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About a month after Ambuj Goyal stepped into the role of general manager of IBM Information Management in 2005, he articulated a vision of the company’s plans at an analyst forum in Boston.
That vision is called Information On Demand, IBM’s answer to helping businesses better derive value out of their data. A marriage of master data management, analytics, industry-specific applications and services, IOD has grown into a broad umbrella of solutions designed to optimize information for businesses.
And it just got bigger.
This week, IBM will unveil a host of new products and services during its annual Information On Demand 2008 conference in Las Vegas. Continuing its strategy of focusing on specific verticals, the company is releasing seven new financial management and industry-specific solutions. In addition, IBM is announcing new offerings from IBM Optim as well as the company’s Enterprise Content Management and InfoSphere portfolios.
There are also new services on tap. The company is launching Information On Demand Foundation Services, consulting services that draw on technologies from FileNet, InfoSphere and Cognos.
At its core, the premise of IOD is that businesses are moving from what Goyal calls an “application agenda” to an information agenda. In IBM-speak, the application agenda is the traditional focus on utilizing applications to automate business processes. While investments in such applications are likely to continue, IBM banks on the growing emphasis on applications that can help drive businesses’ optimization efforts.
“Now [clients are] saying …-Yeah I did my supply chain, but can I do a better job of partner management so I can optimize it?’ That’s an information-based agenda. I have done a great job of automating my HR, but can I leverage information to do work force analytics?” Goyal said. “These are things, assets that we have created on top of our Information On Demand stack-structured information, unstructured information, created trusted information out of it so we can do the appropriate analytics and feed it into the right application.”
While the past two or three decades have been about automation, the next 10 to 20 years will be all about business optimization, Goyal contended.
Although he wasn’t ready to paint the picture in quite those terms, IT analyst Dwight Davis agreed that enterprises increasingly want a clear vision of how technology can be translated into profitability. In the years immediately following the dot-com bubble burst, there was a greater focus on ROI (return on investment) and TCO (total cost of ownership), he said. In recent years, that tactical focus on TCO and ROI has become more sophisticated and extended into the realm of the business value of the technology itself, he explained.
“[IT is] an engine that can be seen as more than just a cost center and can really be a part of a company that drives business value and increases revenue and improves customer satisfaction and makes supply chains more efficient and all those other things that have direct business ramifications,” said Davis, an analyst at Ovum.
Integration Challenges
Other companies are pursuing similar strategies leveraging business intelligence, but IBM’s IOD strategy is notable for its scope. Davis pointed out that IBM rivals such as Oracle would likely contend that while IBM has all these different pieces of the puzzle, there are integration challenges.
“You can quickly get into the weeds of claims and counterclaims,” he said, conceding the size of a product portfolio is a superficial measuring stick. However, he added, “[IBM] has brought so many new technologies and products into that company specifically with an eye toward the Information On Demand objective that I think by most objective measures IBM would still have the edge when it comes to breadth of product portfolio.”
The company certainly has not been shy about making acquisitions to support IOD. In the last two years, it has purchased numerous companies around IOD, from FileNet to DataMirror. Perhaps the most significant of the buys, however, was the acquisition of Cognos, which closed earlier this year.
Robert Ashe, a veteran of Cognos who now serves as IBM’s general manager of business intelligence and performance, described the IBM stack as a pyramid. At the bottom are data and content management tools; above that layer are information integration, warehousing and management solutions. At the top level of Ashe’s pyramid is Cognos’ business intelligence software.
“For many years-two decades now-we’ve been dealing with the top part of the pyramid,” Ashe said. “IBM, over time as they’ve developed this Information On Demand strategy and have acquired and developed internally, [has] built up a lot of the bottom part of that pyramid. The whole IOD strategy and IBM’s acquisition of Cognos is to make sure that we can deliver on that supply chain of information for large and small companies that are now really doing information as a strategic asset, not a by-product.”
The multibillion-dollar marriage of the two companies also allowed for tighter integration between Cognos’ BI and IBM’s other products.
“When you look at what we’ve specifically done with respect to the IOD stack, it’s starting to realize some of the benefits of the acquisitions,” Ashe said. “Cognos now ships within DB2 as a starter edition. We support a key new capability called ‘cubing services.’ Really critical to this whole idea of data governance and a trusted data source is our integration with the InfoSphere product line, where we support data lineage and their glossary capability as well as their data quality tool and metadata integration with the DataStage product in the InfoSphere product line.
“From a technology perspective, I think we have been able to very quickly tap into IBM research and access a number of capabilities that otherwise would have really taken us years and years to acquire or develop ourselves,” he added. “The area of predictive analytics, some of the search capability, some of the visualization capability-so a number I think of emerging technologies that are being brought to bear.”
IBMs Brand-New Bag
IBM’s Brand-New Bag
At its upcoming IOD conference, IBM is pulling the covers off several new solutions. The seven industry-specific and financial management solutions include:
- Bank Client Servicing for mutual fund reporting and analysis
- Clinical Resource Planning to drive modeling and forecasting for pharmaceuticals
- Earned Value Management to track capital costs for federal agencies
- Internal Control to promote efficiency in financial management and consolidation
- Municipal Scorecarding
- Sales and Operations Planning
- Extensible Business Reporting Language (XBRL), which allows customers to align with current standards for reporting business and financial data.
It is also unveiling new versions of IBM InfoSphere Information Server and InfoSphere Traceability Server, with the latter designed to help companies use RFID tags and bar codes more effectively.
Beyond the product announcements is the launch of Information On Demand Foundation Services. The services build on Information Agenda workshops announced by IBM last month to help businesses develop strategies to better leverage their business data. The new offerings consist of one-day workshops followed by a 12-week in-depth assessment and analysis with IBM experts.
“What we’ve introduced are foundational services around these core technology areas that are really designed to help the customer establish the competency around the use of these technologies,” said Tom Inman, vice president of Information On Demand Acceleration.
“It starts with a one-day workshop for customers to establish the plan around this,” he said. “Then it’s followed by an in-depth assessment and analysis of the various projects, how those projects need to be architected and deployed, [and] the skills that will be needed to do that. Then we help the client learn how to align the information itself and then deal with the people, the processes and the technology issues.
“So we’re not just providing the arms, if you will, and saying, -Good luck,'” he added. “We’re actually providing the arms, and we’re teaching them how to use them.”
Services have been a key component of IOD, and the growth of revenue in that portion of the company’s business in part reflects that. When taken in combination with its software solutions, it is also part of what distinguishes IBM from other vendors.
“Many companies are trying to leverage BI in one way or another, but I believe that IBM’s IOD effort qualifies as the latest natural step in an information-centric journey IBM has been on for many years,” opined Charles King, principal analyst with Pund-IT. “It’s certainly a software play, but it also uses other foundational IBM tools and solutions to achieve its ends.”
In its third-quarter earnings report Oct. 16, IBM officials stated that revenues for Information Management software increased 26 percent.
“Global business services and global technology services grew … but also our capabilities that are there in terms of software are growing with that,” Goyal said. “You know the database market is a reasonably flat-to-small single-digit growth market. With our earnings announcement, we said, Look, with the whole Information On Demand value proposition is significant growth in relational database products as well. Why? Because underneath the Information On Demand you need to actually store information somewhere or extract information into a master data management, and deliver value to the endpoints that we are trying to get done.”
“Overall, we work with each other,” he continued, referring to the software and services groups. “In fact, over 10,000 consultants across the world are trained now in offerings like performance management, business intelligence, Information On Demand [and] Information Agenda so that people can make successful transformations of their clients. But the assets that we have created, over 140 assets that are industry-specific … that we announced called Information Agenda Accelerated, are helping clients. Things like data modeling … they are helping clients move to [an] information agenda much faster. It’s not just about consulting.”
The Future of IOD
The Future of IOD
Looking ahead, Goyal said the company will focus more on optimizing additional business processes with an eye toward industry-specific solutions. For all the services and products that fall under the IOD umbrella, Goyal is quick to say he feels the company has only scratched the service. The shift from application agenda to information agenda is a journey that will unfold slowly, he said.
“[The] application industry was not created in a day; it’s about 20, 30 years,” he said. “What we have done, we have all the assets to create the information journey, or the information-based enterprise or the information agenda-basically truly delivering the value of Information On Demand.”
IBM still faces competition from Oracle, Microsoft and others when it comes to information management. Differentiating itself will mean meeting the challenge of providing comprehensive solutions to information management head-on. But it will also mean building a narrative around its initiative, which IBM has arguably done better than its rivals.
“I think what IBM has done better than anybody else, including Oracle, which I tend to think of as the closest player in this particular space, has been … to really articulate its vision for Information On Demand,” said Davis, the Ovum analyst. “They were fairly early on in identifying this as a market need and crafting a marketing story to go with it.”
The good news for vendors is that enterprises don’t view business optimization as a catchword. It has become a key factor in IT spending, even more so as the economy continues to struggle.
“I think that the business value issue is important and will become more so as the recession deepens,” King said. “At the heart of things, businesses want to know/ensure that their IT investments are paying off. Helping them maximize the value of business information is a great proof point to that end. The business value issue will also pay increasing dividends as IT becomes increasingly commoditized.”