February 16, 2006 9:04 AM PST
IBM to invest in 'info-on-demand' services
At a press conference, company executives detailed new consulting services tailored to complex information-management problems. They also introduced a software package that bundles several of IBM's existing data-management tools. The company said its global services arm will dedicate 15,000 consultants to this area and hire an additional 9,750 people.
IBM said the products stem from about 500 customer deals in which IBM software and services were used to address thorny information-management problems.
For example, the company worked with Maersk Logistics to embed wireless sensors into shipping containers, allowing logistics companies to get a snapshot of their cargo in real time from any Internet-connected location. In another case, IBM built a system for New York City to help police officers zero in on suspects by searching several data sources from the scene of a crime.
These applications have become possible in the last couple years because of advances in information-management software and beefier hardware, IBM executives said. IBM's software group has purchased several companies over the past five years to build up its information-management portfolio, including Ascential, Trigo, SRD Software, iPhrase and Venetica.
"In the last five years, we accumulated the stuff that we needed to do this," said Steve Mills, senior vice president of IBM Software group. "We knew that the big issue in business would be how to address the use of information to transform businesses."
Mills said the bulk of the $1 billion investment will be used to apply IBM's software to specific business situations, rather than to develop the base information-management technology.
Executives said IBM is increasingly looking to sell its hardware and software products in conjunction with professional services.
"We're putting a bet where we think that our customers' spending on solutions will be--two (times) what they would spend on point products," said Ginny Rometty, senior vice president, IBM Enterprise Transformation Services.
IBM's services arm has already developed six "solutions," which are a combination of software and consulting practices to address different business situations. For example, IBM has developed one data analysis solution to help spot cases of fraud and one to comply with regulations, such as handling patient information in the health care industry.
In the second quarter of this year, IBM will introduce a product called WebSphere Information Server, which will package a number of different components for managing information.
The bundle will include capabilities for querying multiple data sources at once and analyzing information. Customers will be offered options for managing specific types of information, such as customer records, products or identities, said Ambuj Goyal, general manager of IBM's information-management group.
A panel of customers who spoke at the press conference said advances in technology, such as querying across disparate databases, have allowed them to lower costs and introduce products faster.
For example, electronics manufacturer Panasonic has created a single instance of product information, which is shared across its divisions worldwide, said Robert Schwartz, chief information officer of Panasonic USA. That initiative allowed those products to be launched in less than a month, rather than five or six months, he said.
"That reduces costs because we avoid replication of that information...and that drives efficiencies," Schwartz said. "Without it, we can't do the types of (product) launches we want to do."
Other panelists said significant challenges to large-scale information-management projects exist in establishing rules, or "governance," over how information is shared among corporate divisions and how it can be used.
"Technology becomes less of an issue going forward. It's the orchestration of the components and the governance that is the biggest challenge," said Joe Monk, CIO for retail bank and channel technology at Wachovia Bank.
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