IBM Raises Its Cloud Services IQ with New Smart Business Solutions

| Jun 16, 2009 | Managed IT Services | Competitive Intelligence Report

| Analyst: Amy Larsen DeCarlo

Current Perspective: Positive
Vendor Importance: Moderate
Market Impact: High

Event Summary

June 16, 2009 -- IBM introduced a set if of commercial “cloud” services and integrated products for the enterprise this week that aims to give clients a way to standardize IT functions that are rapidly becoming too costly or difficult to use. The IBM Smart Business cloud portfolio is meant to help clients turn complex business processes into simple services. To accomplish this, Smart Business brings automation technology and self-service to specific digital tasks as diverse as software development and testing, desktop and device management, and collaboration. The IBM Smart Business portfolio includes three “on-ramps,” or ways to quickly deploy the cloud model:

• IBM Smart Business standardized services on the IBM Cloud;

• Smart Business private cloud services behind the firewall built by IBM (run by IBM or the client);

• and IBM CloudBurst workload optimized systems, for clients who want to build to their own cloud with pre-integrated hardware and software.

Analytical Summary

• Current Perspective: Positive on IBM’s new launch into the cloud with its Smart Business portfolio, because the new solution set, which initially focuses on enabling development and test environments as well as virtualized desktops, brings a comprehensive set of technologies and services that are required to support the effective deployment and management of elastic Internet-based IT services that are an integral “as-a-service” delivery.

• Vendor Importance: Moderate to IBM, because the Smart Business solutions represent a maturation of the company’s existing cloud services solutions, providing the service management capabilities, dynamic provisioning, and cost-effective solution required to meet dynamic customer resource requirements and the need for a cost-effective alternative to conventional technology delivery models.

• Market Impact: High on the managed data center services segment, because IBM, which has the kind of market credibility that gives the company immediate widespread appeal, has pulled together the kind of enabling services to bolster customers’ private, public, and hybrid cloud initiatives around testing and virtualized desktops. These are likely to appeal to large enterprises that have hesitated to jump into on-demand IT service delivery. This will have a ripple effect, attracting both large companies and their smaller counterparts to cloud computing and helping the market grow across the board to capitalize on this increased demand.

Recommended Competitor Actions

• All competitors in the cloud services space need to prepare their sales teams to provide a focused response to IBM’s Smart Business services launch with information about their own overarching strategies in the on-demand services space, as well as the distinct benefits of their existing portfolios. Providers that are not currently offering solutions in areas such as cloud-based application testing and deployment services should look at how their existing packages could be tailored to support this kind of a capability without requiring an extensive overhaul. Rival providers that have not yet considered moving into the delivery of virtualized desktop services should also examine whether that might be a model that could play on their existing strengths.

• Telecom providers such as AT&T, BT, Orange Business Services, and Verizon Business need to be aggressive in promoting the advantage that operating complex and far-reaching network infrastructures provides them in ensuring stable, cost-effective, and secure delivery of elastic IT services.

• Independent integrators such as CSC need to emphasize their vendor-neutrality and extensive application integration expertise as supplying them with the resources necessary to craft best-of-breed solutions that are tailored to meet their customers’ specific requirements.

Recommended Competitor Actions

• Current and prospective IBM customers that are on skeptical about whether cloud services might benefit their organizations should take a closer look at what the company is providing, particularly in support of the creation of more cost-effective application development and test environments. These organizations may find a cloud solution is not only simpler to implement, but it can also offer up some significant cost savings in short order.

• Businesses looking at cloud-based desktop virtualization services need to scope out solutions from IBM and its competitors. Companies should look at what rivals may be able to provide now or in the near-term, as this is one area where a number of other new solutions will be coming to market soon.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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