IBM Is Banking on Academics to Win the Services War with HP-EDS
IBM researchers, the Ph.D.s and technologists by vocation, not profession, the lab-coat academics who toil years in the bowels of Big Blue on theoretical projects two decades in production, are now tinkering on customer problems to beat a service contract deadline.
It's a major shift in IBM Research's role in the organization and could be a differentiator for IBM's IGS (IBM Global Business Services) business in its battle for consulting and services dollars against Hewlett-Packard. It needs all the help in can get. HP's purchase of EDS (Electronic Data Systems) earlier in 2008 made HP a giant in data center design and implementation.
As IBM Research sees things, the effort might also be its ticket to remain the pseudoacademic enterprise it has long operated as.
It happened about two years ago. IBM began opening the doors to its research organization to provide customers and channel partners with details on ongoing projects and access to intellectual property not yet in the market, and even began working alongside IGS to fulfill service contracts.
But the genesis was about eight years ago, said Bill Pulleyblank, vice president of IGS' Center for Business Optimization. At that time, Pulleyblank was part of IBM Research. IBM Research had always operated almost as a university-style think tank. Researchers worked for years on projects that might never see the light of day -- or might shatter the status quo. Hard disk drives, carbon nanotubes, relational databases, speech recognition and data encryption all came out of IBM Research and its labs claim a pair of Nobel Prizes.
But IBM Research was expensive and isolated from the revenue-producing divisions that provided the cash it spent, Pulleyblank said.
"Research said we're gonna do all this cool stuff, but we know we need to support IBM's lines of business to stay in business."
There is no official process or mechanism obligating Research and its 3,400 employees to support IGS, but there's a directive from IBM corporate and a commitment to the role from Research, Pulleyblank said.
The support takes three directions.
IBM Research personnel review a customer engagement, or work force management data analysis implementation, to determine a better route to the solution. "You get extremely interesting products this way," Pulleyblank said. IGS looks at its solution offerings, such as Cognos and the solutions capabilities, and considers what research assets might be in place to augment the effort. This requires IGS and Research to be aware of each other, Pulleyblank said. IBM Researchers will also play firefighter, jumping into tough spots to troubleshoot problems and solutions. This one is particularly neat, Pulleyblank said. You're pulling in guys who know this up and down and have worked on solutions that maybe no one has even seen yet.
The program, as quiet and unofficial as it is, has the potential to be a services differentiator.
HP doesn't match this research promise to services. Its own HP Labs does not regularly work on services engagements, an HP spokesperson said.
HP Labs 600 researchers frequently meet with services customers and converse with HP's TSG (Technology Solutions Group) to gain insight and guide the next generation of solutions, the spokesperson said. But it would be highly unusual for HP Labs to engage in a services solution, she said.
It remains to be seen if IBM can actually deliver value by putting its research teams on customer problems or if it is even able to leverage Research consistently and efficiently without a formal process, but few in the business can match the clout and industry knowledge of IBM Research. The academics in lab coats could be the secret weapon winning sales dollars.