Category Archives: IBM

AWS, Google, hybrid cloud, IBM, Microsoft, News & Analysis

AWS, Google, Microsoft and IBM pull away from pack in race for cloud market share

racing horses starting a raceNew findings from Synergy Research highlight the cloud market is still dominated by AWS, Google, Microsoft and IBM, as the pack is seemingly struggling to gain ground in the race for market share.

AWS still leads the way in the segment, accounting for roughly 31% of the global market share, with IBM, Google and IBM collectively accounting for the next 22%. The next 20 players in the market, companies such as HPE, VMWare and Alibaba for example, account for a collective 27%. AWS year-on-year growth was estimated at 57% while Google and Microsoft both demonstrated more than 100% growth over the same period.

“This is a market that is so big and is growing so rapidly that companies can be growing by 10-30% per year and might feel good about themselves and yet they’d still be losing market share,” said John Dinsdale, Chief Analyst at Synergy Research Group. “The big question for them is whether or not they are building a sustainable and profitable business. This can be done by focusing on specific regions or specific services, but the bulk of the market demands huge scale, a broad footprint, very deep pockets and a long-term corporate focus.”

Worryingly for the rest of the pack outside of the top four, the gap would appear to be growing as AWS, Google, Microsoft and IBM are pulling further ahead. The 20 companies outside the top four averaged year-on-year growth of approximately 41%, though Synergy claim the cloud segment grew more than 50% over the course of Q1.

The team estimate the quarterly cloud infrastructure service revenues, which include IaaS, PaaS and private & hybrid cloud, has now surpassed the $7 billion milestone, with the US accounting for roughly 50% of the worldwide market share.

 

Growth

data centre, Database, flash storage, IBM, News & Analysis

IBM expands flash storage portfolio in continued transition to cloud positioning

Cloud storageIBM has announced the expansion of its flash storage portfolio, to bolster its position in the cognitive computing and hybrid cloud market segments.

The FlashSystem arrays combine its FlashCore technology with scale-out architecture, in the company’s continued efforts to consolidate its position as a vendor to power cloud data centres which utilize cognitive computing technologies. Cognitive computing, and more specifically Watson, has seemingly formed the central pillar of IBM’s current marketing and PR campaigns, as it continues its journey to transform Big Blue into a major cloud player.

“The drastic increase in volume, velocity and variety of information is requiring businesses to rethink their approach to addressing storage needs, and they need a solution that is as fast as it is easy, if they want to be ready for the Cognitive Era,” said Greg Lotko, GM of IBM’s Storage and Software Defined Infrastructure business. “IBM’s flash portfolio enables businesses on their cognitive journey to derive greater value from more data in more varieties, whether on premises or in a hybrid cloud deployment.”

The company claims the new offering will provide an onramp for flash storage for IT service providers, reducing the cost of implementing an all-flash environment, as well as scalable storage for cloud service providers. Another feature built into the proposition, will enable customers to deal with ‘noisy neighbour’ challenges and other network performance issues which can be present in a multi-tenant cloud environment.

“The workloads our department manages include CAD files for land mapping, geographic information system (GIS) applications and satellite imagery for the over 9.2 million acres of State Trust lands we’re responsible to oversee. The data we manage is tied directly to our goal to make this information available and to increase its analytical capabilities,” said William Reed, CTO at the Arizona State Land Department, one of IBM’s customers. “After exhaustive, comparative proof of concept testing we chose IBM’s FlashSystem, which has helped to increase our client productivity by 7 times while reducing our virtual machine boot times by over 85 percent.”

cognitive computing, Financial Results, Financials, IBM, News & Analysis

IBM reports cloud growth amid 16th quarterly revenue decline

IBMIBM has reported healthy growth for its cloud and strategic imperatives business units, despite witnessing revenue declines for the 16th straight quarter.

The strategic imperatives units, which include the cloud, analytics, mobile, social and security services, delivered $29.8 billion in revenue over the last 12 months, accounting for 37% of total revenues, with cloud accounting for $10.8 billion.

“We delivered $18.7 billion in revenue, $2.3 billion in net income and operating earnings per share of $2.35,” said Martin Schroeter, CFO at IBM. “Importantly, we also made significant investments and took significant actions to accelerate our transformation and move our business into new areas.”

Specifically in Q1, total revenues for the group dropped by 5% to $18.7 billion, the strategic imperatives unit grew 14% to $7 billion, with cloud accounting for $2.6 billion, a 34% year-on-year increase. The company also announced or closed ten acquisitions during the quarter, investing just over $2.5 billion in new businesses including Bluewolf, a Salesforce partner, Truven, a provider of cloud-based healthcare data and The Weather Company’s digital assets.

While the company built its reputation in the traditional IT market segment, sliding revenues and enterprise attention to cloud solutions has enforced a transformation play for the tech giant, which would appear to paying off well.

“We’re continuing to expand our Watson ecosystem and reach,” said Schroeter. “Over the last 12 months, the number of developers using Watson APIs is up over 300% and the number of enterprises we’ve engaged with has doubled. Watson solutions are being built, used, and deployed in more than 45 countries and across 20 different industries.”

Watson would appear to be one of the main focal points for IBM’s new cloud-orientated business model, as the cognitive computing platform has formed the basis of numerous PR campaigns throughout the year, highlighting client wins from pharmaceutical giant Pfizer and the McLaren Honda Formula One team.

“Our enterprise clients are looking to get greater value from their data and IT environment,” said Schroeter. “They’re not just focused on reducing cost and driving efficiency but using data to improve decision-making and outcomes. They’re looking to become digital enterprises that are differentiated by Cognitive. We’re creating Cognitive Solutions that marry digital business with digital intelligence. We’re bringing our industry expertise together with these cognitive solutions and we’re building it all on cloud platforms”

Geographically, the company highlighted business was relatively consistent worldwide, though the Asia-Pacific region did demonstrate growth. EMEA and North America demonstrated slight declines, though there have been improvements from previous quarters, though Latin America continued to prove tough for IBM. The company does have a large business unit in the region, though it quoted volatile economic and political environments in Brazil, as reasoning for declines.

Although the company has not halted the revenue declines which have been a constant for IBM in recent years, the strategic imperatives units would appear to be taking a stronger role in fortunes of the business. IBM has grown its capabilities in numerous developing markers in recent months, including cloud video platforms and user experience, though it does appear to be backing cognitive computing for future growth.

“As we build new businesses in areas like Watson Health and Watson Internet of Things, this requires different skills and to be in different places,” said Schroeter. “I mentioned earlier that over the last year we’ve added over 6000 resources in Watson Health and added over 1000 security experts. These are specialized skills in highly competitive areas. So this is not about reducing our capacity; this is about transforming our workforce.

“So where are we in the transformation? It is continued focus on shifting our investments into those strategic imperatives, it is making sure that the space we’re moving to is higher margin and higher profit opportunity for us and then making sure we’re investing aggressively to keep those businesses growing.”

While IBM is not out of the woods yet, the recent quarterlies did beat analyst predictions and its acquisition activities would appear to be more aggressive than others in the space. The company is seemingly not wasting any time in positioning itself firmly in the cloud space, though it does appear executives are backing the growth of cognitive computing, and Watson’s market penetration in particular, as the catalyst for future success of Big Blue.

Digital Video, IBM, News & Analysis, TV

IBM announces four new clients for video business unit

Curved video wallIBM has revealed four new client wins for its video business, IBM Cloud Video, a couple of hours ahead of its quarterly earnings announcement.

Speaking at NAB Show, the company announced Comic-Con HQ, Canadian Broadcasting Corporation, AOL and Broadway Video will now all be utilizing the IBM video platform. The company expects the market to exceed $100 billion in the next three years, as well as digital video to account for 80% of all internet traffic by 2019.

“IBM is at the forefront of the industry at a time when video is the driving influence in how organizations communicate, share information, and entertain,” said Braxton Jarratt, General Manager of the IBM Cloud Video business unit. “Today’s announcements will be viewed as a significant milestone in the company’s cloud video strategy, as IBM makes the sharing, distribution, and management of video increasingly simple across any device.”

IBM announced the acquisition of Ustream in January though financials of the agreement were not disclosed. Ustream created a cloud model to support live and on-demand video streams and claimed to have 80 million viewers per month from customers including NASA, Samsung, Facebook, Nike and The Discovery Channel. The IBM Cloud Video business unit was formed by the combination of IBM’s R&D dollars alongside acquisitions of Clearleap, Ustream, Aspera and Cleversafe.

The deal with Comic-Con HQ will offer numerous services including subscriber and content management, billing, and video compatibility on multiple devices. The Canadian Broadcasting Corporation will be using IBM’s tech to support its next-generation, ad-supported streaming video service. AOL will be using transfer and automation software from Aspera (an IBM company) to power its media management platform.

The news comes ahead of the company’s quarterly earnings, in which analysts expect IBM to announce further revenue declines. The company has reported revenue declines for 15 straight quarters, though these trends have been witnessed by several tech giants who have been primarily associated with now-legacy IT, not only IBM. The move into cloud computing is seemingly one of a number of strategies set in place for IBM to counter negative growth, and carve a new niche in the digital ecosystem.

Big Data, cognitive computing, IBM, News & Analysis

Are decision makers thinking too short-term for cloud benefits?

Career ChoicesWhile cloud adoption maybe hitting the mainstream, the majority of projects are focused primarily around increasing productivity of employees through automation as opposed to the greater benefits of cloud computing.

Speaking at Cloud World Expo, Rashik Parmar, IBM’s Lead Cloud Advisor, highlighted that the benefits of cloud maybe currently underplayed by some organizations, as projects are initially too focused on productivity advantages. While automation could build an effective business case for cloud implementation, benefits such as performance and business predictability are often overlooked until projects are more mature.

“With performance we talk about speed. It’s the timing in which it takes to change, drive innovation in the market place and accelerate the way you deliver value to you customers,” said Parmar. “Predictability is one we often don’t think about. With the cloud you start to be able to understand the kind of outcomes you can achieve well before you put them out there. It’s that ability to be able to predict those outcomes and be confident that this particular journey is going to deliver value that gives people the inspiration and the ability to invest in cloud projects.”

Parmar highlighted that cloud is more than simply a tool for automation of software, but also the access to data, which has been healthily increased by the wider adoption of IoT technologies. Advances in cognitive computing are now enabling businesses to drive decision making through automation, taking time consuming tasks away from employees to ensure they can concentrate on core tasks.

“What we’re now starting to get into is a stage of machine learning, a stage of cognitive computing which allows us to see some of the broader patterns and automate further,” said Parmar. “Tasks which were being handed to humans are being replaced by automation. Radiography is a good example. A radiographer looks at an x-ray and decides whether there is a crack or a hairline fracture, and these are quite hard to automate without human skills. With the new cognitive capabilities and picture recognition analytics, we can use machine learning to pick out these anomalies and automate these tasks.”

While the initial benefits of cloud will always be automation and therefore and increase in productivity, as organizations mature through their cloud journey’s the long-term potential of cloud becomes more apparent.

IBM’s position would appear to be on the advanced side of cloud computing, seemingly wanted to accelerate customers through the adoption process and through to the performance and predictability benefits sooner rather than later. Though this does leave the question of how many organizations would be in a position digitally to capitalize on such concepts currently. Can organizations be fast-tracked to the advanced stages of cloud computing or does there have to be an internal learning curve? Could this be a case of IBM trying to encourage customers to walk before they can crawl?

cloud security, IBM, News & Analysis

IBM Security targets incident response marketplace with Resilient acquisition

security monitoring roomIBM Security has completed the acquisition of Resilient, as part of the company’s expansion in the incident response marketplace. Financial terms of the agreement have not been released.

The company had announced its plans to acquire Resilient in February, alongside the launch of its X-Force Incident Response Services. Resilient’s incident response system allows customers to automate and orchestrate the many processes needed when dealing with cyber incidents. The new services include a remote incident response capability to help clients map how a breach occurred and take action to shut it down.

“The combination of Resilient’s people – top thought leaders in the incident response marketplace – and their technology is a differentiating addition to our security business,” said Marc van Zadelhoff, General Manager at IBM Security. “Our investments in threat detection and prevention have helped us move into a leadership position in the security market. With Resilient, we’re expanding the capabilities we bring to customers, helping them manage the complexities in resolving security incidents, including the coordination of teams, best practices, and reporting.”

The company have claimed by combining Resilient Systems’ Incident Response Platform with IBM’s QRadar Security Intelligence Incident Forensics, BigFix, X-Force Exchange and other Incident Response Services, it will be able to offer increased speed in dealing with threats.

IBM has been quietly building its security business over recent years through various acquisitions and company hires. In the last three years, the company has bought a number of security specific vendors including CrossIdeas, Lighthouse Security Group and Trusteer, the latter was rumoured to be around the $1 billion mark. The company now claims to be the largest cloud and cyber security vendor in the market, exceeding $2 billion in revenue and hiring more than 1000 security professionals in 2015, as well as holding than 3,000 security patents.

“The Resilient team is delighted to be joining IBM Security,” said John Bruce, Resilient’s CEO, “Together, we will be a powerful force helping organizations to manage the evolving security challenges that they face. With the scale of IBM research, development and investment behind us, we’re excited about the possibilities for innovation and to engage with new clients around the world.”

Customer experience, Digital Marketing, Enterprise IT, IBM, News & Analysis

IBM acquires Salesforce consulting partner

IBMIBM has announced plans to acquire Salesforce specialist consulting business Bluewolf, which will bolster the Global Business Services Interactive Experience (iX) department.

IBM iX, marketed as a next-generation hybrid consultancy and digital agency, has been bolstering its ranks in recent months, as the Bluewolf deal is set to be the fourth since the turn of the year. In January the business bought US ad agency Resource/Ammirati, February saw the purchase of Berlin-based digital agency Aperto and earlier this month the acquisition of ecx.io, another digital marketing agency, was announced. While previous deals have taken IBM iX down the route of digital marketing and advertising, the Bluewolf deal takes the department back down more traditional IBM routes.

While it has not been announced when the deal will be completed, IBM hopes the deal will provide an edge in the market for medium-sized businesses and enterprise scale organizations. Bluewolf, which specializes in helping companies integrate Salesforce’s CRM services into their IT systems, is believed to be one of Salesforce’s oldest consulting partners, claiming to have delivered more than 9,500 successful worldwide.

“I’m so proud of Eric (Eric Berridge, Bluewolf CEO), who built Bluewolf from a start-up into a leader in Salesforce services,” said Marc Benioff, chairman and CEO, Salesforce. “The powerful combination of our strategic partners, IBM and Bluewolf, will help clients transform and demonstrate the growing client demand for our Customer Success Platform.”

IBM said the acquisition of Bluewolf would give the Global Business Services division deeper consulting capabilities, as it continues efforts to differentiate the brand in a crowded market place. “There is no question that the consumer-grade experience has emerged as a fundamental element in modern business strategy,” said Bridget van Kralingen, SVP at IBM Global Business Services. “Meeting that expectation defines next-generation differentiation and competitive position, and with Bluewolf, we add expertise to scale that capability to the cloud-based capabilities of Salesforce.”

The series of acquisitions seemingly build on the trends more demanding customers and evolving consumer expectations on the digital landscape. An IBM survey stated 81% of C-suite leaders anticipate more digital and virtual engagement by 2020 and 66% anticipate a stronger focus on customers as individuals. It would appear IBM is attempting to get a jump-start on competitors through strategic acquisition, as opposed to organic growth and transformation.

AI, Artificial intelligence, IBM, News & Analysis

IBM launches brain-inspired supercomputer with Lawrence Livermore National Laboratory

artificial intelligence, communication and futuristicIBM and Lawrence Livermore National Laboratory have launched a new project to build a brain-inspired supercomputing platform for deep learning inference.

The project will be built on IBM’s TrueNorth chip, which the company claims will process the equivalent of 16 million neurons and 4 billion synapses and consume the energy equivalent of a tablet computer. The neural network design of IBM’s Neuromorphic System aims to be able to infer complex cognitive tasks such as pattern recognition and integrated sensory processing in a much more economical manner than current chips.

“The delivery of this advanced computing platform represents a major milestone as we enter the next era of cognitive computing,” said Dharmendra Modha, Chief Scientist for Brain-inspired Computing at IBM Research.   “We value our relationships with the national labs. In fact, prior to design and fabrication, we simulated the IBM TrueNorth processor using LLNL’s Sequoia supercomputer. This collaboration will push the boundaries of brain-inspired computing to enable future systems that deliver unprecedented capability and throughput, while helping to minimize the capital, operating and programming costs – keeping our nation at the leading edge of science and technology.”

The technology itself will be utilized in a number of different manners within the National Nuclear Security Administration (NNSA), including the organizations Stockpile Stewardship Program, a program of reliability testing and maintenance of its nuclear weapons without the use of nuclear testing.

“Neuromorphic computing opens very exciting new possibilities and is consistent with what we see as the future of the high performance computing and simulation at the heart of our national security missions,” said Jim Brase, Livermore National Laboratory’s Deputy Associate Director for Data Science. “The potential capabilities neuromorphic computing represents and the machine intelligence that these will enable will change how we do science.”

While Artificial Intelligence has been one of the more prominent trends in the cloud computing world, the success of the technology and PR stunts launched has been varied.

AlphaGo is an example of the success of AI, as Google Deepmind’s AI program beat world Go champion Lee Se-dol in a five match series. As traditional machine learning techniques could not be applied in this instance, the team combined an advanced tree search with deep neural network allowing the program to readjust its behaviour through reinforcement learning. The win came as a surprise to commentators, as the game Go relies on intuition and feel.

On the opposite end of the spectrum, Microsoft has had to release an apology after its twitter inspired AI stunt backfired. The program tweeted controversial comments as it was unable to grasp the politically incorrect nature of the messages it received from users, as reported by the Independent.

AWS, Cisco, Enterprise IT, HPE, IBM, Microsoft, News & Analysis

HPE holds off Cisco for cloud infrastructure top spot

HPE street logoFindings from Synergy Research Group have HPE as the number one provider in the cloud infrastructure equipment market, narrowly outperforming Cisco over the course of 2015.

Total revenues for the cloud infrastructure equipment segment reached over $60 billion in 2015, with HPE accounting for just over 12%, and Cisco just under. Dell, Microsoft and IBM complete the top five, each controlling about 7% market share.

“There continues to be particularly impressive growth in the public cloud infrastructure market as AWS and other cloud operators are having tremendous success in attracting enterprises to their ever-expanding range of service offerings,” said Jeremy Duke, Synergy Research Group’s founder. “But enterprises too are buying ever-larger volumes of infrastructure to support their private or hybrid cloud deployments. Across the board there is a massive swing away from enterprises running workloads over more traditional and inflexible IT infrastructure.”

Synergy’s research showed between Q4 2014 and Q3 2015 total spend on infrastructure hardware and software to build cloud services exceeded $60 billion. Spend on private cloud accounted for more than 50% of these revenues, though public cloud is growing at a faster pace. HPE currently leads the private cloud space, with Cisco in second, however the roles are reversed for the public cloud segment.

While HPE and Cisco remain dominant in the server and networking segments, both companies have been releasing a number of new products in recent months to diversify their offering. Last week, HPE launched its ‘machine-learning-as-a-service’ on Microsoft Azure, which combines 60 API’s to provide machine learning capabilities. While HPE is seemingly capitalizing on the growing ‘as-a-service’ trend, Cisco is focused on its cloud-based collaboration service, Cisco Spark, which was launched with Verizon recently.

Market share graphMicrosoft features in the list due to its position in the server OS and virtualization applications market, where as Dell and IBM have demonstrated strong offerings in a broad number of cloud technology markets. Servers, OS, storage, networking and virtualization software combined accounted for 95% of the Q4 cloud infrastructure market.

While hardware and software to build cloud services revenues exceeded $60 billion, other areas of the industry demonstrated stronger growth. Public IaaS/PaaS services had the highest growth rate at 51%, followed by private & hybrid cloud infrastructure services at 45%.

“In many ways 2015 was the year when cloud became mainstream. Across a wide range of cloud applications and services we have seen that usage has now passed well beyond the early adopter phase and barriers to adoption continue to diminish,” said Duke. “Cloud technologies are now generating massive revenues and high growth rates that will continue long into the future, making this an exciting time for IT vendors and service providers that focus on cloud.”

CRM, Enterprise IT, IBM, News & Analysis, Public Sector

IBM acquires Optevia to strengthen position in public sector CRM market

cloud_IBM claims the acquisition of Optevia will improve its position as a SaaS and digital consultant in the lucrative market. Optevia has a track record of working with UK Emergency Services, Central Government, Local Government and Social Enterprises, including the Ministry of Justice’s National Taxing Team’s rollout of Dynamics CRM.

“By acquiring Optevia, IBM will be able to provide Public Sector clients and prospects with a range of unique, industry focused Microsoft Dynamics CRM based solutions,” said Joanna Davinson, IBM’s European Public Sector Leader. “This strategic acquisition will help strengthen IBM as a SaaS provider and Global Software Integrator.”

In Gartner’s CRM Forecast Overview, published last summer, the global CRM market was valued in the region of $23 billion, with around 50% of the market accounted for by the top 5 services providers. SaaS continued to demonstrate strong demand, with almost 47% of the revenue attributed to the service. According to Gartner,Salesforce.com is the market leader, with IBM claiming 4% of the CRM segment.

While IBM already has an established position in the public sector market, the company has 98 current offerings on G-Cloud, the acquisition of Optevia signals its intentions of increasing its share of the public sector CRM segment.

Alongside IBM, other players have been bolstering their position in the wider CRM market. Last year, Accenture acquired Tquila and Cloud Sherpas, both of which are Salesforce partners on G-Cloud. The acquisitions more than doubled the number of Accenture’s Salesforce consultants in the UK.

“We have seen significant growth in SaaS as more companies adopt the cloud and digital strategies to collaborate better, drive greater operational efficiencies and accelerate the development of new products and services,” said Emma McGuigan, UK and Ireland MD at Accenture Technology. “One key factor for our continued success in delivering Salesforce solutions depends on having the right skilled professionals to meet the growing demand. With Tquila on board we have the critical mass to more proactively target big opportunities both in the UK and Europe, which will extend our position in the region.”

Despite Salesforce.com’s current market-leading position there have been a number of calls-to-arms by competitors looking to challenge the CRM giant. Alongside IBM’s announcement, Oracle has hinted at its intention to take on Salesforce.com. On Oracle’s earnings call this week, CTO Larry Ellison highlighted the company’s positioning “should make it easy for Oracle to pass Salesforce.com and become the largest SaaS and PaaS cloud company in the world.”