IBM: Address Market Disruptions Before It's Too Late

New ways to take advantage of today's deluge of data and the migration of businesses to the cloud and toward social engagement will be a major market disruption that both IBM and its channel partners need to address immediately.

That's the message from Tami Duncan, IBM's vice president of global business partners for North America, who told solution provider attendees of this week's XChange Solution Provider conference that they need to get ahead of the coming disruptions.

"They're changing everything about how we react to the world. ... Any one of these on their own would be a disruption to business, but they're happening together," Duncan said.

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Because of the speed at which such disruptions are happening, it is important for solution providers to move quickly to provide solutions, Duncan said. "If you get there after the transition, there's no profit for you," she said.

Duncan said that 80 percent of data created today is unstructured, and that IBM has invested $20 billion, including spending $13 billion on acquisitions and hiring about 10,000 consultants and more than 400 data scientists, to help derive value from it.

"We believe this will become the biggest competitive advantage," she said.

Finding the value in data is complicated because of the different layers of data available, Duncan said.

For example, she said, a GPS device interfaces with data at three levels. The first is descriptive analytics, which is having the data ready to build a map. The second is predictive analytics, which looks at where the driver is and tells him or her in advance where to turn. The third is prescriptive analytics, which she said looks at things such as upcoming accidents to provide alternate routes.

The next wave in getting value from data is cognitive supercomputing to take on real-world problems, which IBM has done with Watson, Duncan said.

Watson, which first burst on the scene by beating two all-time champions of the "Jeopardy" game show, already is tackling problems such as oncology, where consultants can feed information about cancer cases to the computer and within 15 minutes get suggested treatments along with ideas for further tests, she said.

Other examples include the ability to handle customer calls for financial institutions or act as a salesperson in retail companies, she said.

IBM in January unveiled a $1 billion investment in creating a new business group around Watson along with about 1,500 partners working to develop solutions, and at last month's Mobile World Congress unveiled a Watson mobile development business, she said.

NEXT: Cloud, Social Engagement, Security And Channel Opportunities

Liam Holmes, CEO of MIS Solutions, a Suwanee, Ga.-based solution provider and IBM partner, said IBM's move into cognitive supercomputing is an exciting one, but one around which IBM has yet to really define a business model.

"It holds promise," Holmes said. "But IBM hasn't defined how to make money, how to extend it to the business intelligence space, how to get recurring revenue. We haven't seen how IBM will position partners yet. But it will be a great opportunity for us."

IBM also has invested heavily in developing cloud technologies, particularly with its acquisition of SoftLayer, and expects to have 40 data centers worldwide supporting SoftLayer by the end of 2014, Duncan said.

The success of that investment will rely heavily on partners. "We can't get to all the clients," she told solution providers. "But you can."

IBM's cloud business has three pillars for solution providers, Duncan said. These include Think It for designing a cloud strategy, Build It for building public or private clouds, and Tap Into It for using Infrastructure-as-a-Service and new software layers to get value from the cloud. For instance, she cited IBM's recent acquisition of Cloudant as a way for partners to offer Database-as-a-Service.

The IBM cloud strategy is based on the IBM PureSystems converged infrastructure, on top of which are built services including SoftLayer and SmartCloud, Duncan said. The company last week also expanded BlueMix, a new platform that provides the connectors needed to bring disparate cloud systems together using open standards, she said.

On the social engagement side, security has become a huge concern as customers are all too willing to give up private data for what Duncan called "too many" benefits.

"The line between cool and creepy is blurring," she said.

Security issues are a major concern at IBM, which has made several acquisitions to help customers fight back against increasingly sophisticated cybercriminals, she said.

Going forward, IBM will continue to support partners with infrastructure technology including mainframes, Power-based systems and flash-based storage, Duncan said. "You may be looking at Infrastructure-as-a-Service," she said. "But customers are looking at both IaaS and on-premise, and both are still profitable."

Duncan also addressed the question of IBM's pending sale of its x86 server business to Lenovo.

"We haven't closed this yet. ... [and] we believe partner opportunities will continue with Lenovo," she said.

Holmes said IBM's move to sell its x86 server business has been a long time coming as IBM moved to focus on integrated solutions such as PureSystems.

"IBM has done a fantastic job developing PureSystems to compete with solutions like VCE's vBlock," he said. "IBM has also seriously embraced Linux, although it's not certain how that might impact traditional Windows-based business."

PUBLISHED MARCH 5, 2014