IBM recently held an analyst briefing in Toronto, Canada for leading industry analysts covering the BI, Analytics and Big Data Market. I was fortunate to be the only analyst from emerging markets (Asia Pacific, Africa, Latin America) to attend the event (note IBM paid travel expenses). This is the first in a two part research note on capioIT perspectives from the meeting and ongoing insight into IBM Analytics).
Clearly the most important point about IBM’s investment in Analytics, BI and Big Data is that $17 billion of acquisitions have gone a long way to establishing the software and platform for the IBM GBS (Global Business Services) to create leadership in the marketplace.
For customers, partners and employees, IBM is a complicated organisation. From capioIT’s perspective for many customers, partners and employees, the transition from an independent Cognos to the role as a core part of IBM analytics offerings was difficult. Lessons appear to have been learnt with subsequent acquisitions that have increased their individual and collective speed to value.
According to capioIT estimates, revenue for the entire IBM Analytics business (from Information Management through to Predictive Analytics on a mobile platform, and related services and hardware) is approximately $15B. To put this into perspective this $15B revenue equates to:
- 5 times Salesforce.com Revenue
- 5 times SAS Institute Revenue
- 2 times Wipro Revenue
At the event IBM announced that they had rolled big data into the Analytics and BI group, creating a Big Data, Analytics and Business Intelligence group. In order to simplify, I will settle for Analytics as a group name for now.
One of the key aspects for IBM that appears to be working with the Analytics group is the cross brand integration. Hardware, software and services appear to be delivering stronger go-to-market and customer outcomes than the previous IBM attempts at cross offering or silo does due to this integration.
Furthermore capioIT notes the following aspects that are increasing the value of its investments and capability in the analytics space:
- Simplification of Customer Engagement
– Finally, IBM has listened and is establishing a single contract for mid-sized customers to cover hardware and software investments. This is a long overdue initiative, and it is hoped that before too long it can apply to services.
– Reduction of Cognos contractual user types from 20+ to just 2. Again, this long overdue simplification will make life easier for all and improve licensing compliance.
- Each of the $17B of acquisitions appears to have a role to play. No “for the sake of it” investment. Whilst this may seem obvious, as a few mega vendors have reinforced in recent years, a simple business value for acquisitions is not a guaranteed outcome. This benefit for IBM is highlighted when solutions and outcomes are showcased. The value of each individual acquisition, integrated across the portfolio is clear.
- Successful academic partnerships with Universities have been designed to support resolution of long term skill supply and capability issues. Examples include:
– Columbus, OH – IBM Client Center for Advanced Analytics
– Deakin Uni, Melbourne, Australia – Centre for Excellence in Business Analytics
– Nanyang Polytechnic, Singapore – Business Analytics Innovation Centre
- Input of IBM Research and Labs is quickly filtering through to customer outcomes. From an overall IBM perspective, IBM Labs are a clear differentiation point. This is increasingly true for Analytics. Further investments by IBM in Big Data and business applications of analytics have the potential to drive a significant part of industry thought leadership.
- Watson starts to drive benefits down to the enterprise. Clearly, there is a lot that can be written about Watson, the natural language behemoth has come a long way since winning Jeopardy in 2011. Whilst initial commercial applications have focused on health, specifically Oncology, IBM recently announced key applications to business. Whilst it is not without challenges, expect more detail from IBM as to how the investment is driving business outcomes.
Part 2 (published later on the 26th June) will look at some of the challenges for IBM in the Analytics (and Big Data, BI space).
If you require further information, please contact Phil Hassey, Founder capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology in emerging markets. Phil may be contacted by email below,