Analyst Perspectives

Those of us who have been in the technology industry for many years remember the phrase “No one ever got fired for buying IBM.” Then IBM was both a hardware and a system software vendor, and most IT managers new that hardly anyone would question a decision to go with IBM. These days IBM has done extensive marketing to make itself known for everything “smart” – planets, cities, commerce and of course technology. While its website suggests it offers a limited number of software products, in fact IBM is one of the largest providers software and is committed to innovation. David Stokes, CEO of the U.K. and Ireland division, kicked off its recent U.K. BusinessConnect event by reminding the audience that IBM is driven by three fundamentals – data, the cloud and security.

Regarding the first he pointed out that there are ever growing masses of data and almost limitless things a business can do with it. He illustrated these statement through “interviews” with executives from the U.K. Rugby Football Union and Wimbledon. I have always been surprised by the multitude of statistics commentators give during a game of rugby, and I wasn’t wrong that the number of them seems to be growing: Each player wears a transponder that collects information about every move he makes and sends it in real time for analysis. Then in the same way as tools can analyze and predict machine performance, specialist IBM software can do the same for players – how far they run, in what direction, how many calories they burn, their impact during tackles, how their performance compares to previous performances, the likely impact of a drop in specific metrics and many others. Indeed someone in the audience commented that perhaps games are becoming analyzed too much and we should “just let players get on with it” – something I suspect will never happen as the trend moves in the other direction. Also during the discussion, the phrase “Just because we can do it doesn’t mean we should do it” came up; I will come back to this comment.

The sports examples are only the tip of the iceberg. Car manufacturers can now collect and analyze all the data produced by their vehicles. Using smart IBM analytics they can predict when a car might break down and advise the owner to take it to the shop to fix the problem before it happens. Perhaps the data could show a car speeding and automatically restrict its speed; here is an instance of whether we should do that. An example of how data and analysis can make peoples’ jobs easier was an IBM customer that spent an eight-figure sum to enable data to be collected from all the oil rigs it owns. The results are shown through what the speaker described as one of the world’s most expensive mobile apps as action icons on appropriate employees’ iPads. Also I recently covered the IBM Engagement Manager, which by collecting vast amounts of data and using Watson analytics on it, enables consumers to self-serve more easily and accurately through a mobile app. All of these, illustrate what you can do if you can collect enough data and apply smart analytics.

The cloud has become a key driver for many vendors, and IBM is no different; It recently announced the addition of 12 new cloud data centers. This is perhaps a timely reminder that the foundation of cloud computing actually has little to do with “clouds” – it is really about having data centers where organizations can have their applications hosted, or a vendor having its applications hosted, which users access via the Internet, or vendors providing services based on applications running at remote sites. The key for many organizations is whether those sites, applications and the data are secure, how reliable the service is and how much it costs. The key for me is the applications themselves. Cloud-based applications and services allow companies of all sizes to access and use some of the most innovative software without having highly IT skilled employees to make it possible.

As I said, security is one of most-often cited concerns for organizations as they investigate cloud computing. IBM addresses this issue directly and has developed software and services that can help alleviate companies’ concerns, not just for cloud computing but on-premises as well.

One of the breakout tracks at the event was customer engagement, which is of particular interest to me and which IBM increasingly is focusing on.  A smart move as our benchmark research on customer engagement finds that that improving customer experience is top driver for 74 percent of organizations. One session included presentations from IBM clients and partners discussing how they are using data, analytics and the cloud not only to improve the customer experience but also to reinvent their business models to alter the whole experience. Two examples made the points. One company asked why we need credit cards. The speaker made his point using the following example: If you eat out, at the end of meal you ask for a bill, which typically comes in printed form. Most people examine it, and if it is correct, hand over a credit card that is inserted into a reader. The customers type in the security code and later the payment turns up on the credit card statement, which people may authorize to be paid out of their bank account. The point is that this is a long, tortuous process, which incidentally adds costs at each step. This scenario could replace it: You ask for the bill, it is texted to you, you hit the button on your cell phone authorizing payment, and later the amount is taken from your bank account. Another example goes even deeper into your personal life. A system recognizes you catch the same train to work every day; one day the service is severely delayed, so you get a text advising you of this, suggesting perhaps an alternate means of travel. This can be done now, but again we might ask, should it be done?

These and numerous other examples make clear that there is a lot of data out there already and that machines we use are generating more and more of it. It can be and is being captured and analyzed. The analysis can change a business process, a product design, a customer experience, marketing messages, indeed almost anything. It can help companies reinvent their businesses. As regards the question, should I do it? I am sure that to survive and prosper, businesses at least have to understand what is possible with these masses of data and advanced analytics. IBM has tools that make many things possible and is investing to make them even more capable and readily available. I recommend you investigate how these tools can help you innovate your business, while taking into account how your employees and customers might react to this appetite for information.

Regards,

Richard J. Snow

VP & Research Director