Welcome!

@CloudExpo Authors: Liz McMillan, Roger Strukhoff, Pat Romanski, Zakia Bouachraoui, Dana Gardner

Related Topics: @CloudExpo, Java IoT, Microservices Expo, Containers Expo Blog, Agile Computing, @DXWorldExpo, SDN Journal

@CloudExpo: Article

Transforming IBM to Manage Customer’s Cloud Expectations

IT vendors have to change to deliver services through cloud computing

Recently, I had the opportunity to attend the IBM Software Group's Analyst Insights conference for the industry analyst community. IBM's total revenue of about $100B comes from its combined hardware, software and services sales, but the software group contributes a large proportion of its profits. Cloud services require coordination from all IBM divisions, and it was no surprise that IBM focused an inordinate degree of attention at the event to non-software cloud products.

In this post, I will cover the challenges faced by legacy IT businesses by cloud computing trends, elements of IBM's cloud strategy and a summary of my observations.

Challenges Facing Legacy IT Businesses:

  • Hardware: Traditional enterprise hardware has been built with the CIO as a customer, and the vendor's goal is to make the job of the data center operations manager easy. Hardware equipment must be easy to install and require minimal technical expertise to operate, while expensive contracts are designed to handle complex data center equipment maintenance services. In contrast, cloud service providers leverage commodity hardware for most or all their equipment. With the enormous capacity needed to deliver cloud services, contract manufacturers are recruited to build data center equipment to specifications written by the cloud provider.
  • Software: Traditional software, a high margin product, is under attack from disruptive competitors. Software maintenance contracts consume a significant portion of the CIO's budget. By leveraging open source software to build cloud services, cloud providers can build a volume business and disrupt the status quo of high margin software vendors.
  • Services: Systems Integrators (SIs) have conventionally focused on custom software development and ERP implementations for driving revenue. Organizations that have modified software offerings, such as ERP packages, to suit their specific needs are now locked-in with a perpetual cycle of expensive upgrades. Comparable Software as a Service (SaaS) offerings are enticing customers with subscription billing without pricey upgrades. Adoption of SaaS-based Customer Relationship Management (CRM) and Human Capital Management (HCM) is growing in enterprises, reducing traditional systems integration service costs. While all systems integrators are challenged, those leveraging labor costs as a differentiator may find bigger barriers to overcome.

Some IBM Cloud Strategy Components:

  • Ecosystem: Among technology companies, IBM has a large partner ecosystem supporting its current product portfolio. As the company continues to add new cloud capabilities to its arsenal, these partners must adapt to the new reality and modify their business strategies to provide managed services to customers. Increasing their attention to the needs of entrepreneurial partners could be a successful method of building new revenue streams, and IBM stated its plans and intentions to do just that. IBM is also working to attract the millennial developer audience to leverage its cloud services and platforms.
  • Marketplace: Delivering cloud services through a marketplace has become a core competency of every cloud service provider. Progressive IT leaders will increasingly look for applications composed from multiple services purchased with a click of a button from a common platform. IBM understands the Application Programming Interface (API) economy in which developers can compose an application by mashing up multiple services glued together with API's. With the breadth of their portfolio, IBM will need to deliver a simple, single and self-service marketplace to customers. IBM has unveiled plans to establish this marketplace with the expected launch of its codenamed BlueMix initiative, which will be formally launched in early 2014.
  • Cloud Standards: IBM is focused on supporting and is heavily investing in helping develop open cloud architecture throughout their cloud portfolio and is committed to a number of standards including: OpenStack, Cloud Foundry, Topology and Orchestration Specification for Cloud Applications (TOSCA), and Open Services for Lifecycle Collaboration (OSLC). Some of these standards, like OpenStack and Cloud Foundry, are fairly new and will require more customer adoption before success can be guaranteed. IBM's continued embrace of and investment in open standards help to give its own clients, as well as the industry at large, confidence in using open source technology.

Summary
The Internet has enabled disruptors to challenge every legacy vendor product portfolio (especially those that command high profit margins) with new cloud delivered services. IBM has unique opportunities due to the depth and breadth of a portfolio that falls in the Infrastructure, Platform and Software as-a-Service (PaaS / SaaS) categories.

With a heritage of a huge services arm, IBM might have once advised customers they need additional skills to consume cloud services. But customers are now accustomed to purchasing services through a self-service model. IBM is transitioning to provide clients with the solutions and services they require in the ways in which they want to acquire them. The recent SoftLayer acquisition and an ever growing SaaS portfolio are proof of how the company is better positioned to capitalize on the cloud services market for clients, and for itself.

IBM "made an elephant dance" during the last big disruption of their business in the 1990s. IBM has successfully transformed itself a number of times before, and it will be interesting to watch this latest transformation unfold.

More Stories By Larry Carvalho

Larry Carvalho runs Robust Cloud LLC, an advisory services company helping various ecosystem players develop a strategy to take advantage of cloud computing. As the 2010-12 Instructor of Cloud Expo's popular Cloud Computing Bootcamp, he has already led the bootcamp in New York, Silicon Valley, and Prague, receiving strong positive feedback from attendees about the value gained at these events. Carvalho has facilitated all-day sessions at customer locations to set a clear roadmap and gain consensus among attendees on strategy and product direction. He has participated in multiple discussion panels focused on cloud computing trends at information technology events, and he has delivered all-day cloud computing training to customers in conjunction with CloudCamps. To date, his role has taken him to clients in three continents.

CloudEXPO Stories
IT professionals are also embracing the reality of Serverless architectures, which are critical to developing and operating real-time applications and services. Serverless is particularly important as enterprises of all sizes develop and deploy Internet of Things (IoT) initiatives. Serverless and Kubernetes are great examples of continuous, rapid pace of change in enterprise IT. They also raise a number of critical issues and questions about employee training, development processes, and operational metrics. There's a real need for serious conversations about Serverless and Kubernetes among the people who are doing this work and managing it. So we are very pleased today to announce the ServerlessSUMMIT at CloudEXPO.
AI and machine learning disruption for Enterprises started happening in the areas such as IT operations management (ITOPs) and Cloud management and SaaS apps. In 2019 CIOs will see disruptive solutions for Cloud & Devops, AI/ML driven IT Ops and Cloud Ops. Customers want AI-driven multi-cloud operations for monitoring, detection, prevention of disruptions. Disruptions cause revenue loss, unhappy users, impacts brand reputation etc.
This month @nodexl announced that ServerlessSUMMIT & DevOpsSUMMIT own the world's top three most influential Kubernetes domains which are more influential than LinkedIn, Twitter, YouTube, Medium, Infoworld and Microsoft combined. NodeXL is a template for Microsoft® Excel® (2007, 2010, 2013 and 2016) on Windows (XP, Vista, 7, 8, 10) that lets you enter a network edge list into a workbook, click a button, see a network graph, and get a detailed summary report, all in the familiar environment of the Excel® spreadsheet application. A collection of network maps and reports created with NodeXL can be seen in the NodeXL Graph Gallery, an archive of data sets uploaded by the NodeXL user community.
"There is a huge interest in Kubernetes. People are now starting to use Kubernetes and implement it," stated Sebastian Scheele, co-founder of Loodse, in this SYS-CON.tv interview at DevOps at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Is advanced scheduling in Kubernetes achievable?Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, answered these questions and demonstrated techniques for implementing advanced scheduling. For example, using spot instances and cost-effective resources on AWS, coupled with the ability to deliver a minimum set of functionalities that cover the majority of needs – without configuration complexity.