Oft cited as a key player in the social, mobile, Big Data quartet, cloud is widely viewed as an important enabler of business productivity. But what kind of cloud is sung in that refrain? Interestingly, variations on the cloud theme appear to be as numerous as provider organizations, and typically represent an elaboration on the provider’s market orientation. This is the case with IBM, at least, which Marc Dietz, director, SmartCloud Solutions, IBM Software Group, claimed considers cloud as “a major growth driver for IBM and a major part of its strategy.”
According to Dietz, the SmartCloud brand “represents all things cloud computing from IBM split into different areas.” At the SmartCloud foundation, this would include infrastructure, such as the gear to build private cloud, as well as IaaS and PaaS. The second SmartCloud pillar is managed services, where, for example, IBM would manage a SAP license operating in a cloud environment, and a third area consists of SmartCloud Solutions — primarily multi-tenant, public cloud SaaS hosting. The breadth of this cloud portfolio in some ways belies the simplicity of IBM’s approach to cloud delivery: essentially, cloud acts as one component in IBM’s services rich approach to the market. While the company has historically gathered together technology pieces to create solutions addressing specific industry, horizontal or customer issues, the same might be said of the cloud era — with the proviso that cloud adds an additional element of choice in delivery option. In this services schema, SmartCloud acts less as a standalone offering, but more as a support for the development of customer solutions. Dietz noted, “We do not lead by asking ‘what kind of SaaS product do you want?” We ask, ‘how do you want to manage procurement, or how do you want to do better marketing?’”
A good example of this solutions approach can be found in IBM’s SmartCloud business solutions portfolio, which Dietz explained is growing organically and inorganically through acquisitions with the aim of developing additional SaaS solutions to meet varied client needs. Within that portfolio, IBM has designed specific solution sets, such as Smarter Commerce, which was introduced two years back to cover the continuum of ‘Buy, market, sell and service” activities in the enterprise. While ‘Buy’ may entail deployment of IBM procurement, supply chain visibility, spend analytics and management tools, IBM also has products for ‘market’, such as web analytics and a campaign management tool for multi-channel targeted marketing and communications), for ‘sell’ (its ecommerce platform), and for ‘service’, including Tealeaf for customer experience management on a website or mobile device. In addition, there are related solutions that fall under the cloud umbrella, that Dietz noted can be overlaid on Smarter Commerce, such as SmartCloud for Social Business (social business technologies to connect employees and partners) or other IBM analytics products and solutions.
To unify these various cloud offerings, IBM has drawn on an historic services capability. As Dietz explained, “One of the strengths and benefits that we are trying to bring to our clients is integration. As opposed to behind the firewall software, where you might have three to four vendors and do some modifications to make them work together, if you have three or four SaaS providers, operation can be more difficult because of siloed data. So as we acquire companies or build onto the ecommerce platform with web analytics and digital marketing capabilities, we are [simultaneously] building those integration points so that the data is in one place.” This integration, combined with the breadth of the business solutions portfolio that IBM is building has enabled a modular approach: “customers don’t have to buy everything at once,” Dietz explained, “and if they do decide to add on, it comes pre-integrated.”
In considering acquisition targets, IBM typically looks at fit with the existing portfolio, but also at how much integration is necessary and beneficial, and then builds the solution into a bigger roadmap. Dietz pointed to a move in the industry towards API based integration with components, individual cloud services or full applications. “We are doing a lot of work in that direction,” he added, and “when considering the acquisition candidacy of company, IBM would also consider ‘open standards’ as in how the application is built, how it is run, and its security and privacy provisions, which would be thoroughly vetted.” Bringing a third-party acquired SaaS application onto the IBM SmartCloud is a long term proposition that would be case specific, and happen on an as-needed basis.
Beyond app integration, IBM has also developed integration capabilities to enable heterogeneous client environments — the mix of on premise, cloud and hybrid solutions. Good examples include IBM’s Cast Iron technology that can integrate different SaaS solutions behind the firewall, and elements of IBM services which can be deployed to deliver a hybrid environment.
As an example, Dietz described the IBM’s addition of on-premise and SaaS editions of Digital Analytics for analyzing website or mobile activity to IBM’s on-premise Commerce product. This has now been supplemented with an “aaS” version of the Commerce product to enable the client to deploy an e-commerce platform from IBM all in the cloud, including the base e-commerce platform as well as Digital Analytics. The goal is to provide client choice. “We may not have an on-premise and SaaS version of everything,” Dietz observed, but “more and more we see a shift to the cloud, to SaaS, and are trying to give as much choice to clients in that regard as possible.”
This shift to cloud is being driven by customer need to do things more quickly, without the burden of waiting for IT to deliver, but it is also being enabled in Dietz’s opinion by vendor flexibility — for example, IBM ability to move applications back and forth from on-premise to cloud and back again. However, SaaS is not simply a deployment choice in his view. In some cases, an on-premise and SaaS solution may have very similar features and functionality and questions around deployment would have most to do with the CAPEX vs. OPEX equation. “But more and more,” Dietz noted, “we will see transformative capabilities in the cloud — new capabilities around collaboration, around connecting businesses and trading partners, where there is leverage of the APIs of other cloud based applications to mash up and form new capabilities. We are starting to see this shift, though it is still evolving.”
According to Dietz, IBM is experiencing good tractions for its cloud solutions from a number of quarters, including emerging markets like Latin America, Asia, and Russia that may not have the same levels of installed infrastructure, and hence are able to move more intuitively to cloud. Demand is also building in developed regions out of customer interest in innovative technologies, pre-integrated solutions and a shift to OPEX — driven in large part by attraction to business portfolios like Smarter Commerce. This solutions orientation is key to IBM’s strategy. While all out transition to public cloud could generate additional cost efficiencies for IBM, Dietz explained that the company does not typically approach customers by detailing cloud benefits, but rather begins with a discussion of customer needs. In some instances, a SaaS offering may be available and appropriate — and offer benefits such as reduced complexity for the client, no additional upfront costs, lower TOC, greater business agility, as well as the continuous delivery of IBM innovation through automatic updates. “Depending on the solution, a cloud solution natively or inherently has more value drivers than an on-premise solution might, or less complexity. A non IBM example would be, ‘could you build Google behind your firewall?’ You could, but why would you if there is already a better model out there.” However, IBM services capability, particularly around integration, means that unique customer requirements for hybrid or multi-SaaS application environments can be accommodated.