IBM recently held an analyst briefing in Toronto, Canada for leading industry analysts covering the BI, Analytics and Big Data Market. Part 1 of the capioIT review of the event is here – http://wp.me/p15cZf-88. It focused on the positive side of how $17B in spend is driving significant growth for IBM in the end to end platform space. In part 2 capioIT will look at some of the challenges that exist for IBM, and by extension, for partners of IBM, in the analytics solutions space.
Overall IBM is using initiatives like Big Data and Analytics as well as Smarter Commerce to drive the “agenda” (and their perception, brand and engagement) from technology to “the business”. Overall it is a long way from a metric that could be interpreted as broadly successful in this agenda point. It is worth noting that it is not alone in this transition. Focus on the integration of the CMO and CIO is a good start, and can go a long way to align two business units that suffer from a lack of engagement.
As noted, Big Data has been linked to Analytics by IBM. Big Data is of course the buzzword of the moment. IBM is not a vendor to steer away from hype, and Big Data is no exception. IBM has a real opportunity to be involved in driving standards around Big Data. It has not done this as yet, success will drive substance beyond the hype. As an aside, the one hour of training that all GBS consultants are required to take on Big Data does not fill me with hope that it is much more than hype, but the investments in skilling through 2013 and 2014 may offer more concrete insight into how IBM can execute on Big Data.
Business partners are also winners and losers in the $17B investment by IBM. Smaller partners have been significantly disrupted by the changing dynamics of their relationship with IBM. For example partners of smaller acquisitions have either picked up IBM as a provider or in the worst case lost access to their customer base as IBM consolidates the ISV and distribution networks.
The dynamics across the enterprise space particularly with SAP, Accenture and other Tier 1 IT services providers is critical to watch. SAP and IBM have had a strong and broad relationship across all aspects of each organisations business offerings and capabilities. In fact capioIT rated IBM as the second strongest SAP partner in the Asia Pacific region in the 2012 Capture Share report (see – http://wp.me/p15cZf-4S ). The acquisition path of IBM has slightly altered this dynamic. Product overlap has increased and the tension has increased proportionately. Whilst it is still manageable it is a great example of the increased stress on Coopetition across the largest IT providers (see IBM-Cisco, Dell-Cisco, Microsoft-OEM’s for more examples).
The tier 1 services providers (especially Accenture given it is the largest IBM Software Group SI, aside from IBM) is a critical dynamic to watch. Divided loyalties have always existed between IBM software and IBM services from a partnering point of view, but capioIT believes the partnering angle has been forever altered by the treatment of IP, and the push for IBM to integrate and de-silo offerings. capioIT believes that IP and assets for IBM Analytics software will ultimately reside with the GBS group. It has to be emphasised the extent to which this outcome will alter the dynamic and push services revenue towards IBM and away from partners such as Accenture and Deloitte.
One area from a product delivery point of view that the overall IBM BDA offering has been slow is in the delivery of cloud solutions for their suite of products. I had expected more insight into this, and did not get it. The overall cloud capability and investment of IBM is somewhat lacking so capioIT’s surprise should be minimised, nonetheless IBM must accelerate investment in cloud based options (alongside on-premise) to maximise customer outcomes.
Product wise, whilst the $17B investment has provided IBM with a comprehensive offering capability, there is still some gaps particularly at the end user tool set aspect of the market. The democratisation of BI is not going away. If IBM were to add to the $17B investment, we expect that the focus must be on the mobility and data visualisation offerings available in the market. There are plenty of options out there for IBM if it was to do an acquisition in the space, albeit with many trading at healthy earnings premiums.
Bottom line – IBM has made a smart $17B investment in Big Data and Analytics. Not all of it is perfect and it still a distance away from attaining this, but it has created a formidable capability. Some of the conflicts (especially with partners) will remain and as with any solution the real proof of success will be ongoing and consistent customer execution.
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,