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  • Getting Dizzy from Dynamic Infrastructure

    March 9, 2009 Timothy Prickett Morgan

    When the economy went into recession in December 2007, and maybe even before, the top research and marketing minds at IBM were already hard at work on a new, big sales pitch that just so happens to coincide with the kinds of economic stimulus and long-term investments that the Obama Administration here in the United States and leaders in other governments want to make. What they want, of course, is a new and potentially much larger wave of automation, which has implications for our lives as well as our data centers.

    IBM’s top brass, starting with president, chief executive officer, and chairman Sam Palmisano, have been publicly talking about a strategy called Smart World for several months, and the marketing teams on the systems and software sides of Big Blue have been talking about something else called Dynamic Infrastructure. Depending on how you want to look at it, these are either synonyms, or one is the foundation for the other. Your Dynamic Infrastructure to make a Smart World, it would seem.

    Here’s the idea. Over here in the data center, we have this tangle of wires, blinking lights, whirring fans, and electronic gizmos we call IT infrastructure. And out there in the physical world, we have those old-fashioned kinds of infrastructure: roads, bridges, trains, planes, automobiles, buildings and homes, electricity grids, natural gas pipelines, and so on. These are relatively dumb devices, by IBM’s reckoning, and they need to have some electronic IQ slapped on them to instrument the physical infrastructure so we can tell how it is performing, fix it when it is broken, and otherwise regulate its performance–and to do so in as automatic way possible and in a fashion that lowers energy usage and increases the efficiency of how this infrastructure operates.

    To put it in plain American, we want to do for all the things we build to distribute power, products, and people what we did to bookkeeping: automate the living daylights out of it. And, if I read my IBM brochureware right, there is a hell of a lot of money at stake in doing this.

    You can read up on the Dynamic Infrastructure strategy starting here on IBM’s PartnerWorld site. The important bit of data, as far as I am concerned, is the size of the addressable market for this collective way of looking at automating physical infrastructure. As you can see on this page in the IBM presentation, this is a much bigger fish that IBM is trying to fry with the help of its business partners.

    Best I can figure, the whole One Demand strategy that IBM cooked up a few years back morphed into something called the New Enterprise Data Center strategy–which was a new one to me, and probably short-lived since it has already been usurped by Dynamic Infrastructure. By IBM’s own internal estimates, the addressable market for Dynamic Infrastructure is $122 billion globally (based on estimates in an internal report from last year) compared to the New Enterprise Data Center strategy, which it pegged at a mere $77 billion opportunity. And here’s the important part: the addressable market is larger because IBM is looking to do both IT transformation and business operation (or government) transformation. I think it is also larger because IBM has expanded the scope from large enterprises and governments to include mid-market businesses as well.

    The gist from IBM about Dynamic Infrastructure is practical even if it is a bit cynical. In the presentations I have been able to get my hands on, IBM is telling partners that they should use the Dynamic Infrastructure effort as a “new reason to call” on customers and as a “door opener.” And IBM is telling them that if they play the strategy correctly, they have the prospect of “higher value, higher margin sales.” The basic thrust of the sales pitch is to reduce costs, manage risks, and improve service at companies, using IT as a lever to accomplish this. Strategic outsourcing, cloud computing, and mid-market specific offerings will eventually play a role, apparently, but how has not been made clear yet.

    Whenever I hear about a big strategy like this, one of the first things I do is look at what IBM is not saying. The company is not saying that it intends to grow its market share in servers, storage, software, or IT services. It is not saying that it intends to take business away from Hewlett-Packard, Microsoft, or other IT players. I find this a bit disturbing because IBM’s PartnerWorld reseller channel gets paid to push product, not strategies.

    IBM is no fool, of course. It will need partners that have the skills to pitch and deliver consolidated and virtualized servers, storage, and networks, because IT shops are demanding that IT operations do more for less in this economic climate. And the desire to save energy in data centers has not gone away, any more than has the need for reliable, flexible infrastructure. If I read my IBM numbers right, the non-IT part of Dynamic Infrastructure should have an addressable market of about $45 billion. And guess what? Business partners cannot and will not be able to play there. But guess who can? Big Blue, with a whole new set of skills it has undoubtedly been building and new partners it will chase to create smart electric grids, smart transportation systems, and so on. And if I understand IBM’s motives correctly, it is trying to position itself with governments and businesses around the world as the technology partner that you can trust to instrument and automate your physical infrastructure because of the breadth and depth it brings to any field. It won’t be long, I think, before IBM’s Global Business Services is rebranded Smart World Services. (OK, I am joking.)

    To even see how they might fit into Big Blue’s Smart World play book and Dynamic Infrastructure go-to-market strategy, business partners (who were briefed about this in February, apparently) will have to get certified as Dynamic Infrastructure Specialty partners, and IBM is holding out the carrot of access to “rich pre-sales assessment tools” to those partners who jump through the hoops. IBM wants to shift partners from selling gear to selling solutions. There will also be a Dynamic Infrastructure Specialty-Elite certification that will enable partners to do assessments as well as peddle gear as part of a deal.

    For partners who play the Dynamic Infrastructure game, IBM is kicking in business development funds and pre-sales help, too. How much, I am not sure. The important thing for those partners who already jumped through the New Enterprise Data Center hoops is that they have already done a lot of the jumping they will need to do. But it looks like mid-market partners had better start reading up and getting their sneakers on if they want to be in the Dynamic Infrastructure game. The partner list, as you can see here, is pretty skinny. IBM is going to need an army that is a lot larger than this to automate the world.

    RELATED STORIES

    IBM’s Dynamic Infrastructure Announcement Blitz

    IBM’s Plan for an Adjacent, Custom Systems Market

    The IBM Systems Agenda: iB(M)

    international Business (machines)



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    Tags: Tags: mtfh_rc, Volume 18, Number 10 -- March 9, 2009

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TFH Volume: 18 Issue: 10

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    Table of Contents

    • Getting Dizzy from Dynamic Infrastructure
    • The Economy Gives the Server Biz a Flat Tire in Q4
    • Infor Battles Customers in Court Over License Fees
    • As I See It: Isolation
    • Global IT Spending Barely Ahead of 2008; Some Regions Showing Strength
    • Have IT Vendors Been Hit Harder Than IT Departments?
    • CFMUG Downshifts from Monthly to Two Yearly Meetings
    • IBM to Bid for Satyam? Rumors All Over the Place
    • MKS Weathers the Economic Storm in Fiscal Q3
    • Overworked, Underpaid, and No Free Donuts and Coffee

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