Special Features:
IBM PUSHES NEW PRODUCTS, PROGRAMS
FOR ON-DEMAND E-BUSINESS
by William Fellows for the451.com
IBM has staked its future on the ability to create on-demand e-businesses
that
are cheaper to run and maintain, better utilized and able to more quickly
adapt to changing business requirements. Organizational change, by the way,
will be required of companies to allow them to buy the technology in new ways
that can fulfill these promises. IBM continues to backfill the vision with
products and programs, although it's primarily a services opportunity.
Impact assessment
The message
IBM has announced new technology, financial programs and delivery models to
drive momentum behind its strategy of enabling on-demand e-businesses.
Competitive landscape
HP hasn't offered much that specifically addresses the 'on-demand' model or
any differentiated approach. Sun's emphasis is to deliver the presumed
benefits of integrated, adaptive infrastructure by selling technology that
enables users to do it themselves. Sun hasn't committed to any specific form
of OGSA integration. Dell believes 'new' managed, outsourced or other on-
demand services are no more than a return to time-sharing models, albeit with
some additional flexibility.
The451 assessment
IBM is steadily fleshing out the on-demand e-business model, though quite
where that's going isn't clear. The technology (OGSA-enabled WebSphere,
storage virtualization and server provisioning) is clear; the financial and
service programs less so because IBM's goal is essentially to make more money
by selling less stuff. Or by selling it in different ways, i.e.
outsourced/managed. The ASP model looks more compelling this time around
because vendors, not VCs, are backing it – but whether the industry can wrest
the degree of organizational change they claim is required is unclear.
Strategy
Last year, IBM CEO Sam Palmisano spelled out the company's belief that
on-demand IT will deliver the on-demand e-business. In Q1 2003, that was
followed by a call for a change in process and culture within organizations to
allow delivery of this new computing model.
The ability to buy the class of on-demand services necessary to fulfill
this
opportunity will in part be driven by organizations' willingness to change
their processes – either of procurement, implementation or use, or all three.
In short, users must change the way they buy technology in order for vendors
to realize their own ambitions – and for users to realize the claimed
improvements in utilization and cost savings that result. One form of the
model, in essence, enables users to turn fixed costs into variable costs.
Hence, organizational process change has been installed as the industry's
next
big idea, and as the way to backfill the its new focus on dynamically
provisioned and on-demand services. Investment bank Merrill Lynch observed
that this transformation is financially important because it allows IBM to
move beyond the IT budget to attack a customer's cost of goods or expense
lines.
Last week, IBM reiterated the reason this change is important. Although the
industry is in the doghouse – and the speculation is whether, not when, it
will recover – the company insisted that the industry remains attractive,
important and that, long-term, it will continue to grow faster than GDP.
While historic shift in an industry has always been fueled by a stream of
new
technologies, products and gizmos, Palmisano said, future growth will not be
fueled that way – for three reasons:
First, IT is a $1.3 trillion industry, and a single technology will not
drive
growth for the whole industry. IT is too big and too interwoven into the
fabric of business for that to happen. Second, although technical innovation
is, and always will be, a driving force of IBM and the IT industry, customers
don't value technology for technology's sake – they value the application of
technology to solve serious business problems. Third, customers no longer
think about computing as a collection of piece parts. Today, computing is
viewed holistically: as a technical architecture, an end-to-end system, a
computing model.
Instead of using technology to automate people-driven and stand-alone
back-end
operations, or applying it to procurement or manufacturing or creating Web-
based stores, IBM believes that technology must now pull those stand-alone
operations into a unified whole, to boost productivity and deliver tangible
returns.
The company's strategic thinking for e-business on-demand is that the IT
infrastructure must be more integrated and automated, with much of its
complexity hidden from the people who need to use it. The result, it believes,
will be businesses that get greater productivity from their technology
infrastructure and save money that can be invested in future innovation.
Technology
IBM's technology deliverables support its three key on-demand e- business
enablers: virtualization, automation and integration.
First is a version of WebSphere that includes integrated support for the
Open
Grid Services Architecture (OGSA) APIs. The IBM Server Allocation for the
WebSphere Application Server product was a joint development project by IBM
Systems Group, IBM Software Group and IBM Research. Designed for use with
WebSphere Enterprise Edition it will cost $100,000 and up, and IBM will add
Tivoli systems management to it in late 2003.
Tivoli has created a Web server provisioning package for the BladeCenters
using IBM Director and WebSphere, plus Tivoli Storage Manager and monitoring
for server deployment. It's also working on a consolidated identity and access
manager.
On virtualization, IBM reiterated the formerly announced TotalStorage
Virtualization family (nee StorageTank), including the SAN Volume Controller
(Lodestone), the SAN Integration Server and its commitment to the SAN File
System.
There are two financial offerings that it claims support more flexible
payment
options.
First is an extension of the capacity-on-demand (CoD) program. Basic
permanent
and temporary processor upgrades are offered in zSeries and iSeries, however
CoD is currently offered only for permanent processor upgrades in its pSeries
line, not temporary ones. That changes with the new pSeries servers announced
this week, including the Power4+ boxes.
A new standby CoD in the BladeCenter system offers users a way to purchase
a
system with seven active two-way blades and seven inactive blades. Users get
six months to turn them on (though they can't turn them off again, so is it
really on-demand?). A similar CoD program is offered on Shark: an extra 7TB
disk is shipped and can be provisioned as required.
Second is the Open Infrastructure Offering, which IBM says gives users a
way
to buy some or all of their infrastructure for a single fixed monthly cost and
upgrade as required to new services and technology. It's not clear what
products or customers this applies to.
Competition
Hewlett-Packard's recent tendency to be waiting with a competitive response
in
hand to every IBM or Sun announcement points to the breadth of its existing
storage virtualization offerings; however, it hasn't offered very much
specifically addressing the 'on-demand' model or any differentiated
approach.
Lacking a scale services business, Sun's emphasis is to deliver the
presumed
benefits of integrated, adaptive infrastructure by selling technology that
enables users to do it for themselves. It positions the IBM (and HP) approach
as requiring users to hand over IT, people, and ultimately, control of their
businesses, for which they are then held to ransom by outsourced program
offerings. Sun hasn't committed to any specific form of OGSA integration.
Dell, likewise, believes that these 'new' services, whether managed,
outsourced or other on-demand, are no more than a return to time-sharing
models with some additional flexibility.
Courtesy www.the451.com
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