IBM Software - Providing the drive for Services Automation

As I attend the IBM AR event here in , it has become increasingly clear through the IBM push to virtualization, is that the software group is clearly the core of IBM moving forward.  It has been tagged to provided 50% of profit by 2010. STG and Services will of course continue, but the software acquisitions, whether coming out of software or the services group, is the key for IBM moving forward. The services group has been phenomenal in hiring 100,000 people a year, but even by opening more and more emerging and mature market locations, it will still hit labor shortages in key markets and skill sets moving forward. Therefore the push towards automation that is being enabled by the software group for both infrastructure and process will ensure that they are able to remove substantially the people element, by developing their own IBM integrated solutions.

The secret for IBM is what this does from a competitive point of view. HP can in certain areas match this strategy, and in infrastructure have matched it, and will have a leadership role with IBM. In the process and application side of the marketplace it is a little harder for the competition. If Infosys (or any  of the Indian players) were to triple revenues, to say US$8-9B, it would mean  that their workforce would number about 200,000 without significant steps to automation a HR and process issue with limited parallel given the revenues. The issue for them is that they do not have the tools to enable that jump to automation, and will have to partner, unless they rapidly acquire software firms. Perhaps even more interestingly is that I believe that Accenture is going to have to radically challenge its strategy, they will soon miss the mark or rely overwhelmingly on partners to provide such automation services. This is going to be a big challenge for them as the fight for partnerships continues across the industry, and the lack of differentiation that strikes many partnerships.

Bottom line, if you have a virtualization/consolidation or automation software product expect plenty of attention from vendors in the very near future.

31. August 2007 11:38 by Phil | Comments (0) | Permalink

The Accounting firms are back as consulting firms

We have seen an increase in the role and size of the traditional Big 4 accounting firms undertaking IT Services. The 21st century  model is a lot different to the previous incarnation that produced in effect Accenture and IBM's GBS practice. Only Deloitte maintained their consulting practice in the integrated model. To be fair in Asia they have really not had much success or visibility now for several years.

However we have noted the second coming, particularly of KPMG and PWC. What makes KPMG unique is that the push has come not from New York, but from where the IT consulting group sits. The difference in the second generation model is that they have no interest in implementation of a solution, be it a security solution or ERP, but to help guide and drive the executive level strategy. This of course has both positive and negative perceptions in the market, it provides vendor neutrality, but by contrast some enterprises want their firm of choice to engage the solution from consult, through design, build, deploy and run.

They will have an impact on HP, IBM, Accenture and others in the way in which they take a bit of the first engagement and identity assessment out of the hands of the traditional services providers. This door opening will clearly reduce the opportunity for the big services providers to craft solutions on their terms.

How big a threat are these players, in general, they are more of an "annoyance" almost for the major services providers at this stage, but with strong hiring and growth plans, it is clear that they will increase their influence. Will PwC consulting ever grow large enough that HP will be willing to pay US$18Billion for them, perhaps not, but the remaining Big 4, will be in a position to guide IT strategy moving forward at an even greater rate then now.

31. August 2007 06:48 by Phil | Comments (0) | Permalink

Thailand IT - when will it recover

The Thai economy and people have been subject over the years to a range of shocks, both internal and external. Last years coup to remove Thaksin from the Prime Minister's job, pushed by the Thai Royal Family, was another shock to the system. Whilst elections have been set for December 23rd, it is by no means a fact that this will put an end to the uncertainty. If the elections provide a pro Thaksin government, on form you would expect the military to either stop this from happening in one way or another, or perhaps enact another coup afterwards continuing the destabilization.

In speaking with a range of key players in the Thai markets, Springboard Research believes that the growth for IT Services in for 2007 and at last the first half of 2008 will be severely muted. Whilst some others have increased their forecast for the market substantially, we cannot at all see these levels of growth. The multinational IT firms are generally well managed and respected in , with HP seemingly having good product growth, but for services the sentiment is not that strong.

Bottom line any investment in needs to be carefully risk managed and considered in the current economic and political environment

31. August 2007 06:35 by Phil | Comments (0) | Permalink

IBM - A mirror for a changing world

I am in Singapore, enroute to Ho Chi Minh city for the IBM AP Analyst briefing for 2007. It is staggering to see how quickly the world has changed in recent times. Just from a pure IBM perspective

Asia Pacific headquarters are effectively Shanghai now

Their CEO summit was in St Petersburg, or Leningrad as we once knew it

AP Analysts meeting is in Vietnam

A generation ago having such events in these countries would have been unthinkable, and in some cases even 10 years ago it would not be considered.

Now a Russian owns the Chelsea football club, the Chinese are the emerging consumer electronics providers, and Vietnam is awakening from its histoy to play a substantial role

What next, perhaps in less than a generation, the CEO summit will be in Iraq, the analyst briefing in Tehran, and an AP HQ for IBM in Pyongyang. Time will tell, I am not sure about North Korea, but the world can change so quickly

27. August 2007 19:04 by Phil | Comments (0) | Permalink

Apologes - Computer issues kept me away for a few days

Due to a computer issue, I was kept away from the blog,
27. August 2007 19:03 by Phil | Comments (0) | Permalink


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