IBM has rolled out IBM Cloud for VMware as a Service, a combination of IBM’s hybrid cloud strategy and VMware capabilities that is helping global clients and partners modernise their workloads and expedite time to value in hybrid cloud environments. The update builds on IBM’s 20-year partnership with VMware, expanding upon one of the broadest… Read more »
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The changing landscape of the IT industry has changed the fortunes of many companies. While companies like AWS, Microsoft and Google have been able to cash in on the fortunes, others like IBM and HPE haven’t been so lucky. In fact, HPE recently closed its low-end cloud server business because it’s not profitable for the company any more.
As for IBM, the changes have been too hard. This company was deep-rooted in the traditional server and infrastructure business, so it has been tough to adapt to new technologies like AI and cloud that need a paradigm shift in the way the infrastructure is setup and handled.
Over the last 21 quarters, this almost-century-old company has seen falling year-on-year revenues. In fact, Warren Buffet, the chief executive of Berkshire Hathaway announced that in May of this year, the company sold about a third of its stake in the company. This alone amounted to around $13.5 billion.
To make up for this loss, the company has been aggressively pushing into the areas of cloud computing and AI, but is this a story of too little too late or can IBM get back to the top again?
Well, the latest results announced by the company on October 17th show that revenues have slipped again. However, the good news is that revenues fell lesser than expected. So, many supporters of the company including its management believe that the next quarter could see good returns. This positive statement by the company caused its shares to rise by 8.9 percent the following day, which is the biggest single day gain in the stock market since 2009.
These signs indicate that good things are yet to come for the company and after all, there is still some hope. This is not the first time that IBM had to make this strategic shift in its operations. After almost a near-death in 1990s after the collapse of mainframes, IBM continued to find its niche and stay on top of the technology sector. In fact, if you look back, you’ll see that it was one of the first companies to adapt to the Internet and back open-source software. It assured investors of good returns within five years and even spent billions of dollars in buyback programs. This strategy worked well for the company and its investors.
Likewise, this time too, we can expect IBM to bounce back because it is after all doing the right things. Though AWS, Microsoft and Google have a huge lead in the cloud services market, IBM is not too far behind. With such diligence, good strategy and wise managerial decisions, it can definitely bounce back.
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IBM has launched two new services with an aim to bring more businesses to the cloud.
Currently, many businesses are stuck with legacy systems that make it difficult to migrate to the cloud, and as a result, they miss out on the benefits that come with cloud. To overcome this limitation, IBM has come up with two services that will make this migration easy.
These two processes are IBM Cloud Migration Services and IBM Cloud Deployment Services. Cloud migration services, as the name implies, helps businesses to get ready to move to the cloud. In this service, IBM works with you to identify your existing IT infrastructure and your goals, and based on this, they create a plan to help you migrate to the cloud.
Cloud deployment services, on the other hand, is an automated service hat eases the deployment process. Essentially, it models infrastructure and application solutions and repeats this pattern to automate the entire process. This product is available for public and hybrid cloud providers, including non-IBM products and services.
So, how are these services different from the large repertoire of services that IBM currently offers?
The biggest advantage is that these services make it a lot less expensive and easy for companies to orchestrate their workloads, regardless of the underlying cloud delivery model. The cloud deployment services, in particular, are a next generation set of tools that can automate based on the existing workflows. As a result, the service provisioning time including the time it takes to design, build and deploy is greatly reduced.
Another advantage is that all these services are tied with Watson, so businesses can leverage the power of this cognitive platform as well. This means, over time, the system can learn from patterns and predict behavior and solutions. It can be most helpful for identifying problems, self learning, self healing and avoiding disruptions to existing services.
From IBM’s perspective, both these services are the perfect addition to its existing portfolio of products and services. With more such innovative products, IBM could expand its client base, especially in emerging markets in the Asia Pacific region where the potential for cloud services still remains huge.
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New research from Synergy states while the cloud market is growing at a healthy rate quarter-by-quarter, the four dominate cloud brands are continuing to pull away from the pack, controlled more market share month-by-month, reports Telecoms.com.
Data from Synergy Research claims the four companies now collectively control more than 50% of worldwide cloud market share (IaaS, PaaS and Hosted Private Cloud), with AWS maintaining its lead at the top of the leader board controlling almost a third of worldwide share. Over the course of the second quarter of 2016, the top four grew revenues by 68%, while the next 20 players, who roughly account for a quarter of the market share, grew 41%. All other vendors in this space grew by a collective 27%.
“In a variety of ways Amazon and the other big three players have distanced themselves from the competition in this market and continue to widen the gap,” said John Dinsdale, Research Director at Synergy Research Group. “What marks them out as different is their global presence, marketing muscle, ability to fund huge investments in hyper scale data centres and, in most cases, a determination to succeed in the market.
“The ranking of the next 20 largest cloud providers features some interesting companies, with Alibaba and Oracle growing particularly strongly, but they are all starting from a long way behind Google, which is itself growing by well over 100% per year and yet remains only a sixth the size of Amazon.”
Although AWS is still the dominant market player, growth is slowing. Google and Microsoft both posted growth figures of more than 100%, though it is far too soon to write AWS’ obituary, as it still controls more than three times the market share of its nearest rival, Microsoft Azure.
Microsoft has been going through a number of transformation projects in recent years, and while the market share for cloud shows it will still be some time before it catches AWS, the team are finding success in other arenas. According to additional research from Synergy, in the data centre infrastructure market, HPE and Cisco may be leading the way for public and private cloud hardware, but Microsoft now accounts for just over 40% of cloud software share, with VMWare its nearest competitor at roughly 20%. The research including share for servers, server OS, storage, networking, network security and virtualization software.
“With spend on cloud services growing by over 50% per year and spend on SaaS growing by over 30%, there is little surprise that cloud operator capex continues to drive strong growth in public cloud infrastructure,” said Jeremy Duke, Synergy Research Chief Analyst. “But on the enterprise data centre side too we continue to see a big swing towards spend on private cloud infrastructure as companies seek to benefit from more flexible and agile IT technology. The transition to cloud still has a long way to go.”
IBM revenues continued to fall for a 17th consecutive quarter despite beating analyst expectations and demonstrating healthy growth in its cloud and data business units, reports Telecoms.com.
The company reported a drop in revenues for Q2 of 2.8% to $20.24 billion, though this was an improvement on analyst expectations of $20.03 billion, encouraging shares to rise 2.6% to $164 after hours. The business units which the company deems strategic imperatives, cloud, analytics and engagement, gained 12% year-on-year, though this wasn’t enough to counter the impact of legacy technologies on reported earnings which fell to $2.5 billion from $3.45 billion in 2015. Overall, revenues are now roughly 25% lower than the numbers reported in 2011.
“We continued to deliver double-digit revenue growth in our strategic imperatives,” said CFO Martin Schroeter on the company’s earnings call this week. “Over the last 12 months, strategic imperatives delivered $31 billion in revenue, and now represent 38% of IBM.
“Growth was led by cloud, where our revenue was up 30% to $3.4 billion in the quarter, and over $11.5 billion over the last year so good progress in cloud. Looking at revenue from a segment perspective, the strongest growth came from cognitive solutions led by our analytics and cognitive capabilities and security.”
Schroeter was keen to emphasise the impact Watson is having on the business, as the team continue its journey to redefine Big Blue in the age of cloud computing. Numerous customers were listed as wins for IBM in the cognitive computing sector, as IBM continues to champion Watson as a platform to bring together the digital business with digital intelligence to improve decision-making and add intelligence to products and processes. Watson will continue to be the jewel in the crown of Big Blue as the company moves towards the new digital era.
Despite revenues continuing to fall the team has made a number of positive launches throughout the quarter. Quantum computing is now available on the IBM cloud, the team launched a new partnership with Box to counter the impact of EU-US Privacy Shield on its international business, and an expanded partnership with VMWare expanded the reach of its security portfolio.
In terms of the specific segments, revenues in the cognitive team rose 4%, though this is down from 9% growth in the previous quarter, solutions software revenue was up 6% for the quarter, SAS was another area which recorded triple digit growth and Schroeter claims IBM’s security business outperformed the market by three times. The IBM interactive experience unit also demonstrated healthy growth, as the team continue its journey into an entirely new market for Big Blue.
“We have opened over 30 digital studios around the globe including new studios in Singapore and Seoul,” said Schroeter. “We also completed the acquisition of Aperto, a digital agency in Berlin with over 300 employees and a roster of enterprise clients such as Airbus and Siemens.”
One area which has caught the headlines in recent weeks is the impact of Brexit on the fortunes of the technology sector. Despite concerns from various corners of the industry, it would not have appeared to have a significant impact on the long-term vision of IBM.
“I don’t think that Brexit coming at the end of the quarter helped us at all, but we obviously finished kind of right where we expected to finish,” said Schroeter. “And when we look at our full view of the year, we don’t see an impact, if you will, that has any real materiality on us.
“What I typically observe in these kinds of instances is that our discussions with our clients have to go through a process of reprioritization. So as they reprioritize, the length of time that takes depends a lot on how much uncertainty they’re faced with. And obviously, the political leadership in Europe and the UK can help reduce that uncertainty, but we didn’t see – again, we don’t think it helped but it didn’t cause us to change our guidance.”
While revenues have continued to fall for the tech giant, it would appear to be heading in the right direction. The strategic imperatives business units are now accounting for a larger proportion of the overall figures, now 38%, indicating the tide may be turning for IBM. Schroeter also highlighted the team are not happy relying solely on the progress of Watson, as IBM has acquired 20 companies in the last twelve months, which are now beginning to contribute in a more significant manner.
Although progress is starting to be seen, it would be worth noting it has not been an entirely smooth ride for IBM. There have been numerous new product launches and advances into new market segments, though this has come at a cost of more than 70,000 redundancies over recent months. While there has been a slight increase in share price following the announcement, it would be worth noting previous performance has had an impact on IBM. Shares in Big Blue have dropped 17% since CEO Virginia Rometty took over in January 2012 while the S&P 500 index rose 70% during the same period.
UK retailer Boots has announced it has launched a new app, Sales Assist, to make it easier and simpler for customers to get hold of the products they need.
The app itself is based on the upward trends of customers using devices to gain better value for their pounds as they shop on the high street. By incorporating iPads in a number of shops throughout the UK the app is supporting the retailer’s vision is to use mobility to change the way customers shop.
“At Boots UK we’re investing in innovative new technology to further improve the retail experience for our customers, and mobility is at the forefront of this transformation,” said Robin Phillips, Director of Omnichannel and Development at Boots UK. “By developing Sales Assist, in collaboration with IBM and Apple, and launching it on the 3,700 iPads in our stores, we’re integrating our digital and in-store presence to deliver an even better shopping environment for customers.
“The unique tool allows our colleagues to quickly show product information, ratings and reviews, look up inventory online and make recommendations based on online analytics, all from the shop floor. It will help even our smallest stores feel like a flagship shop, with access to the entire Boots range at their fingertips.”
Boots is using Bluemix, IBM’s cloud platform, to link Sales Assist with the company’s applications and data. The app itself links into the boots.com database allowing shop assistants to locate items, but also use the power of analytics to drive recommendations and impulse buys. The team have not stated how the app will be evolved in the future, though there is the potential for artificial intelligence to be incorporated to drive additional sales in and out of the store.
IBM’s Weather Company has announced the launch of Deep Thunder to help companies predict the actual impact of various weather conditions.
By combining hyper-local, short-term custom forecasts developed by IBM Research with The Weather Company’s global forecast model the team hope to improve the accuracy of weather forecasting. Deep Thunder will lean on the capabilities of IBM’s machine learning technologies to aggregate a variety of historical data sets and future forecasts to provide fresh new guidance every three hours.
“The Weather Company has relentlessly focused on mapping the atmosphere, while IBM Research has pioneered the development of techniques to capture very small scale features to boost accuracy at the hyper local level for critical decision making,” said Mary Glackin, Head of Science & Forecast Operations for The Weather Company. “The new combined forecasting model we are introducing today will provide an ideal platform to advance our signature services – understanding the impacts of weather and identifying recommended actions for all kinds of businesses and industry applications.”
The platform itself will combine more than 100 terabytes of third-party data daily, as well as data collected from the company’s 195,000 personal weather stations. The offering can be customized to suit the location of various businesses, with IBM execs claiming hyper-local forecasts can be reduced to between a 0.2 to 1.2 mile resolution, while also taking into account other factors for the locality such as vegetation and soil conditions.
Applications for the new proposition can vary from the agriculture to city planning & maintenance to validating insurance claims, however IBM has also stated consumer influences can also be programmed into the platform, meaning retailers could manage their supply chains and understand what should be stocked on shelves with the insight.
IBM has opened a new research centre in Singapore as it aims to expand its cognitive computing offering Watson into the Asian markets.
The Watson Centre will be located in IBM’s current office at Marina Bay Financial Centre will help commercialize the cognitive, blockchain and design capabilities through partnering with local organizations and co-creating new business solutions. The company claims the new centre will act as a hub for almost 5,000 IBM cognitive solutions professionals in the Asia Pacific region.
Although countries like Japan and China would be considered more mature in their adoption of cloud and next generation technologies, there are numerous others who are in the early stages of adoption. Countries like India and Indonesia have economies which are demonstrating healthy GDP growth at 7.3% and 4.7% respectively, as well as being the third and fifth most populous countries worldwide. Cloud adoption is beginning to accelerate in countries such as these representing a lucrative opportunity for companies such as IBM.
“Watson and blockchain are two technologies that will rapidly change the way we live and work, and our clients in Asia Pacific are eager to lead the way in envisioning and creating that future,” said Randy Walker, CEO IBM Asia Pacific. “Here they can leverage the latest in customer experience design, use cognitive technology to draw insight from vast quantities of data, and draw on IBM’s huge investments in research and development. In partnership with our clients we are nurturing local talent and building an ecosystem to accelerate the development of cognitive solutions and blockchain platforms.”
It would appear the IBM team will be focusing on the financial services, healthcare and tourism industries in the first instance, and the team already have a number of wins in place including Parkway Pantai, DBS Bank and ZUMATA Technologies. The Asian markets have seemingly been a target for Big Blue, and is one of the areas the company has been seeing positive results in recent months. Despite reporting its 16th consecutive quarterly revenue decline in April, the Asian markets were one of the few areas the team saw growth.
Watson has seemingly been the focal point of the company’s efforts to redefine their market position, as the team aim to position itself firmly in the cloud space. Last month the team announced it would teach Watson Korean in an effort to increase the usage and adoption of cloud computing within the region, and acquisitions over recent months have been geared more towards the IoT business unit.
“So where are we in the transformation?” said Martin Schroeter, CFO at IBM during the quarterly earnings call. “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.”
IBM has announced the launch of Watson Ads to harness the AI potential of its cognitive computing platform and create interactive ads, personalized to individual customers. The first offerings of the initiative will be made available through The Weather Company sub-brand.
Personalized advertising has proved to be big business in recent months as brands aim to move away from the blanket marketing approach, as towards a proposition where one-to-one communications are the norm. IBM believe Watson’s ability to understand and comprehend natural language will enable advertisers to interact with customers on a more personal level, and also on a wide scale.
“The dawn of cognitive advertising is truly a watershed moment. Now as part of IBM, we have even more tools and technologies at our disposal to inspire innovations within advertising, artificial intelligence and storytelling,” said Domenic Venuto, GM of Consumer products at The Weather Company. “This is a huge opportunity to expose consumers to all of the surprising and delightful experiences that Watson has in store for them – and to make advertising a truly valuable interaction for both our fans and our marketing partners, which is always our goal.”
IBM claim the new proposition will aide advertiser in numerous ways including a better understanding of brand perception and customer favourability, helping customers make a more informed decision, improve overall experience, optimize creative and advertising strategies, as well as helping marketers use data more effectively.
As part of the initiative, the team will also create the Watson Ads Council, a collection of marketers from various verticals, who will act as a sounding board for the latest innovations leveraging Watson Ads and cognitive advancements in advertising.
“Transforming ourselves and industries is part of The Weather Company DNA,” said Jeremy Steinberg, Global Head of Sales at The Weather Company. “We’ve embraced big data and leveraged it to improve every aspect of our business, from forecast accuracy to ad targeting. Now we’ve set our sights on cognition. We believe human interaction is the new ‘search,’ and that cognitive advertising is the next frontier in marketing – and we’re leading the charge to make it a reality.”
Watson Ads will launch first exclusively across The Weather Company properties, but this is expected to have broad implications for other marketing channels, including out of home, television, connected cars and social media platforms.
IBM has expanded its portfolio of software-defined infrastructure solutions adding cognitive features to speed up analysis of data, integrate Apache Spark and help accelerate research and design, the company claims.
The new offering will be called IBM Spectrum Computing and is designed to aide companies to extract full value from their data through adding scheduling capabilities to the infrastructure layer. The product offers workload and resource management features to research scientists for high-performance research, design and simulation applications. The new proposition focuses on three areas.
Firstly, Spectrum Computing works with cloud applications and open source frameworks to assist in sharing resources between the programmes to speed up analysis. Secondly, the company believes it makes the adoption of Apache Spark simpler. And finally, the ability to share resources will accelerate research and design by up to 150 times, IBM claims.
By incorporating the cognitive computing capabilities into the software-defined infrastructure products, IBM believes the concept on the whole will become more ‘intelligent’. The scheduling competencies of the software will increase compute resource utilization and predictability across multiple workloads.
The software-defined data centre has been steadily growing, and is forecasted to continue its healthy growth over the coming years. Research has highlighted the market could be worth in the region of $77.18 Billion by 2020, growing at a CAGR of 28.8% from 2015 to 2020. The concept on the whole is primarily driven by the attractive feature of simplified scalability as well as the capability of interoperability. North America and Asia are expected to hold the biggest market share worldwide, though Europe as a region is expected to grow at a faster rate.
“Data is being generated at tremendous rates unlike ever before, and its explosive growth is outstripping human capacity to understand it, and mine it for business insights,” said Bernard Spang, VP for IBM Software Defined Infrastructure. “At the core of the cognitive infrastructure is the need for high performance analytics of both structured and unstructured data. IBM Spectrum Computing is helping organizations more rapidly adopt new technologies and achieve greater, more predictable performance.”