterprise investment in mobile application development will increase at the rate of 20-30 percent per annum in order to meet the rising demand for customer applications.

Customer facing industries rank highest with need to develop mobile enterprises, with virtual guns being held to their heads as they compete for customer-centricity in a growing but younger customer base.

Application Convergence Will Rule The IT World

Also noteworthy, over the next few years, the lines between the Web, hybrid and native apps will blur and mobile enterprise application platforms (MEAPs), portals, other web development approaches will converge into a new generation multichannel application development tool. Those organizations unprepared for this transition may soon find themselves on Application Island with no place to row back to.

Become Your Cloud: The Great Mobile Gold Landrush of 2012

It goes without saying that the cloud is inherently critical to this new environment.  Cloud based development is lowering the cost of adoption and increasing the speed with which companies can roll out mobile solutions, and a significant portion of the IT opportunity associated with mobile enterprise initiatives will come not from the purchase of devices and network services — the bright and shiny objects that all your friends and family get so googly-eyed about — but from the associated software, consulting, system integration and security services.

The Future’s So Bright…

I’ll call it “the Great Mobile Gold Rush of 2012” — remember, we’re laying the tracks for a new foundation of computing. The excitement may be in the devices, but a little sleight of hand reveals the ridiculously gargantuan opportunity in the virtual picks and shovels required to make it all work.

To which point Rahul began to close his session, reassuring the business partners in attendance and beyond that this is a market IBM is committed to.  WebSphere still makes up a substantial share of IBM Software revenues, and IBM’s 2015 roadmap reveals that 50% of segment profit is expected to come from IBM Software. (And no, we’re not feeling any pressure over here or anything!)

IBM’s four key growth initiatives against that 2015 roadmap reveal two obvious intersects with the AIM market, our growth markets, where much of the middleware layer is being laid for those future railroad tracks, and cloud computing, to which IBM has made massive investments in growth, organic and acquisition, over the past several years.

Throw in a little business analytics technology to help you understand your AIM infrastructure performance, and there’s plenty of upside in the AIM.

My takeaway: The AIM future’s so bright you gotta wear some of those Google augmented reality glasses, but if you can’t see your way through evolving with the convergence of the mobile enterprise and the cloud you’ll have few business processes left to worry about managing!

IBM 2Q10 Earnings Debrief: Up, Up, and Up

This afternoon IBM announced it’s 2Q10 earnings.  This is the thirtieth straight quarter of IBM earnings per share growth.

Following are some of the key headlines:

• Diluted earnings per share of $2.61, up 13 percent
• 30 consecutive quarters of EPS growth, 12 of last 14 at double digits
• Full-year 2010 EPS expectations raised to at least $11.25
• Net income of $3.4 billion, up 9 percent
• Pre-tax income of $4.6 billion, up 7 percent;
• Pre-tax margin of 19.3 percent, up 1 point
• Revenue of $23.7 billion, up 2 percent, as reported and adjusting for currency
• Growth markets revenue up 14 percent; first-half revenue as large as total Euro zone revenue; BRIC countries revenue up 22 percent
• Business Analytics revenue up 14 percent
• Software revenue up 2 percent, 6 percent excluding divested PLM operations
• Systems and Technology revenue up 3 percent
• Services revenue up 2 percent
• Services backlog of $129 billion, up $1 billion, adjusting for currency.

IBM had a second-quarter 2010 diluted earnings of $2.61 per share compared with diluted earnings of $2.32 per share in the second quarter of 2009, an increase of 13 percent.

Second-quarter net income was $3.4 billion compared with $3.1 billion in the second quarter of 2009, an increase of 9 percent.

Total revenues for the second quarter of 2010 of $23.7 billion increased 2 percent (2 percent, adjusting for currency) from the second quarter of 2009.

The impact of changes in currency rates since IBM’s first-quarter earnings report in April reduced revenue by approximately $500 million in the second quarter.

“In the second quarter we again delivered double-digit earnings-per-share growth, increased margins, as well as improving constant-currency revenue performance in our ongoing software, services and hardware businesses, and in all geographies,” said Samuel J. Palmisano, IBM chairman, president and chief executive officer.

“With the benefit of our strategic growth investments, our mix of higher-value business and the introduction of new System z and Power Systems, we are confident of our ability in the second half of the year to continue our strong business performance, grow profit and drive shareholder returns. As a result, we expect full-year 2010 diluted earnings per share of at least $11.25.”