ANALYSIS

IBM’s Big Bet on Cloud Analytics

A growing number of established and emerging software and technology vendors areseeking to take advantage of the convergence of Big Data and the cloud. None has madea bigger bet than IBM.

Since 2005, IBM has spent more than US$16 billion on 35 acquisitions to boostits analytics capabilities. The company is hoping that this investment will generateapproximately $20 billion in annual sales analyzing business data by 2015 — a $4 billionjump from its current level.

The company isn’t being coy about its goals. IBM’s new chief executive officer, GinniRometty, publicly announced them to investors and customers last week. Its original goal in 2010 was approximately $10 billion. Last year, IBM’s business-analyticsrevenue grew 13 percent, offsetting the relatively modest revenue growth of othersegments of its business.

Wrangling Big Data

You can’t turn on the TV without seeing an IBM advertisement promoting its SmartPlanet marketing program and showcasing its growing army of data analytics specialists.

The timing of IBM’s corporate campaign is perfect. The Big Data challenge is a keyconcern among executives seeking to get closer to their customers in an era whencompetition is escalating across nearly every industry.

As a consequence, CMOs areseeking to capture more customer data to better target their products and services, and theyare expected to spend more than CIOs on software during the coming years, according toGartner.

Business unit managers and corporate end-users are also hungry for data that can helpthem do their jobs better. They want that data at their fingertips via their mobile devicesin easier-to-use applications, so they can act on the data without having to waste a lot oftime analyzing it.

A new generation of cloud-based analytics tools and services are beginning to fulfillthese needs, where the previous generation of business intelligence applications fellshort. The new tools are easier to deploy, but they still need to be properly configured andsuccessfully integrated into existing systems and a widening array of data sources to beeffectively utilized.

Analytics All the Way

IBM wants to help its customers determine their analytics requirements andintegrate their solutions into their ongoing operations to meet their needs.

Even IBM’s CIO, Jeanette Horan, is getting into the act. When asked in an interview a year ago what would be the next big thing for IT industry, Horan responded, “the pervasive use of business analytics to leverage big data.”

She used analytics extensively to help IBM undergo a company-wide business transformationprogram, which included re-engineering its business processes in conjunction with IBM’sGlobal Business Services team. Now she’s helping to sell IBM’s customers on the sameideas and showing them how they can also leverage analytics to achieve their objectives.

Lou Gerstner helped transform IBM from a technology-driven company to a services-oriented provider. Sam Palmisano led the company’s shift from hardware to software.Ginni Rometty is hoping to make her mark by turning IBM into the leading provider ofbusiness analytics solutions that enable IBM’s customers to succeed.

Jeffrey M. Kaplan

Jeff Kaplan is the managing director of THINKstrategies, founder of the Cloud Computing Showplace, and and host ofthe Cloud Innovators Summit conference series. He can be reached at jkaplan@thinkstrategies.com.

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