Innovation is the Next

By eweek  |  Posted 2006-03-12 Print this article Print

Big Push"> While its unclear whether partners will take advantage of IBMs program or what partners and customers are willing to pay for something such as innovation, Chris McCoy, senior vice president of corporate development at InnerWireless, said the program could solidify how he currently works with IBM and make Vassar Brothers experience commonplace.

"The more were able to leverage what everyone else knows, the better off the account is," McCoy said.

For IBM, innovation is its next big push, akin to the companys efforts to make on-demand computing commonly known.
On March 1, the company warmed up for its PartnerWorld announcements by releasing a study conducted by its Business Consulting Services unit. In the survey, 65 percent of CEOs polled said they will have to radically change their businesses in two years.

IBM opened its prolific $6 billion-a-year research division to business partners to collaborate on innovation for vertical markets such as health care, retail and automotive. The Armonk, N.Y., company also expects to spend about $1 billion establishing the infrastructure to support the organizations and collaboration efforts, including $250 million for new Partner Innovation Centers worldwide, officials said.

Click here to read how IBM is wooing SMBs with bigger express portfolio, price cuts. The goal, said IBM officials and partners and customers who participated in pilot programs, is to drive technology that not only supports businesses but also enables change.

"If you just look at technology and products, you may be missing a big opportunity, which is innovation in the business processes," said Irving Wladawsky-Berger, IBMs vice president of technical strategy and innovation. "All of a sudden, the nature of innovation has shifted to what new business capabilities can you share."

Sanchez said IBM is moving from providing "system know-how to a broader value proposition at the core of what clients do."

At Mercury Computer Systems, it was the "what they do" that needed to change.

The Chelmsford, Mass., OEM, which participated in IBMs TCS pilot, was grossing more than $250 million annually manufacturing high-end embedded devices and systems for defense agencies, health care and high-tech manufacturing. But the company found its products becoming commoditized by blade servers, said Randy Dean, vice president of business and technology development at Mercury.

"We knew we wanted to serve a broader market in a horizontal fashion if we were going to make it," Dean said. "But we knew we needed to change."

Through acquisitions, Mercury gained several new software and hardware capabilities, but it didnt find its niche until IBM, as part of a pilot for the collaborative program, approached the company to help find a use for IBMs Cell microprocessor technology, originally designed for game systems.

Since June, Mercury has been using the Cell chip to build computer systems for data-intensive applications, driving down the space, time and cost normally associated with implementing those applications.

"This expands the market we serve," Dean said.

For IBM to be successful, the company will have to create what Donn Atkins, general manager at IBM Global Business Partners, calls an ecosystem of innovation. "It is creating a mind-set that says the organizations within contribute to the health of the overall body," Atkins said. "All bring their capabilities [to the table] in a manner that serves the party and solves the problem."

IBMs CEO survey found that businesses count on partners and solutions providers for new ideas 38 percent of the time, almost as often as their own employees (42 percent) and far more often than internal R&D programs (16 percent).

Next Page: Good ideas come from partners.


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