It’s been a busy year for IBM, from the acquisition of Cognos to the release of numerous products. From his seat in IBM‘s cockpit, Steve Mills has played an important role as his company developed and expanded on its Information On Demand strategy. IOD-a combination of data management, analytics, and industry-specific applications and services-is designed to help businesses more effectively leverage their data. With 2008 coming to a close, Mills, senior vice president of IBM software, discussed his views on IOD, cloud computing and SAAS (software as a service) with eWEEK Staff Writer Brian Prince.
People talk about IBM not being in the application business. Isn’t that sort of a fine line with everything IBM does and the requirements of IOD?
The truth is it’s always been a fine line. Our position has been one of building an ecosystem and not competing with our partners.
So you know Oracle has their broadly defined database and middleware product set, which obviously competes with us directly, and then Oracle has a whole set of application assets that are the various and sundry companies they have acquired, focused on CRM and ERP and industry-specialized application function. Those are areas where we’re not competing, and the fact of the matter is we partner appropriately with Oracle, with SAP and with thousands of other application vendors.
That ability to broadly build out an ecosystem of companies that want to partner with IBM is facilitated by the fact that we’ve kept our focus around this set of middleware capabilities and not gone into the core application spaces that the overwhelming majority of application vendors cover today.
How does IBM leverage IOD internally? How does it manifest itself inside IBM?
Well, we do federate a lot of data inside of IBM. So we have multiple data sources, data stores of different kinds that keep data in them. We then access that data, merge it and analyze it.
A lot of the reports and analysis that exist within the company are multisourced in terms of the data stores from which the information is extracted. It’s then brought together in various types of analysis, from simple spreadsheets right through more complex analytics. So we look very much like what we tell our customers to do, [which] is leave your data where it is, and then pull it together for whatever the purposes are that you may have from a use perspective.
Where do you typically find that enterprises are on this journey toward what IBM calls an Information Agenda, this information-based enterprise? How far along do you think the typical enterprise is in that journey?
I think that most of them are at the early stages, which is not to say that they haven’t invested in integration technology and that they don’t try to move data around, consolidate data today. They’re all doing some of it.
For large businesses, you wouldn’t say that any of them have yet to get started. They’ve gotten started. But they’re very much in the early phases. Most of their work over the last decade has been more focused on just simply trying to interface the systems that are there [with] each other, rather than create a full integration architecture.
Now, I would say with the acceleration of [SOA] service-oriented architecture models of process integration that really began to build momentum in 2004, that post-2004 there’s been a big increase in the interest in data integration as a companion to process integration. Customers that see the benefits of horizontal process integration creating integrated order-to-cash models straight through processing, as soon as they get into that on the business process side they immediately discover that they have to start thinking about common data architectures and data integration. And that’s helped accelerate our whole information integration business over the last four years or so.
But they still have a long way to go. They’ll tell you that they still have a lot of clutter, redundancy. They’re still trying to create common data models for their businesses. So it’s a long journey. My perspective is that the opportunity here, as we will experience it, is going to stretch out over the next couple of decades. There’s that much work to be done to achieve a reasonable level of integrated data, consistent data, common data models, effective data mapping, data analysis. There’s 20 years or so of work. I mean, there’s at least 30 years of mess. You can’t clean up 30 years in just a few.
IBM and Software as a Service
What opportunity does IBM see as far as SAAS? What is your take on that?
Well, we view this, I think, with a little bit wider definition than just SAAS as it is depicted by the venture capital community and some of the better known companies that people identify with this idea of software as a service.
More broadly defined, this is really about business process outsourcing. There are a huge number of companies that participate in that. In fact, the companies you would view as more traditional business are far bigger than the venture-funded SAAS companies.
Most of the banks are involved with various forms of online services, delivered not just to consumers but on a business-to-business basis, especially for helping small businesses manage their finances.
Companies like ADP have been in business for decades. American Express is in this business. UPS and Federal Express are in this business. They want to engage you in the process transformation of your inventory management supply chain. So it’s far more than just wanting to ship your packages; it’s really getting into your business processes, and part of their value proposition is they’re actually going to use their computing systems to help you manage your environment more effectively.
That’s no different than Salesforce.com using their computing system to help you manage your remote sales force more effectively. Same idea.
So as we look at this from an IBM perspective, we see ourselves participating from multiple angles. Obviously, all of these companies that are performing these services need hardware and software. So we’re supplying them with hardware and software. They need scalability, reliability; they need strong technology that matches the need for a 7-by-24 service delivery environment. Certainly [that] matches our design points quite well.
We’re participating in this marketplace in terms of actually delivering some of these platform services. We have our managed business process services initiative, which actually involved IBM doing transformation and then operation of selected business processes. We have our Bluehouse initiative, which actually allows customers to effectively as a service get at a set of platform-hosted collaboration pieces that are part of our Lotus portfolio. All these things are examples where IBM is participating in this more broadly defined platform delivery of IT services, and, by anyone’s definition, this stuff is software as a service. It’s one of the things that we do.
Do you think that data will ever live completely in the cloud? Is that inevitable?
Although it’s theoretically possible for you as an individual to put all your data in the cloud, it becomes a matter of personal choice as to whether you think that having your data out there is fully reliable and fully secure.
I think most people step back from this and say, “Well, so what do I want to put in the cloud? What’s really important to me?”
You may have some casual activities and hobbies, you may be an avid opinion writer, and you’re more than happy to have your documents somewhere else, and you don’t care about a local copy. You may feel very differently about your personal health records or your investment data-that’ll come down to personal choice.
I think the same choice gets made by businesses: Whom do I trust with this information? What compliance requirements does it have? What about auditing, security, privacy? Clearly, companies do trust major providers with sensitive information. Hewitt [Associates] and Fidelity are in the human resources and benefits business, just to name two companies, and clearly by virtue of providing those services to corporate customers, they are holding confidential personal data.
By the way, we outsource some of our HR and benefits to various companies; therefore, my information sits outside of IBM, not just inside of IBM. And I’m comfortable with that, because IBM as a company understands what criteria our suppliers have to adhere to, and the suppliers we choose are very serious about being auditable and meeting privacy and security compliance.
ADP’s been in business for more than 30 years keeping personal payroll information, for example. I think they have a stellar track record of security and privacy. So I think that there isn’t anything in a business context that you might not trust; it really comes down to the decision of the user and the corporate buyers-how they feel about third-party service providers.
But, obviously, the barrier related to security and privacy has clearly come down as companies are deploying business practice techniques and structures and are willing to allow themselves to be audited by outside auditors. You’ve read some of the counter ideas here. And my friend [Oracle CEO] Larry Ellison has been floating other notions out there of late-that this whole idea doesn’t make a lot of sense.
If you think through it more broadly, you realize that this is a concept that has been in place since service bureaus first began in the 1960s. Today we’re using other terms. We seem to change the terminology every so many years to make it sound new, but software as a service is no different than the last 40 years of online service provider models that I think have evolved to become very sophisticated.
IBMs Information Management Agenda
Looking ahead, from a technical standpoint, what’s on your agenda for IBM?
There are obviously a broad range of things that are, I think, generating excitement in the market. Specific to information management, to sort of come back to the start of our conversation, I think some of the more interesting, exciting things relate to real-time systems where you want to do on-the-fly analysis. The idea where I’m collecting data literally as it moves, so you have this data in motion.
The easiest example is obviously financial markets. You have tons of data in motion. All kinds of primary, secondary markets, markets outside of the United States-there’s a lot of market data out there, and it’s literally changing every second, every fraction of a second.
Today the technology exists to collect all of that data all at once. Not just collecting pieces of it, but literally 100 percent of it, of all market data, can be fed through a common pipe and analyzed on the fly.
The technology is there today; we have it in our portfolio. We talk to financial services companies about it all the time-that we can collect this sum of all market data in existence, public and private, and we can apply our analytic tools, our data management technology. [We] show them how they can analyze that data on the fly without slowing down its movement and better understand the patterns of relationships of different elements one to the next.
In today’s very high-performance, low-latency, high-transparency financial market space, the companies that have the best ability to analyze that data in real time-see patterns and make decisions-are more likely to find profit-making opportunities than those that don’t.