IBM Makes Big Analytic Play

Does IBM's new business analytic services offering address a pressing market need or is it a technology and services solution in search of a market?

Announcements at IBM Corp. frequently have a services-centric twist. After all, Big Blue derives more than half of its revenue from services-based offerings, so it should have come as no surprise when the company announced a new BI-focused services component last week.

Does Business Analytics and Optimization (BAO) services address a pressing market need or is it a technology and services solution in search of a market?

Not surprisingly, IBM officials make a strenuous case for pressing market need. Most if not all Global 2000 shops have BI or DW practices of some kind, notes Steve Lavalle, global head of strategy for IBM BAO. What's more, Lavalle concedes, many are extracting usable, repeatable, or even salable insight from their BI and DW investments. However, few, if any, approach BI and DW from the totalizing, top-down perspective urged by IBM with BAO.

"A lot of companies have analytics projects under way in some form or another that are giving them insight and helping them recognize that analytics is a powerful tool in their business," he acknowledges, "but if you look at the organizations that are outperforming their peers relative to those that are underperforming their peers, the outperformers have a much higher instance of doing business analytics optimization at the enterprise level. It's higher than 8 to 1," says Lavalle, citing IBM's own market research data. "That's in addition to all of the focus on the functional levels. As we get more of the stories out of what overperformers are doing that underperformers aren't doing in terms of the kinds of results they're generating, we'll see more adoption."

For example, Lavalle notes, "overperforming" shops demonstrate a totalizing, top-down commitment to improving information access. This means not simply connecting users with as many data sources as possible -- i.e., the shotgun approach to data integration (DI) -- but doing the research, testing, and validation to ensure timely access to resources (with topically appropriate refresh windows) as well as the accuracy, intelligibility, and standardization of data.

"If you look at the priorities that have been set by underperformers versus overperformers, you'll see on the overperformer category, almost across the board, they recognize the benefits of improving [the quality of] their information, whereas the underperfomers don't see that kind of benefit out there, or haven't focused as much on delivering it," Lavalle comments.

Conveniently, Lavalle's formulation plays to IBM's strengths: not only does Big Blue market creditable ETL, data federation, data quality, and data profiling technologies -- which it serves up as part of its Information Server platform -- but it develops a huge catalogue of information middleware plumbing, too. It also sets up a potential straw man of sorts. After all, how many shops actually pursue a largely shotgun approach to DI? (Quite a few, according to many industry watchers.)

Lavalle maintains that there isn't an explicitly self-serving dimension to IBM's BAO pitch. True, Big Blue has a stake in the integration middleware game, but it likewise has stakes in the database (a category that some inside IBM continue to define as middleware), analytic software, hardware, storage, and even networking segments. Services providers such IBM Global Services have to be vendor-agnostic, Lavalle argues, or they wouldn't be in business.

More to the point, he says, technology and services are only a part of BAO's value proposition. "Not every organization has operationalized those insights to change the ways that people extract meaning. A big part of what we're going to do as part of BAO isn't just to come up with richer and deeper insights but to help companies to adopt, embrace, and operationalize those [insights] by changing the way that [users] do their jobs, the tools that they have to do their jobs, the decision-making tools that they have. This is in large part about changing companies in addition to the tools," Lavalle points out.

What IBM is aiming at with BAO is a "substantial shift" in the way that companies not only implement BI and DW but consume it as well.

"For enterprises, for our clients, what we're really talking about is a fairly substantial shift in terms of how they run their businesses. They aren't going to say, 'We've done BAO, now it's time to move on.' This is as substantial a change in how companies run as the introduction of CRM and ERP was 15 ago," Lavalle concludes. "We expect all of the serious players to be introducing a BAO-like service offering. We're ready for that. We're ready for the competition."

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