Archivo de la categoría: IBM

acquisition, IBM, M&A, Merger, Opinion

CIOs look to the cloud for seamless M&A

IBM speaker

Sebastian Krause, General Manager for IBM Cloud Europe

For senior CIOs, knowing how to respond to an M&A and divesture situation is key, as mergers, acquisitions and divestitures are a critical component of business strategy.

Projections for European M&A transactions show total deal values are set to rise from US$621 billion in 2014 to US$936 billion by 2017. M&A activity is likely to be bolstered by continued positive monetary policy, with additional cross-border M&A activity likely to take place as a result of a strong US dollar, primarily in Spain, Germany, and Italy.

Increasingly, businesses are using M&A to grow their organisation, achieve economies of scale, expand product portfolios, globalise and diversify.

In the intense negotiations around this business change, IT operations are likely to face dramatic reorganisation as various stakeholders analyse existing systems and look at the potential for efficiencies.

This is about survival and the IT division is likely to be under intense scrutiny during this period, under pressure to perform critical functions such as the integration or separation of critical systems and data, the provision of an uninterrupted service during the transition period, and the prompt delivery of synergy targets. IT strategy is therefore core to any successful M&A or divestiture plan and a critical contributor to its success or failure.

Increasingly, CIOs are under pressure to meet these challenges quickly and at lower cost. Their ability to do so can even impact the way analysts assess potential deals. IT dependent synergies have been found to be responsible for a large proportion (30 to 60%) of M&A benefits, but 70% of M&As fail to meet their synergy targets in the planned timeframe.

Realising these M&A and divestiture targets for enterprise IT environments is complex and requires a holistic approach that considers public, private, IaaS, PaaS, and SaaS as well as non-cloud delivery models.

Some CIOs may approach the situation by simply making adjustments to the existing IT landscape – from CRM, ERP through to office.

This can involve singling out certain components of an established Enterprise Resource Planning (ERP) system, cloning the existing ERP environment, deploying existing systems into the acquired business asset or transferring data between differing systems with the expectation that no issues with integration will arise. These approaches have certainly worked in the past, but can be costly, challenging to implement and disruptive.

This is why many CIOs are looking at a move towards cloud-based applications and infrastructure, which can take the pain out of the M&A process. Broadly, the drivers for moving to cloud services are increased agility, speed, innovation and lowering costs.

They can help organisations going through mergers and acquisitions to realise synergy benefits more quickly, simplify integration and accelerate the change programme, reduce costs through efficiencies, mitigate costly migration investments and encourage financial flexibility.

Top cloud benefits for M&A:

  • Achieving synergy more quickly: Cloud enabled applications simplify portability, integration and deployment.
  • Lowering costs: The cloud can provide temporary burst capacity for the migration.
  • Increased financial flexibility: Cloud provides a flexible cost model, allowing organisations to easily move between CAPEX and OPEX to impact EBITA and cash flow.
  • Simplifying changes: Cloud simplifies the creation of APIs to hide the underlying complexity of multiple, overlapping systems.
  • When preparing for an M&A or divestiture, it’s worth considering what the future IT model will look like, which APIs are needed to simplify required activities and how applications can be cloud enabled for portability and deployment.

Developing a repeatable platform that delivers these benefits and simplifies M&A activities will greatly improve an organisation’s ability to grow and be successful. It may even open up new opportunities that might not have been possible without the cost, flexibility, and scalability benefits that cloud solutions can deliver.

With businesses already realising real benefits, the cloud’s role in M&A is only set to grow. By building a cloud model that works, organisations can avoid reorganising IT operations for each merger or acquisition and ensure a much more seamless transition.

Through implementing an approach that can speed the execution and success of these deals, CIOs can look to deliver value from the IT department that goes far beyond just support, to true business leadership.

Written by Sebastian Krause, General Manager for IBM Cloud Europe

AI, Artificial intelligence, BlueMix, cognitive computing, IBM, News & Analysis, SK C&C, Watson

IBM teams up with SK C&C to teach Watson learns Korean

Bukchon Hanok Village in Seoul, South Korea.SK C&C has continued Korea’s efforts to increase the usage and adoption of cloud computing within the region, announcing a new strategic alliance with IBM focused on the Watson cognitive computing platform.

As part of the agreement, IBM will train Watson to understand and comprehend Korean, and South Korea-based developers will create a number of localized API’s and services to increase adoption rates of such advanced cloud computing technologies in the region. Korean will be Watson’s eighth language, lining up with English, French, Italian, Spanish, Brazilian Portuguese, Japanese, and Arabic.

“Watson remains at the forefront of cognitive computing: advanced systems that learn at scale, understand with meaning, reason with purpose and interact with humans in natural ways,” said David Kenny, GM for IBM Watson. “The South Korean marketplace is moving quickly to embrace the disruptive opportunities from next generation technology.

“Our strategic alliance with SK Holdings C&C will put cognitive services in the hands of more businesses and developers, allowing them to apply Watson within their organizations to help transform entire industries and professions.”

Korea has been making positive strides in recent months to increase the adoption rate of cloud computing within the country, announcing a number of initiatives in March. Adoption rates are reported to be as low as 6.4% within the country currently, which could be perceived as low considering the number of tech companies which has grown out of Korea, though the government is planning to increase this to 13% over the next twelve months. Over the same period, the government also plans to increase the number of Korean cloud companies from 353 to 500.

While this announcement focused on cloud computing as a broader technology set, the government also announced plans to invest 100 billion won (approximately $87.2 million) to foster the development of supercomputers. The Ministry of Science, ICT, and Future Planning said it would invest 10 billion won annually for the next 10 years to boost the growth of artificial intelligence, big data, the Internet-of-Things technologies and other emerging industries through supercomputers. The ambition is to create a supercomputer with a data-processing speed of 1 petaflop (PF) in five years, eventually reaching 30 PF by 2025.

As part of the partnership between IBM and SK C&C, the telco will run Watson and Bluemix from its Pangyo Cloud Centre, to foster the growth of cognitive computing and artificial intelligence. More specifically SK C&C is hoping the introduction of the technologies will improve mobile device experience, as well as consumers’ call centre interactions. SK C&C will also become IBM’s preferred distributor for cognitive solutions in South Korea.

“This alliance highlights SK’s dedication to growing our artificial intelligence-based data services business, strengthening our Ai leadership position, as well as spurring innovation and Ai adoption across Korea,” said Park Jung-ho, CEO of SK Holdings C&C.

The partnership between IBM and SK C&C is one of a number of examples of IBM’s efforts to broaden the appeal to the international audience. SK C&C will assist in developing Watson’s advanced conversational capabilities in Korean, in the same way SoftBank is aiding for Japanese, Mubadala for Arabic and GBM in South America. Each of these companies, including SK C&C, are developing local communities of developers to build, explore and create new applications in their native languages. Korean language Watson services are expected to become available early next year.

cognitive computing, IBM, News & Analysis, quantum computing, Research

IBM launches quantum computing platform for public on cloud

IBM QuantumIBM has announced its quantum computing platform, Quantum Experience, will be available to the public through its cloud platform, who can access and run experiments on the company’s quantum processor.

The platform, which will be delivered onto any desktop and mobile device, will drive IBM’s efforts to redefine its perception in the industry. The company believe quantum computing is the future of computing and has the potential to solve certain problems that are impossible to solve on today’s supercomputers.

“Quantum computers are very different from today’s computers, not only in what they look like and are made of, but more importantly in what they can do. Quantum computing is becoming a reality and it will extend computation far beyond what is imaginable with today’s computers,” said Arvind Krishna, SVP at IBM Research. “This moment represents the birth of quantum cloud computing.

“By giving hands-on access to IBM’s experimental quantum systems, the IBM Quantum Experience will make it easier for researchers and the scientific community to accelerate innovations in the quantum field, and help discover new applications for this technology.”

IBM believes momentum driven from Moore’s law is ‘running out of steam’, quantum computing will be the next catalyst for innovation in the cloud computing era. The power available through quantum computing has the potential to take technologies such as artificial intelligence to the next level, as well as increasingly the long-term potential of IBM’s Watson.

Quantum computing is by no means a new idea, Richard Feynman proposed to build computers based on the laws of quantum mechanics in 1981, but is only now becoming a reality within the industry. A classical computer makes use of bits to process information, where each bit represents either a one or a zero. In contrast, a qubit can represent a one, a zero, or both at once, which is known as superposition. The outcome could result in a platform which can process calculations dramatically faster than classical computers.

Some corners of the industry could see IBM as one of the organizations who have been left in the pre-cloud era, though this announcement and the work done by the team to progress Watson is seemingly creating a new market for the business. As opposed to simply playing catch-up in the traditional cloud markets, IBM would appear to be looking further afield to redefine the perception of IBM.

blockchain, Enterprise IT, IBM, News & Analysis

IBM becomes latest tech giant to join blockchain euphoria

Cloud computingIBM has launched its updated blockchain offering for the financial, healthcare and government industries, on IBM’s cloud platform Bluemix as well as Docker.

While blockchain is another trend which has been empowered by the transition to cloud computing, the same security concerns persist as with cloud computing as the more senior technology family member. IBM claims the new blockchain offering answers these demands and concerns, while also meeting existing regulatory and security requirements.

“Clients tell us that one of the inhibitors of the adoption of blockchain is the concern about security,” said Jerry Cuomo, VP of Blockchain at IBM. “While there is a sense of urgency to pioneer blockchain for business, most organizations need help to define the ideal cloud environment that enables blockchain networks to run securely in the cloud.”

The blockchain adoption seemingly fits into IBM’s continued quest to transform its business, moving away from legacy technologies and build new fortunes in the cloud. Although IBM could be seen as being slightly slow to the cloud party, it has made positive strides in putting its name forward in the cognitive computing sub-sector (IBM’s Watson), and now blockchain. Industry insiders have told BCN tech giants such as Microsoft are interesting in the potential of blockchain, though IBM are one of the first to make such a solid commitment.

While the company has been demonstrating healthy growth in the cloud market segment, its recent quarterly earnings highlighted the decline of traditional IT technologies. The company’s quarterly earnings declined for the 16th straight quarter though its Strategic Imperatives projects, which include all cloud computing efforts, grew 14% to $7 billion.

From a feedback perspective, we asked BCN readers what they thought of IBM’s cognitive computing technology, Watson, which seems to be gaining healthy media attention. 40% of the industry believes Watson is the industry leader for cognitive computing and 20% say it’s in the pack. 40% believe the media attention is down to a powerful PR machine in IBM’s corporate team.

IBM, IBM Bluemix, Internet of Things, IoT, News & Analysis

Kimberly-Clark implements IoT-based app for facilities managers

Iot isometric flowchart design bannerKimberly-Clark’s professional business unit has announced the launch of a new Intelligent Restroom app that helps customer’s better monitor and manage restrooms remotely.

The app, which was built on IBM’s IoT development platform, Bluemix, and hosted on the same company’s cloud platform, combines IoT and cloud capabilities to allow facility manager’s to receive data and alerts from various devices in restrooms, in an effort to improve efficiency.

“The restroom and supplies management have always been important factors in facilities management, however, we now know they’re critical to maintaining the business itself,” said Bryan Semkuley, VP of Global Innovation at Kimberly-Clark Professional. “We wanted to help our clients reduce tenant churn, lower costs, and improve the customers’ experience along the way. That’s when we turned to innovations in cloud and IoT from IBM that can be operated from facilities managers’ smartphones.”

The team at Kimberly-Clark Professional claim initial tests of the app have helped customers reduce the amount of supplies used in the restroom by up to 20%, and the app is now available in North America, with plans to expand internationally over the course of 2016.

“Kimberly-Clark Professional products are used by one fourth of the world’s population on a regular basis,” said Rachel Reinitz, CTO for IBM’s Bluemix Garage. “IBM Cloud, from development platform through IoT, enabled them to develop and deploy the innovative Intelligent Restroom from the ground up.”

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?