IBM's software business contributes $20 billion of IBM's revenue and 40 percent of its profits. Suffice to say, it's an important part of Big Blue's market strategy to ensure that the software division performs at or above expectations every year.
Steve Mills, senior vice president and group executive, joined IBM in 1974 and has helped shape the software business as its grown to more than 50,000 employees, including 25,000 software developers and 15,000 sales and technical support personnel in more than 150 countries. That total includes the products and personnel from the more than 50 companies IBM has acquired since 2000.
Steve Mills, SVP IBM software.
In 2009 alone, IBM acquired no fewer than five companies: Lombardi, a privately held provider of business process management (BPM) software, data discovery software firm Exeros, database security firm Guardium, security provider Ounce Labs, and analytics provider SPSS.
The company also launched a number of cloud-oriented products and services in 2009, including a new lab in Hong Kong, a Cloud Academy program designed to help educators and students pursue cloud-computing initiatives and better take advantage of collaboration technology in their studies; and a number of additions to the LotusLive hosted collaboration service.
In an exclusive interview with CNET News, Mills shared how the company is looking at the technology landscape in 2010 and beyond.
Question: Software strategy is obviously an important part of IBM's business model. How long of a time-to-market horizon does IBM look for with new software products?
Mills: We tend to look at product groupings and product families--customers don't use a single product. Enterprises are looking for complete solutions even if they don't buy them all at one time. That means that we're looking for leverage in software we create or acquire--how do the products complement each other and how can plan ahead for what customers need.
As you probably know, IBM is big on process (laughs). The software business is no different, and we have a method to how we develop markets: customer, volume, revenue, and profit. You have to set the baseline to figure out how the product fits into the marketplace, you learn this from talking to customers. Time to market and rapid iteration are important aspects that come into play in relation to the other components but you always learn more in the market from customers than in the lab.
When we look at how well a piece of software is doing, as well as its potential, we look at volume of customers, industries, installed base, etc., and what's the trajectory of the installation. Growth objectives are unique to each product, and you rise on a series of plateaus. You have to fill the gaps that inhibit the growth. And it's not always obvious. We pay a lot of attention to our customers and also the trends in the market.
How does cloud computing play into your technology focus areas?
Mills: Cloud computing is a transformative part of the Darwinian IT phenomenon. Many companies are not interested in operating their own infrastructure as they don't see it as a competitive advantage. In which case they want to get the job done at a lower cost. Businesses realize they can grow because of IT and they want to continue to use IT to keep things growing, but that doesn't mean they need to own and manage every piece of their infrastructure.
Companies like American Express, Salesforce.com, and ADP are great examples. We see those types of system designs and customer interactivity as common models. IBM has long offered managed business process services and supported other big enterprise services.
These offerings make logical sense, but they don't always solve every problem. The hybrid public/private model is very appealing to our customers and not dramatically different than using a hosting provider.
Not everyone will be comfortable with the cloud model--it's all part of a continuum. There will be Salesforce.com on one hand, and on the other customers that run everything behind the firewall. Success doesn't mean that corporations will push everything into the cloud but the inherent cost-benefits are there and more companies are interested. That's part of the evolution.
How do you look at open-source projects/products/companies?
Mills: The hybrid companies like Red Hat have interesting models for open source. They take all the code and put it together for you, but we tend to look at open source as building blocks for larger solutions. IBM ingests a lot of open-source code and we provide a huge amount of development and engineering expertise to the various projects that we support--like Linux and the Apache server.
We focus a lot of our energy on open standards and platforms. And if there are open source projects that we believe in we'll invest resources to support them.
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(Credit:
eMarketer.com)
Data from a new report shows that the iPhone may finally have a true competitor with Android phone users' profile appearing very much alike that of iPhone users'.
According to eMarketer.com, the marketing intelligence firm comScore found that 37 percent of U.S. mobile users had heard of Android in November 2009, up from 22 percent in August, and "likely due to the Verizon Droid ad campaign." More interestingly, "17 percent of mobile users in the market for a new smartphone in the next three months planned to buy an Android phone compared with 20 percent who would pick up an iPhone."
The report also shows that usage patterns for Android and iPhone owners were very similar in terms of media consumption, Web browser, and application usage, but e-mail usage on Android devices oddly tracked behind that of other platforms. This is likely because of the immaturity of the e-mail application that ships with Android and not a change in use patterns.
This news obviously keeps the iPhone in the dominant position, but shows that other smartphones finally present a real challenge. It's notable because BlackBerry and iPhone users have always seemed worlds apart, whereas Android users seem to be using their devices at parity with the iPhone crowd.
The fact that the Droid runs on Verizon instead of AT&T no doubt helps with data usage, though only time will tell if Verizon can handle the traffic or if T-mobile can handle the pressure of a huge influx of new Google Nexus One phones running Android.
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New data on the top 10 mobile phones puts Apple on top due to the sheer number of iPhone owners. But both Research In Motion and LG actually control more market share because they sell multiple, popular models.
Nielsen's data on the top 10 phones in use in the U.S. from January through October shows Apple with 4 percent market share, RIM with 6.3 percent, and LG with 6.4 percent. But the trio lead a very fragmented market. In fact, the top 10 phones account for just over 20 percent of the total devices in use.
With an estimated 271 million U.S. mobile subscribers at the end of 2008, accounting for about 88 percent of the U.S. population, even 1 percent market share is significant.
RIM BlackBerry devices and LG handsets--voluminous in offering compared with the singular iPhone also have the benefit of longer time on the market and of promotion by the carriers that don't have the iPhone. LG is the No. 3 handset maker behind Nokia and Samsung. RIM and Apple have nowhere the number of models offered by the top three handset makers, yet they enjoy a stronger market share.
The Nielsen data shows both the opportunity and the challenge of creating the next big thing in mobile devices. Just a few years ago, Motorola's Razr was the belle of the ball, and RIM was firmly fixed as an enterprise device. However, the convergence of voice, e-mail, and browsing, as well as new 3G networks, brought the smartphone to the forefront and helped push both RIM and Apple to the top.
All hope is not lost for currently less popular handset makers, as the market can very quickly change dramatically.
Indeed, there is a big challenge under way from Android-based phones such as the Droid that could thrust laggards such as Motorola back into the spotlight, provided that Google doesn't stomp all over the developer community that has been building up around the new mobile operating system.
| Top 10 Mobile Phones in Use (U.S.) - January -October 2009 | ||
| RANK | Device | Embedded Base of All Subscribers |
| 1 | Apple 3G iPhone | 4.0% |
| 2 | RIM BlackBerry 8300 Series (Curve, 8310, 8320, 8330, 8350i) | 3.7% |
| 3 | Motorola Razr V3 series (V3, V3c, V3m, V3i, V3i DG, V3) | 2.3% |
| 4 | LG VX9100 (enV2) | 2.1% |
| 5 | LG Voyager | 1.7% |
| 6 | Samsung SPH-M540 (Rant) | 1.5% |
| 7 | RIM BlackBerry 9530 series (Storm) | 1.4% |
| 8 | LG VX9700 (Dare) | 1.3% |
| 9 | LG Vu series (CU915, CU920) | 1.3% |
| 10 | RIM BlackBerry 8100 series (Pearl, 8110, 8120, 8129) | 1.2% |
| Source: Nielsen | ||
And mobile phones are not just for those on the run. Nielsen's Convergence Audit (PDF), an annual survey on voice, video, and data products, "shows a rise in households who have 'cut the cord' by trading their traditional landlines for wireless cellular services and an increase in mobile media device usage among a diverse set of households."
In the second quarter, the report said, 21 percent of households were using wireless cellular service only--compared with 18 percent a year earlier. "This increase comes from...households who have dropped their landlines as well as from young adults that started new households with just a wireless phone service," the report said.
Odds are that these percentages will continue to climb as young mobile users reach adulthood and as adults look to their mobile devices to do more than just make calls.
With Java investments in the billions over the last dozen years, it's a safe bet that enterprise companies won't be replacing these systems any time soon. In fact, one could claim Java usage is growing in spite of best efforts to claim otherwise by aficionados of Ruby, PHP, Python, Groovy, Scala, and other dynamic languages.
Red Hat for example reports that its JBoss Java middleware is its fastest growing business. IBM remains heavily invested in its WebSphere Java middleware. And let's not forget Oracle, which not only has the Sun brand (and ergo Java) pending but last year added BEA to the fold.
Java application platforms have been so focused on scalability and efficiency of database-driven applications that they've often ignored what's evolved in the consumer Web: rich user environments, better interactivity, and a mixing of content and data, collaboration and social features--all with much more personal control and empowerment. Efforts like JavaFX have been interesting if not ready for prime time.
But Java is hardly irrelevant, and Benjamin Mestrallet, founder and CEO of eXo Platform, thinks he can change exactly the perception that Java can't be Web 2.0 hip. eXo, which just opened its first U.S. office, is hoping to remake Java from stodgy to socially aware by combining powerful REST-based common services with rich Web 2.0 apps to get the most out of so-called legacy Java apps.
eXo counts a number of very smart people with deep Java roots in their court to make this happen including: Bob Bickel, a founder of Bluestone Software, former head of HP Middleware and former JBoss head of strategy; Edwin Khodabakchian, founder of Collaxa and former VP of Product Management at Oracle; and Sacha Labourey, longtime JBoss CTO and former co-GM of Red Hat Middleware.
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This past year we saw consumer brands embrace social-media programs for branding and product promotions in sophisticated ways that most tech companies haven't quite gotten to yet.
Much of the reason behind the tech lag is due to the breadth of the audience, but also because tech buyers have tended toward expressing their opinions to companies without being asked.
Mountain Dew recently unveiled the details of its year-long DEWmocracy 2 program, "an open communications platform that relies on the collective intelligence of loyal consumers to shape the direction of the brand and Mountain Dew innovation pipeline." In layman's terms this means it is looking to go beyond crowdsourcing and incorporate a huge variety of community marketing and branding efforts into a bigger strategy.
DEWmocracy 2 launched in July and is a 12-month, seven-stage campaign that will result in the production of a completely user-generated Mountain Dew beverage. This is not dissimilar to a program Vitaminwater ran on Facebook earlier this year to crowdsource ideas for new flavors. The main difference is that DEWmocracy is a sophisticated, fairly massive endeavor, encompassing online communities like Facebook, video submissions, Twitter, and a variety of ways to vote, allowing users to share their thoughts.
I put forth a number of questions about the program to Brett O'Brien, director of marketing, Mountain Dew, detailed below.
What stage of the program are you currently in?
We completed the advertising challenge, which is the sixth stage of DEWmocracy, on December 13. DEW fans voted for their favorite advertising submissions, choosing six finalists. The finalists will now create short pitch videos for the Flavor Nations, which will each select which ad creator they would like to work within 2010 to create ads that will run on national TV.
Has any one particular tool been most effective in your marketing efforts?
Several tools have been effective, but we're particularly impressed with the consumer response to our call for video submissions on 12seconds.tv. In total, more than 1,000 videos [were] created by consumers and posted on 12seconds.tv and other social-media outlets. That type of response, coupled with the quality of the video submissions, screams a high level of consumer engagement. Consumer video submissions also enabled DEW loyalists to share content with other DEW drinkers and introduce them to the program not through the voice of the brand, but through the enthusiasm of fellow DEW fans.
Research firm Nielsen has released its top advertising trends for 2010. Not surprisingly the leading trend is the ability to measure activity that merges online and offline purchasing behavior, addressing the fact that users have expanded options for how they consume content and how they interact with brands.
Nielsen data shows that "time spent on each of the three screens--TV, PC and mobile--is increasing. In particular, the consumption of video content is on the rise across all platforms."
Top advertising trends for 2010
- Optimizing media convergence is a top priority
- New models emerge to take advantage of smartphones
- More cross-media ad campaigns surface
- Commercialization of social networking hubs increase
- More interesting and interactive online ads appear
The challenge with advertising mediums such as video (TV more so than online) is that they require users to not only be interested in the product but remember it when they are making a purchasing decision. This, of course, is why online advertising has proven to be such a lucrative model. Consumers, in theory, can be served an ad and then perform some kind of action, such as buying a product online.
Nielsen asserts that for consumer packaged goods, "purchasing decisions in 2010 will be affected by factors such as brand innovation, retailer assortment, proliferation of store brands, and healthy eating preferences." With the exception of healthy eating (maybe eco-friendly tech is the comparison?), the technology industry won't be dramatically different.
Large brands like Oracle, Hewlett-Packard, and Microsoft must continue to innovate (brand innovation), more start-ups will join the fray (retailer assortment), companies like Dell will offer more services to support their hardware business (proliferation of store brands) and maybe electric cars become the healthy eating of the tech world.
What remains to be seen is which advertising trends are the most efficient and cost-effective. Social networking has been largely aggregated onto a few major sites such as Facebook and MySpace, while other niche sites garner far less traffic (though potentially more per-user dollars.)
The biggest opportunity is to make people actually like seeing advertising. Despite all of the hype and success around ads, I've yet to meet someone who claims to just love Internet ads. We all accept ads as a part of our lives online, so there is certainly an opportunity for more interesting online ad formats.
Beginning in the first quarter of 2010, social sites IMVU and MyYearbook will launch a virtual currency exchange allowing users from either service to exchange currency between the sites.
Currency Connect is billed as a "cross property virtual currency exchange" system similar to how you would change U.S. dollars into euros if you were traveling in Europe. Users simply swap their currencies depending on what site they are on. Overall this is not a bad idea as I still find it surprising that users pony up real money for virtual money that can never be taken out of a specific site.
But, it does make me wonder when a bigger payments vendor, like PayPal, will get into the game and offer more of a de facto universal virtual. It's all well and good that two large-ish sites have launched this effort, but it can't be long before other social sites like Facebook join the fray. And, ultimately the site or currency with the most users is likely to be the one with the most users.
This opens up an opportunity for other sites with large user bases such as Google and Yahoo to offer a currency program. If users are already joining multiple social-networking sites, there is no doubt that they are also using search engines and instant messaging.
On the technical side, the service uses a simple set of REST APIs that implement the various checks and balances of the system. Security is maintained through tracking methods and server-to-server connections, which will initially limit how many sites can participate in the service. Again, a larger online service might have an easier time deploying a fully distributed, trusted service that didn't require point-to-point connections.
It's clear that virtual currencies have become an important part of social networking and gaming infrastructure. But, sooner or later fickle users will change their allegiances. A currency exchange offers a palatable escape method but still doesn't ever let you turn your virtual currency back into real money.
(Via VentureBeat)
It's no secret that Windows Mobile has hit a rough patch as the iPhone and Android-based smartphones have take center stage. Recent statistics from AdMob shows that Windows Mobile market share of Web surfing was way down during the past 12 months--more than 70 percent year over year.
Any number of people postulate that Windows Mobile will be dead, some say as soon as 2011, unless Microsoft figures out a way to not only make the operating system better but to convince users that they should care.
On the New York Times Bits blog, Steve Lohr wrote earlier Thursday on analyst Mark Anderson's comments suggesting that Microsoft abandon their consumer efforts entirely--that the company has lost the battle for consumers:
Except for gaming, it is 'game over' for Microsoft in the consumer market. It's time to declare Microsoft a loser in phones. Just get out of Dodge.
I'm not a huge fan of Windows Mobile, but Microsoft certainly can't give up on smartphones and really has no alternative but to make a big move in the mobile operating system space. And Windows Mobile is not nearly as bad as many people think--if you don't believe me, check out these results from mobile blog jkOntheRun.
I recently toyed with Windows Mobile phones at both Verizon and AT&T stores and I could absolutely see the appeal of the common desktop functional paradigm if I were a Windows user. But consumers are fickle and don't want to add an OS decision into their buying process. They just want the phone and its applications to work and be easy to use.
There remains a huge opportunity for Microsoft to take its dominant position and make Windows Mobile truly great, even if it means walking away from the status quo. And while that's not typically the Microsoft way, the company has shown with Bing that it can make those kinds of decisions (as well as less-positive choices.)
There are two very simple moves Microsoft could make that would not only shake up the whole market, but also build a path for the future:
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(Credit:
IBM)
IBM is continuing its investment in cloud computing with a new lab in Hong Kong, expanding the presence of its IBM China Development Laboratory (CDL), the company's largest with more than 5,000 developers on staff.
The laboratory builds on the e-mail technology of Outblaze Limited, a Hong Kong-based company whose messaging assets were acquired by IBM earlier this year and incorporated into the Lotus brand. The new lab claims to be the first of its kind in Hong Kong and shows both the importance of global development teams and IBM's focus on growth in emerging markets, a user segment that is theoretically more adaptable to different methods of application consumption and likely well-acquainted with browser-based applications.
Overall, the fourth quarter of 2009 has seen several interesting cloud-related announcements from IBM, including the LotusLive service that launched in October and already claims more than 18 million active users. Big Blue also launched the Cloud Academy program designed to help educators and students pursue cloud-computing initiatives and better take advantage of collaboration technology in their studies.
IBM has taken a leading role in the development and adoption of cloud services while other large vendors such as SAP, HP, Oracle, Sun and Microsoft have all made cloud-oriented announcements with few proof points that their efforts will be successful. There is no certainty that IBM will be successful either, but the company has at least made consistent progress in both technology and user adoption.
IBM representatives told me that the company will continue to focus on delivering "the most reliable and secure cloud services" architected to meet the needs of consumers as well as their mainstay enterprise buying audience. Totally logical, and still surprising that the other big vendors haven't figured out how to attract their core user base to cloud platforms and services.
The cloud remains a bit of an anomaly in the tech world, dominated by Amazon, an e-commerce site, while stalwart IT vendors like Microsoft continue to take baby steps toward mainstreaming their efforts.
My blogging colleague, James Urquhart, wrote this week about Microsoft's new business unit that merges its cloud and on-premise server group into one development team, which makes sense, at least in theory.
Practically speaking, Microsoft is way behind the curve and has a lot of ground to make. I've written in the past that the opportunity is theirs to lose, and it's hard to see how they plan to win, even with this new structure.
One of the headlines that caught my eye today is this blog post from the Amazon Web Services team about a new Memcached as a service offering from Gear6.
(Credit:
Memcached)
Similarly, Gear6 has added features such as replication, clustering, optimized memory utilization and management to create what it calls a Memcached distribution, much in the same manner as Linux distributions are packaged. Joaquin Ruiz, executive vice president of products at Gear6, provided me with additional insight into why Memcached is popular with Web 2.0 sites and why it matters for cloud computing.
The problem, according to Ruiz, is dynamic data services. In a recent blog post, he pointed to the tight connection between dynamic content and Web 2.0; that is, one defines the other. In this Web 2.0 world, the LAMP (and to some extent Java and Ruby) stack "provided a low-cost, efficient development foundation for Web 2.0 but did not free us from the monolithic, vertically oriented, "scale-up" platforms. Memcached provided the heavy lifting in terms of horizontally scaling ("scale-out") on non-monolithic SMP server architectures from Intel and AMD."
In the Facebook example, the Memcached tier stores members' personalized dynamic content, such as status updates, wall posts, etc., so that they can be quickly accessed when queried. It's a similar set up for Twitter tweets or comments on photos on Flickr. While latency in a social application is mildly annoying, latency in a transactional application could mean lost revenue.
Dynamic data services will likely remain an important part of cloud services, which brings us back to the idea of a Memcached service on a cloud platform. Amazon's Jeff Barr noted, "powerful, high-level services like this allow application developers to spend more time focusing on the novel and value-added aspects of their application and less time on the underlying infrastructure."
Anything that developers and companies can take advantage of to serve data faster and more efficiently means they have time to do other things, including increasing their bottom line.
