IBM exec: Information on Demand is coming together

It’s been a bit more than two years since Ambuj Goyal launched IBM’s Information on Demand strategy, an effort by the company to bring together a virtual menagerie of data management, access and analysis software under a single heading.

Goyal, general manager of information management in IBM’s Software Group, has driven the effort partly through a seemingly relentless series of acquisitions.

One of IBM’s highest-profile grabs is undoubtedly its pending deal to purchase business intelligence vendor Cognos for US$5 billion. It’s also bought niche companies such as Solid Information Technology, a company that makes an in-memory database, and Princeton Softech, a data archiving firm.

A central pillar in the strategy is IBM’s Information Server, released in October. It is an integration platform for combining data from a variety of heterogenous sources.

The company has yet to develop its own packaged enterprise applications, choosing to tackle that lucrative business through partnerships. Instead, IBM’s goal is to become the leading supplier of a data infrastructure designed to make those applications more effective.

IBM’s core target remains large enterprises faced with an avalanche of business data, and there is plenty of opportunity here, according to IT analyst Judith Hurwitz: “I think we’re just scratching the surface of what companies want to do.”

For example, she said, “Companies have to do [radio frequency identification tags] because companies like Wal-Mart insist upon it. They’ve got all this RFID data, and they’re not doing anything with it. The question is, is there a way they can actually start using that RFID data to make better business decisions?”

Goyal and his teams might tell you that they’re trying their best to answer that question. In a recent interview at IBM’s Somers, New York, facility, the executive painted his IOD strategy as a roaring success, yet one still in its earliest stages.

CDNNOW: From a business standpoint, how has the Information on Demand strategy played out so far?

Goyal: It couldn’t be better. The success … has helped not only the information management software, but the Software Group and IBM as a company. … The Cognos acquisition alone is $5 billion. We would not be allowed to do that, the shareholders and board would not allow us to do that, unless we had made a return on our investment.

CDNNOW: You’ve assembled a dramatic array of data-centric technologies, but still aren’t in the packaged ERP, CRM application business. Why?

Goyal: Our strategy remains that we are not in the ERP, CRM space. We are not in the applications business, of that kind.

There is the market for automation and the market for optimization. Automation is about having an application agenda. I either build custom applications with COBOL or Java, or I do packaged applications, or I do [service-oriented architecture] to say look, ‘I already have applications, let me get a combined application or composite application.’

That’s a market for consolidation now. That’s not where the growth is. What a lot of people are saying now is, ‘Hey I’ve automated the call center, can I improve my per-customer profitability?’ It’s not about automation, it’s about optimizing my business, and that’s all about leveraging information.

Even in China, the automation market is saturated. Everywhere, we are seeing the automation market is saturating. There are a lot of projects going on in automation, don’t get me wrong. But in that market, people have made their decisions. Now people are saying, how can I optimize?

We don’t do supply chain software, but we make supply chain software better. We don’t do core banking, but we make core banking better. That’s the optimization market. It’s a multi-tens-of-billions-of-dollars’ worth of market. That’s where the world is starting to go.

CDNNOW: So who are you competing with?

Goyal: It’s not who, but what segment. All these companies have become very, very big. When we work with HP, some of IBM’s business provides services and software on HP’s hardware, and our hardware business competes with HP. Same thing with databases: We fight against Oracle. But when we work with Siebel and Peoplesoft, we work with Oracle.

CDNNOW: Microsoft just made an offer for Fast Search and Transfer, a high-end, pure play enterprise search vendor. They clearly see it as a growth business. How important is search within the IOD strategy?

Goyal: Search to me is an ingredient technology. People don’t buy search. People buy improved interaction with a client.

[Search] is an ingredient technology that helps me solve a particular problem. People tell me Yahoo and Google are in the search business. They’re not; they’re in the advertising business. Search is just an ingredient technology that they use.

With everything we do in Information on Demand … search will be one of the ingredient technologies to leverage structured information and unstructured information.

CDNNOW: Are you done buying companies?

Goyal: If history is an indication of what we have done over the past seven years, we can predict the future. You can answer your own question as to whether I’m done buying companies.

We are now in the optimization space, where two decades ago the world was in the automation space. When JD Edwards came out, when the first sense of ERP started to emerge, and so on.

We feel from a basic truth perspective we are in the best position. We now have information integration, master data management, we have BI, data warehousing, databases, content management, we have search.

But the journey of optimization has just begun. It will take us in ways we don’t understand, even today. We are going after information on demand in real time. Sub-second, sub-millisecond response times to a question asked in a call center and delivering information just in time to optimize a business process or a human decision. So this is a two-decade journey.

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Jim Love, Chief Content Officer, IT World Canada

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