Big Blue consistently spends billions on research and development, and the $6 billion the company has spent helped lead to new technological developments unmatched in the industry.
It has been an especially busy year for technology vendors. However, eWEEK
was most intrigued by the momentum generated
by IBM to date, given that in its third
quarter fiscal 2010 earnings, IBM's
Systems and Technology Group (STG
) saw its largest rise in six years.
Revenues from IBM's Systems and
Technology segment totaled $4.3 billion for the quarter, up 10 percent from the
third quarter of 2009. Moreover, 2010 is the first time in years that Big
Blue will refresh every system in its server portfolio, an impressive feat at a
time when the down economy has forced many technology vendors to slash their
Big Blue has continued to invest a whopping $6 billion to R&D compared
to half of that from its closest competitors. To understand the business
reasons and extent of IBM's innovative
culture, eWEEK recently connected with Jai Menon
Ph.D., an IBM Fellow, chief technology
officer and vice president of technical strategy at IBM's
Systems and Technology Group. Menon is responsible for technical leadership,
research collaboration and technical vitality for IBM
In this interview, conducted at a recent IBM
storage event in New York, eWeek senior
editor Darryl K. Taft put four simple questions to Menon, who took the time to
show just what makes IBM's
systems research arm tick.
What makes IBM's
innovation credo unique?
IBM is unique in how we
treat innovation. Innovation is embedded into our culture to tackle the
toughest computing challenges for our clients. For example, IBM
has approximately 400 technical senior executives, who manage tens of thousands
of employees charged with transforming burgeoning technologies into pragmatic
client solutions. Take storage technology with the movement of data. We're
delivering intelligent methods to automatically move "hot" data to
solid-state drives, while shifting "cold" data to less expensive
tape, to help clients manage the explosion of content in popular areas like
mobile networks, medical imaging and video surveillance, among others.
We innovate in products and services, and we also innovate in business
models. For example, our microelectronics business uses an alliance-based
(versus our competitors' go-it-alone) approach to bring together leaders in the
semiconductor industry to more efficiently solve today's R&D challenges,
while sharing development costs that would be difficult for any one company to
undertake on its own. Members benefit from early access to technology, the
ability to define industry standards, and access to a common manufacturing
base. This effort reduces technology development costs by pooling intellectual
resources and capital assets, centralizes basic research, and creates an open
technology platform with common chip design libraries. By working with industry
leaders, IBM is able to fund a multi-hundred-million-dollar
annual investment in process technology for next-generation technology.
Innovation is not a spigot you turn on or off. Innovation requires continued
financial investments over a long period of time. Since 2002, IBM's
R&D spending is up 21 percent. IBM is
spending far more of our revenues in R&D than our competitors.
How does IBM use
innovation to drive business results and value for your clients and
IBM's $6 billion-strong
R&D budget allows the brightest minds to give us headlights into the
future. At the end of each year, IBM's lab
researchers prepare a global technology outlook, which presents senior
management with an assessment and predictions about key technologies over the
coming several years. Our research team projects which types of emerging
technologies will benefit clients, saving IBM
millions by selecting acquisition targets ahead of the competition while
avoiding bidding wars.
We also move our researchers into product divisions to get closer to
clients. Many members of IBM's executive
team and I started our careers in research.
IBM has also innovated in areas where the
rest of the industry has cast doubts, like the mainframe, which continues to
run the business transactions of the world's top banks. This August, we launched
a new zEnterprise system
to help clients run mixed workloads with all the flagship benefits of the
mainframe, such as availability and security, which are a result of 45 years of
relentless innovation. The new zBX is the world's first heterogeneous
architecture system-another milestone from IBM.
Why is this an important time for innovation? Shouldn't we
be concerned about doing things better, faster and cheaper?
Actually, it's both. We're at a critical juncture of solving
the toughest computing challenges in the most cost-effective manner possible.
With billions of devices added daily alongside insatiable consumer demand for
mobile services and unpredictable transaction rates, our clients are grappling
with how to turn IT into a competitive advantage with limited resources.
This is an important time for innovation, because clients tell us that their
computing environments are complex, have been built over years of investments and
require specialized services. One size does not fit all when it comes to
computing-contrary to popular belief. Our clients tell us that they need a
smart business infrastructure to analyze and extract intelligence from
information, irrespective of where data resides, in real time-without being
bound by a particular system or platform. For example, IBM
pureScale Application with Power7 technology and Smart Analytics systems for
x86 and mainframe environments are each integrated at every level-from
microprocessors to hardware and software, highly tuned for analyzing enormous
amounts of data in real time and handling data-intensive transactions.
What's your view on IBM's
innovation leadership compared to your competitors?
It seems as if our competitors are always trying to copy us.
We got into services and have been investing in storage; [now] everyone wants
to copy us-our competitors have been buying services companies and storage
companies. We showed the importance of integrating the whole stack; now our
competitors keep talking of wanting to be like IBM
and integrate hardware and software.
As a scientist, innovator and businessman, I cannot see myself working for
any other company but IBM.
IBM is technically the most innovative.
In 2010, IBM is No. 1 on the U.S.
patent list, [has been No. 1] for 17 consecutive years, and was the first
company to achieve more than 4,900 U.S.
patents in one year.
IBM is strategically inquisitive and
investment focused. Since 2003, IBM has
acquired more than 100 companies, which reflects an investment of more than $25
IBM is a technology innovator, while
others are simply distributors. We're the only company left in the world that
owns and develops every portion of the technology "stack" across processors,
firmware, systems and software to deliver an optimized product for clients. IBM
is on the seventh generation of power systems; fifth generation of x86 systems;
and is the global leader in middleware, according to Forrester. It would take
many more decades for most companies to catch up. The reality is that our
competitors are just distributors; they buy pieces of the technology at premium
prices and repackage [them] as a unique solution.