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IBM's Big Bet on Cloud Analytics

By Jeffrey M. Kaplan
Mar 8, 2013 5:00 AM PT

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

IBM's Big Bet on Cloud Analytics

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

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

Wrangling Big Data

You can't turn on the TV without seeing an IBM advertisement promoting its Smart Planet 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 key concern among executives seeking to get closer to their customers in an era when competition is escalating across nearly every industry.

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

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

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

Analytics All the Way

IBM wants to help its customers determine their analytics requirements and integrate 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 transformation program, which included re-engineering its business processes in conjunction with IBM's Global Business Services team. Now she's helping to sell IBM's customers on the same ideas 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 of business analytics solutions that enable IBM's customers to succeed.

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

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