Next-Generation Services Create New Sources Of Competitive Advantage

Fred Giron

Companies understand the urgency of ramping up their business technology (BT) capabilities to help the business innovate and grow. Increasingly, they realize that they cannot do this alone and firms will require partners that can help deliver agile services that bring fast and predictable outcomes to the business. For instance, Bharat Light and Power (BLP), one of the largest clean energy generation companies in India, signed in late 2013, a 10-year engagement with IBM to build a new business capability that aims at nothing short of transforming the utility sector in India. In a few words (more details are available in this report), BLP and IBM are creating an open energy service platform that will help BLP understand how to optimize the utilization of its wind turbines. The really interesting part for me lies in the way the company intends to leverage the information generated by this platform as the basis of its competitive advantage. The energy service platform will indeed act as an expertise repository that BLP can leverage to:

  • Increase the value of its own assets. As the company operates, grows, and optimizes its own asset efficiency, it learns how the climate, power grid, and wind turbines influence a vital business metric for a utility company: the plant load factor (PLF). This will allow the company to generate more revenues from its existing assets.
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Apple Shores Up Its Enterprise Position In Asia With IBM Partnership

Tim Sheedy

You’ve probably already seen the announcement of the partnership between IBM and Apple; Forrester clients can read more about it here, along with our deeper analysis.

While I can’t comment on the trends in North America and Europe, I know that there are some interesting dynamics in the enterprise mobility space in Asia Pacific at the moment. The penetration of technologies like BYOD, customer mobility, and employee-facing mobile apps has been relatively low in many Asian countries, putting the region’s companies behind their North American peers for the most part. I still speak with CIOs and marketing leaders about why they should have a mobility strategy or how they can help their employees stay productive regardless of location.

Don’t get me wrong: There are a lot of smartphones and tablets — particularly iPads — in businesses across the region. But many of these devices, especially the tablets, were personally acquired by employees — so they’re an “accessory tool,” not a core productivity tool; often, corporate tech management doesn’t support them and app-dev teams don’t develop for them.

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IBM’s Cloud Platform Strategy Is Getting Legitimate

James Staten

After a slow and somewhat disjointed start, it looks like IBM is starting to build some serious momentum in the Public Cloud Platform game. 

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Artificial Intelligence Needs More Than A Name, It Needs Personality

Michele Goetz

IBM's acquisition of Cognea, a startup that creates virtual assistants of multiple personalities, further reinforces that voice is not enough for artificial intelligence.  You need personality.

I for one cheer IBM's investment, because to be honest, IBM Watson's Jeopardy voice was a bit creepy.  What has made Apple's Siri intriguing and personable, even if not always an effective capability, is the sultry sound of her voice and at times the hilarity of Siri's responses.  However, if you were like me and changed from the female to male voice because you were curious, the personality of male Siri was disturbing (the first time I heard it I jumped).  Personality is what you relate to. 

The impression of intelligence is a factor of what is said and how it is delivered.  Think about how accents influence our perception of people.  It is why news media personalities work hard to refine and master a Mid-west accent.  And, how one presents themselves in professional situations says a lot about whether you can trust their judgment.  As much as I love my home town of Boston, our native accent and sometimes cold personalities have much to be desired by the rest of the country.  And we have Harvard and MIT!  Oh so smart maybe, but some feel we are not always easy to connect with. 

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HP Hooks Up With Foxcon for Volume Servers

Richard Fichera

Yesterday HP announced that it will be entering into a “non-equity joint venture” (think big strategic contract of some kind with a lot of details still in flight) to address the large-scale web services providers. Under the agreement, Foxcon will design and manufacture and HP will be the primary sales channel for new servers targeted at hyper scale web service providers. The new servers will be branded HP but will not be part of the current ProLiant line of enterprise servers, and HP will deliver additional services along with hardware sales.

Why?

The motivation is simple underneath all the rhetoric. HP has been hard-pressed to make decent margins selling high-volume low-cost and no-frills servers to web service providers, and has been increasingly pressured by low-cost providers. Add to that the issue of customization, which these high-volume customers can easily get from smaller and more agile Asian ODMs and you have a strategic problem. Having worked at HP for four years I can testify to the fact that HP, a company maniacal about quality but encumbered with an effective but rigid set of processes around bringing new products to market, has difficulty rapidly turning around a custom design, and has a cost structure that makes it difficult to profitably compete for deals with margins that are probably in the mid-teens.

Enter the Hon Hai Precision Industry Co, more commonly known as Foxcon. A longtime HP partner and widely acknowledged as one of the most efficient and agile manufacturing companies in the world, Foxcon brings to the table the complementary strengths to match HP – agile design, tightly integrated with its manufacturing capabilities.

Who does what?

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IBM Announces Next Generation POWER Systems – Big Win for AIX Users, New Option for Linux

Richard Fichera

On April 23, IBM rolled out the long-awaited POWER8 CPU, the successor to POWER7+, and given the extensive pre-announcement speculation, the hardware itself was no big surprise (the details are fascinating, but not suitable for this venue), offering an estimated  30 - 50% improvement in application performance over the latest POWER7+, with potential for order of magnitude improvements with selected big data and analytics workloads. While the technology is interesting, we are pretty numb to the “bigger, better, faster” messaging that inevitably accompanies new hardware announcements, and the real impact of this announcement lies in its utility for current AIX users and IBM’s increased focus on Linux and its support of the OpenPOWER initiative.

Technology

OK, so we’re numb, but it’s still interesting. POWER8 is an entirely new processor generation implemented in 22 nm CMOS (the same geometry as Intel’s high-end CPUs). The processor features up to 12 cores, each with up to 8 threads, and a focus on not only throughput but high performance per thread and per core for low-thread-count applications. Added to the mix is up to 1 TB of memory per socket, massive PCIe 3 I/O connectivity and Coherent Accelerator Processor Interface (CAPI), IBM’s technology to deliver memory-controller-based access for accelerators and flash memory in POWER systems. CAPI figures prominently in IBM’s positioning of POWER as the ultimate analytics engine, with the announcement profiling the performance of a configuration using 40 TB of CAPI-attached flash for huge in-memory analytics at a fraction of the cost of a non-CAPI configuration.[i]

A Slam-dunk for AIX users and a new play for Linux

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Now Some IBM Customers Might Be Able To Take Advantage Of Cheaper Third-Party Software Support

Mark Bartrick

Chief information officers (CIOs) are dedicating more of their budgets to what we call “systems of engagement” (technologies that help win, serve, and retain customers) rather than “systems of record” (back-office technologies). According to research here at Forrester, new business investment in the former will be eight times that of the latter in 2014. All of which means CIOs are re-examining their back-office legacy spend to see what savings can be made to fund new front-office innovations.

But releasing back-office spend is not easy. For many companies, most of the ‘easy’ savings have already been achieved - so squeezing even more savings has become a tougher game. For example, you can only try to re-negotiate legacy support costs a few times before the vendors say ‘enough is enough’. While such comments may have discouraged negotiators in past, the advent of third party software support in the last five years has, for Oracle and SAP users at least, kicked the cost savings door back open and given fresh impetus to procurement people seeking to reduce software support costs.

I am sure that many of you have read some of my previous comments on the emergence of the third party software support market over the past number of years. Companies like Rimini Street, Spinnaker Support and Alui have saved some Oracle and SAP clients a lot of money. For companies who have moved to third party support, or who have simply used the threat of moving to third party support in order to drive the vendor’s costs lower, the savings they are enjoying have freed up cash to spend on new innovations and front-office client engaging stuff.

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Bharti Airtel Finally Says “Yes” To IBM — But With Caveats

Manish Bahl

All the speculations on whether IBM will get a renewal of its landmark contract with Bharti Airtel, largest telecom operator in India, have finally come to an end. Yesterday, IBM announced that Bharti Airtel has extended the agreement to manage latter’s infrastructure and application services over the next five years. The key highlights:

  • Although the deal value was not disclosed, Forrester estimates it at between $600 million and $700 million spread across five years.
  • The tenure of the contract has been reduced from 10 years to five.
  • Bharti Airtel plans to build in-house tech capabilities and expand its partner ecosystem as part of its new IT vision.
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Cisco UCS at Five Years – Successful Disruption and a New Status-Quo

Richard Fichera

March Madness – Five Years Ago

It was five years ago, March 2009, when Cisco formally announced  “Project California,” its (possibly intentionally) worst-kept secret, as Cisco Unified Computing System. At the time, I was working at Hewlett Packard, and our collective feelings as we realized that Cisco really did intend to challenge us in the server market were a mixed bag. Some of us were amused at their presumption, others were concerned that there might be something there, since we had odd bits and pieces of intelligence about the former Nuova, the Cisco spin-out/spin-in that developed UCS. Most of us were convinced that they would have trouble running a server business at margins we knew would be substantially lower than their margins in their core switch business. Sitting on top of our shiny, still relatively new HP c-Class BladeSystem, which had overtaken IBM’s BladeCenter as the leading blade product, we were collectively unconcerned, as well as puzzled about Cisco’s decision to upset a nice stable arrangement where IBM, HP and Dell sold possibly a Billion dollars’ worth of Cisco gear between them.

Fast Forward

Five years later, HP is still number one in blade server units and revenue, but Cisco appears to be now number two in blades, and closing in on number three world-wide in server sales as well. The numbers are impressive:

·         32,000 net new customers in five years, with 14,000 repeat customers

·         Claimed $2 Billion+ annual run-rate

·         Order growth rate claimed in “mid-30s” range, probably about three times the growth rate of any competing product line.

Lessons Learned

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Intel Bumps up High-End Servers with New Xeon E7 V2 - A Long Awaited and Timely Leap

Richard Fichera

The long draught at the high-end

It’s been a long wait, about four years if memory serves me well, since Intel introduced the Xeon E7, a high-end server CPU targeted at the highest performance per-socket x86, from high-end two socket servers to 8-socket servers with tons of memory and lots of I/O. In the ensuing four years (an eternity in a world where annual product cycles are considered the norm), subsequent generations of lesser Xeons, most recently culminating in the latest generation 22 nm Xeon E5 V2 Ivy Bridge server CPUs, have somewhat diluted the value proposition of the original E7.

So what is the poor high-end server user with really demanding single-image workloads to do? The answer was to wait for the Xeon E7 V2, and at first glance, it appears that the wait was worth it. High-end CPUs take longer to develop than lower-end products, and in my opinion Intel made the right decision to skip the previous generation 22nm Sandy Bridge architecture and go to Ivy Bridge, it’s architectural successor in the Intel “Tick-Tock” cycle of new process, then new architecture.

What was announced?

The announcement was the formal unveiling of the Xeon E7 V2 CPU, available in multiple performance bins with anywhere from 8 to 15 cores per socket. Critical specifications include:

  • Up to 15 cores per socket
  • 24 DIMM slots, allowing up to 1.5 TB of memory with 64 GB DIMMs
  • Approximately 4X I/O bandwidth improvement
  • New RAS features, including low-level memory controller modes optimized for either high-availability or performance mode (BIOS option), enhanced error recovery and soft-error reporting
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