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 Continues Middleware Leadership (And Tiger’s Master’s Opening Round Tee Time)

It’s Tuesday of Master’s week.  I caught a couple of the interviews from the media room today.  Tiger was looking very confident, but so were Phil and Rory.

I’m really digging Golf Central’s “Live from the Masters” coverage, and looking forward even more to seeing a new feature from AT&T U-Verse this year, whereby they will be following “featured” groups of golfers on individual dedicated channels.

Guess who I hope to follow?  Tiger, of course, who’s paired up with Spain’s Miguel Angel Jimenez (“The most interesting man in the world…!”) and Sang-Moon Bae, South Korea’s 25 year-old golfing wunderkind, 10:35 EST on Thursday.  Hmm, do I have any conference calls then??

Yesteday, some good news from Gartner.  They announced that based on their definition of middleware IBM has once again been named the overall marketshare leader in middleware software.

The rankings are based on total worldwide revenue for 2011 and mark the eleventh consecutive year of leadership for IBM.

According to the report, IBM was the leading software vendor with 32.1 percent market share, extending its lead to nearly double that of its closest competitor.

According to Gartner, IBM grew 12.4 percent in 2011, faster than the overall market. The worldwide application infrastructure and middleware software market grew 9.9 percent to $19.4 billion, according to Gartner.

Besides its overall lead, according to the Gartner report, IBM holds the number one market share position in key sub-markets growing faster then the overall IT market.

For example, the Business Process Management Suite (BPMS) segment grew at 11.2 percent in 2011, Gartner said. IBM was named the number one vendor in BPMS software with a 27.1 percent share; almost triple that of its closest competitor. BPMS software enables companies to develop and implement processes that help their businesses be more agile and grow.

Gartner reported that IBM continues to be number one in other growing and key areas including the Enterprise Service Bus Suites, Message Oriented Middleware Market, the Transaction Processing Monitor market and Integration Appliances.

Gartner also reported double digit growth by IBM for the Portal Products and User Interaction segment IBM’s continued market share leadership in middleware has been a key reason for the company’s strong growth.

Coming back to the Master’s, I’ll hope to add some more color before fleeing for the wilds of West Texas on Friday for my annual “gun camp” trip with some good friends.