In these uncertain times the technology industry is running for the shelter of consolidation but, as Exec Digital finds out, companies prepared to innovate win.
By Gary Chambers
If we learned anything from the Oracle-hosted CIO summits held last year, it’s that even the major tech companies are afraid. The focus of most companies, it would seem, comes down to consolidating their core services, trimming the excess and riding out the economic storm on a tightly-regimented raft of familiarity. But with new, exciting possibilities encased in infant technologies such as cloud computing – or Software-as-a-Service (SaaS), on-demand software... however you want to package it – surely innovation is the way forward?
For the bigger companies especially, there must be a good argument for seeing what’s around the corner and looking at effectively harnessing it for future prosperity.
IBM is one such company that takes innovation seriously in managing its enterprise software packages. As Exec Digital learned in our June edition last year, Big Blue has already been taking big strides in the realm of virtual working and remote networking, but this is just the tip of the iceberg as far as innovation is concerned. The company is working to make it easier for companies to collaborate through applications and appliances such as the IBM Lotus Foundations Start.
PURE TECHNOLOGY, PURE INNOVATION
For the past eighteen months, the man charged with heading IBM’s growth into new areas is Mark Hennessy, appointed CIO in July 2007. And as he notes, this is his first pure technology job – something he is very excited about indeed. As is, it seems, the entire IBM community.
“I’m excited that we have such a large early-adopter in IBM,” says Hennessy. For IBM, Web 2.0 development, virtualisation, and the like are crucial to its platforms moving forward.
“We have so many people interested in using those tools, sharing whether the tools are effective or not, or how to make them more effective.”
For Hennessy, this position seems a natural progression in the career of a man who has been so tied up in bringing an effective technological solution to clients.
“I think one of the key requirements for CIOs these days is to drive real collaboration between the IT community and the line of business,” he notes. “We need to make sure we are addressing the requirements of the line of business – we’re helping to set strategy.”
And crucially for Hennessy, it all comes down to giving the client what they want.
“My goal is to have a conversation with a client once a day. We need to make sure we understand how our tools and processes are serving our clients. Are they getting what they need?”
It’s not the hardest question for IBM to answer.
“We have many of the same challenges,” says Hennessy. So giving the client exactly the right service is straightforward: what’s right for IBM is right for the client, and vice versa
TROUBLE AHEAD?
But even for the likes IBM, the horizon is adorned with an array of challenges. Online enterprise solutions, due to their undeniable potential and popularity, are an extremely competitive space.
The sky around the cloud computing race is getting very cluttered indeed. Already we’ve seen all manner of entrants into the marketplace from some of the industry’s biggest names: Microsoft and Google are two major players in the SaaS arena already, not to mention the direct competition to IBM’s enterprise management solutions in the shape of Oracle’s E-Business suite, Adobe’s highly regarded GoLive software, Sun Microsystems, et al.
And in the era of free and open, the battle is shaping to be unlike anything we have ever seen before. Long gone are the times when the proprietary software vendors could cripple the competition before the fight had begun.
Times have a-changed and this is anybody’s to win. Then you have to consider that everyone might win – everyone is after a slice of the pie, and although the slices won’t all be the same size, it seems that there is more than enough to go around.
Just take a look at some of the other enterprise-level offerings that have emerged recently. Facebook Connect, for one, has been widely tipped to redefine the social Internet, by extending the interoperability of the Facebook platform well beyond its already burgeoning walls. In a time when Facebook’s ability to monetise its gargantuan operation is consistently being called into question, it has torn the walls down and finally opened up a real opportunity to earn some serious money.
Consider: the Facebook ads system, which runs on the tried-and-tested idea of offering an automated advertising service similar to Goole AdWords and getting services in touch with the relevant audience.
Seems good in theory, but really hasn’t been paying the bills for Zuckerberg’s baby. But with third parties now able to leverage Facebook’s social metrics on their own sites, what’s to stop Facebook offering their advertising up to outside developers?
It’s a mutually beneficial arrangement that could really turn the tide in the race for on-demand supremacy.
So is there even a downside?
AN ECONOMIC SQUEEZE
Predictably, the biggest obstacle to this technology moving forward is the reluctance of companies to invest in it from an early stage. For smaller companies, certainly, there is definite risk factor in adopting any technology at an early stage, but there is a more important challenge facing the early adopters at present: with the current economic climate, the thought of investing money into new services seems almost counter-intuitive.
With the number of lay-offs hitting the technology sector, not to mention the millions being slashed from marketing, wages and any other non-core expense, it wouldn’t be surprising if the ‘cloud’ was expanding only at a snail’s pace. But the uptake has been astonishing.
The reason is not exactly hard to see. The companies creating the management software, framing the on-demand space for others to work in – they are taking a risk, but a calculated one. The potential in this space is, after all, huge.
The companies taking up the technology on the other side of the coin however, can be more assured in their choices. The major strength of on-demand computing is its flexibility, ease of use, and crucially, how streamlined it can make existing operations.
But more than anything, the rapid uptake is symptomatic of a need to stay ahead of the game. As Hennessy notes, IBM does not want to repeat its mistakes of the 1990s: “We took our eye off the ball. We stopped thinking about our clients in the market place and concentrated on what we were doing, how we were going to make money.”
There are a few things that are readily apparent about the SaaS, or on-demand, or cloud computing space, that sets it apart from any other technology race. For starters – and perhaps obvious to state – it’s big... really big. It’s also not all about making money: it’s about creating services that companies generally need and revolutionising existent working practices.
It’s a space that’s set to change the way we all work: it’s the future, and it’s happening today.