Posts Tagged ‘Cloud’

IBM sales shrink for 14th consecutive quarter

October 22nd, 2015

IBM’s big bets still aren’t paying off fast enough to offset its weakening core business.outsourcing8

Sales at the company were down for the fourteenth consecutive quarter as a result of continued investment in “strategic imperatives” like cloud services, and analytics — and decreased focus on legacy hardware, software and mainframe related business and consulting services.

During the past three months of the year, IBM revenues shrank 14%, according to its latest earnings report.

At the same time, combined revenue for cloud, mobile, analytics and security products continued to grow, climbing 27%.

“Those results show a lot of progress and there’s just more work to be done,” CEO Ginni Rometty said during the WSJD conference on Tuesday.

Rometty added that since taking the reins, the company has invested in 37 companies and divested $8 billion of products, including its mid-tier server products, customer care outsourcing, and micro-electronics unit that built its chips.

Analysts weren’t surprised by the company’s latest performance, given that IBM has said its transition would take multiple years.

“We’re certainly not pleased with the quarter, but we don’t think IBM’s business is broken,” Morningstar analyst Pete Wahlstrom wrote in a research note.

About half of IBM’s annual sales come from legacy services related to running IT infrastructure products like DB2 and IBM WebSphere.

Forrester analyst Andrew Bartels calls this a “foundation of revenue” that has been flat, but still core to IBM’s business.

The key to getting IBM (IBM, Tech30) back to growth is getting the company’s cloud, data analytics, mobile, social and security products to become a bigger contributor to revenue.

Getting to that point from where they are now will take about another two to three years, Bartels told CNNMoney. The “strategic imperatives” only make up about 20% to 25% of IBM’s overall sales at the moment.

“Once they get there, they’ll be well-positioned for the long run,” he said.

In a prepared earnings statement issued on Monday, IBM said that its transformation was always going to take time, and that “progression wouldn’t be a straight line.”


Finnair selects IBM for cloud transformation

October 13th, 2015

Finland’s national airline, Finnair, has signed a five-and-a-half-year services deal with IBM to transform its technology infrastructure into a hybrid cloud platform.Outsourcing46

The agreement also includes development of new digital services, such as mobile on-flight services.

“The basic element [in the agreement] is our datacentre services, which we want to consolidate into one environment and under one provider,” said Kari Saarikoski, CIO at Finnair. “At the same time, we want to start to take these services into the cloud to gain flexibility, cost-efficiency and the other goodies the cloud promises. We’ll start with less critical services and then move on to the more critical ones.”

At the core of this transformation is the Finnair Cloud Platform, which will be run by IBM and will enable the integration of different operational and commercial services into single environment. This is a new step for Finnair which, while favouring the software-as-a-service model, has previously used the cloud sparingly.

The agreement also includes application management and development services, as well as a new services governance model. IBM will also take on responsibility for managing Finnair’s IT provider network.

“This will take some time, but is one of our goals,” Saarikoski said. “During the past years we have taken on many new applications and providers and it takes a lot of our time to manage them all…Besides looking for cost, consolidation and management benefits, we want to move the focus of our own people more towards digitalisation, development and innovation.”

Finnair’s employees will also trial IBM’s Watson Explorer capabilities and use its cognitive skills to locate information and respond to customer queries more efficiently.

While Saarikoski notes other vendors were considered, Finnair’s long term collaboration with IBM was a factor in its selection. The airline outsourced its basic IT services and application management to IBM in 2002.

A major driver for Finnair’s move towards the hybrid cloud is its need to boost digitalisation and customer experience in the highly competitive and cost-focused airline market.

Since launching its mobile app last year, the airline’s development focus has been on new consumer-facing mobile and in-flight services. These will now be progressed further with its upcoming cloud capabilities in collaboration with IBM and other partners.

Finnair will also join the growing number of airlines that offer in-flight connectivity and plans are in place to introduce Wi-Fi to its entire Airbus fleet by the end of 2016. The roll-out will start with its new Airbus A350 airliners, which will have built-in wireless networks.

“This opens up new opportunities for services development – it’s a new platform,” said Saarikoski. “Based on what we have talked about with our colleagues, everybody is focused on the same themes: customer experience and how to increase the sales of ancillary services to our customers.”

Finnair is Finland’s largest airline, carrying more than nine million passengers a year. The financial terms of its services deal with IBM were not disclosed.


The dawn and dusk for IT service providers

May 27th, 2015

In a recent post, I shared one of the questions most often asked of us at ISG: “How is the IT services landscape changing?” Most often, the questioner wants to know who is going to win at this new game.Outsourcing5

I have enough enemies already, so I won’t answer with specific service provider names, but I will share with you the insights I have about what seems to be working and what seems to be a solid foundation for success in the future.

Advances in digital technology and cloud computing mean radical and difficult changes for the service provider community, which is largely used to selling bodies although every one of them would tell you they prefer non-linear revenue.

Today, digital and cloud capabilities are also table stakes. Over 80 percent of the IT deals we advise have at least a component of digital/cloud somewhere in them. Who are the winners and losers? Here are some telltale signs, as I see them:

Winners are busy developing vertical-specific, highly robust, secure and repeatable solutions to business problems as flexible multitenant platforms. Losers sell towers, widgets and bodies. Winners make integration of these platforms to legacy systems and other platforms easy; losers try to go proprietary.

Winners understand that, while a big chunk of their product is still bits and bytes, the platforms they sell are front-office solutions that fundamentally change how their clients interact with customers and make money. Losers get stuck in features and benefits rather than working to solve issues with direct impact on the income statement or balance sheet.

Winners use application-centric approaches to make sure each application in the solution can live successfully in the cloud. Losers use asset-centric approaches, essentially adopting a build-it-and-they-will-come attitude that, in our experience, tends to fail. This does not mean that the winners get a pass on high-quality services and robust infrastructure as part of their business solutions—stability and scalability are required in this game.

Winners have relationships with new buyers—from the business unit and functional VPs to the COO and even the CEO. Losers will latch on to the CIO and his or her direct reports, competing harder and harder for the diminishing dollars they have to spend.

Winners have the wherewithal to help their clients change. They have the consulting capability and credibility to guide and stabilize their clients through what is sometimes dramatic transformation. Losers will keep trying to solve business problems with technological approaches and hang on to business models that will inevitably fade out of existence.

You can draw your own conclusions as to which service providers are in it for the long haul, welcoming the new dawn of the services economy, and which ones may be headed toward a gloomy dusk.


Unisys enters the software-defined data center market with Intel-based Dorado systems

May 26th, 2015

Last week Unisys announced its most powerful Dorado systems yet. Ten years in the making, Unisys has fully converted its Dorado system to Intel XeonOutsourcing2 processors and introduced them as the 8300 ClearPath line. And ClearPath OS 2200 is a complete operating environment for ClearPath Servers that includes all of the software needed to operate a mission-critical Dorado server. The OS 2200 operating environment is fully integrated and tested together with all software and platforms to ensure the seamless operation you need for your business-critical core business applications and databases.

Unisys is a global business information technology company that offers a full spectrum of technology software, hardware, and services. This latest development proves that Unisys, perhaps the world’s oldest technology company, still innovates and moves technology forward. Unisys developed the world’s first commercially available digital computers, the BINAC and the UNIVAC.

Today, Unisys continues to lead the technology revolutions in areas of cloud computing, cybersecurity, social computing, big data, and mobility.

Unisys offers a complete portfolio of software for ClearPath OS 2200 Servers that includes software for the following areas:

Application development tools
Open source development tools
Database, query and reporting tools
System tools and utilities
Performance monitoring
Communications and networking

One of the current focuses of the ClearPath systems line is rapid deployment of distributed environments, such as service-oriented architecture (SOA) deployments. And the new systems can run applications written for earlier Intel and CMOS based Dorado systems without modification.

The new Dorado systems represent the culmination of Unisys’ decade-long initiative to transition the entire ClearPath architecture from proprietary complementary metal oxide semiconductor (CMOS) processor technology to a software-based fabric architecture running on Intel processors.

The advanced, software-based fabric infrastructure of the ClearPath 8300 Series uses high-speed interconnect technology to link all computing resources and components. Unisys secure partitioning (s‑Par®) software manages all application workloads on the system. Each partition is a software-defined blade with dedicated processing, memory and input/output resources for each workload, eliminating resource contention and enabling fast, predictable application performance with exceptional security.

“The ClearPath architectural transition is both a singular achievement and a new beginning,” said Jim Thompson, chief engineer, Unisys, who guided the 10-year evolution. “The Dorado 8300 Series and our other Intel-based ClearPath systems provide clients with an open, secure computing environment that maximizes their long-term investment in mission-critical software. Plus, by establishing the fabric infrastructure as the new core of ClearPath systems, we have laid the foundation for software-defined data centers that give our clients extraordinary flexibility to integrate new solutions as quickly as their business needs change.”

The Dorado 8300 will participate in clusters with earlier Intel-and-fabric-based Dorado models, as well as with even earlier Intel- and CMOS-based Dorado systems, providing an enriched level of availability, efficiency and integrity in high-performance transaction processing that few systems can attain.

The Dorado 8300 series servers are generally available on May 29, 2015.


Adoption of Value Added BPO Services to Drive Gains in the Business Process Outsourcing Market, According to a New Report by Global Industry Analysts, Inc.

April 3rd, 2015

Business Process Outsourcing (BPO) involves contracting of specific business functions to third party service providers. Though cost arbitrage remains the primary growth driving force in the BPO industry, businesses are realizing the importance of outsourcing as a strategy to lower product development cycle and boost innovation within an enterprise. Focus is rapidly shifting from the traditional model that lays emphasis on achieving labour cost reduction to now providing comprehensive sector specific value-added services. Another factor driving growth is the increase in outsourcing by mid-size companies in a bid to address the issue of rising costs associated with regulatory and compliance requirements.Outsourcing20

Plagued by decreasing margins from traditional outsourcing activities, BPO providers are now focusing attention on adoption of new generation technologies such as process automation,Big Data & Analytics, secure private cloud infrastructure and BPaaS (business process as a service) among others. Use of robotic process automation (RPA) software solutions that replicate some of the manually operated processes is gaining significance. Companies are also embedding analytics-based BPO solutions in processes to offer all rounded actionable insights and help customers build powerful brands and business strategies. Further, growing security concerns are expected to prompt companies to prefer the private cloud model over its counterpart public cloud. The transition to new platforms is to help companies explore new opportunities by offering advanced services such as robotic process automation (RPA), secure private cloud infrastructure and BPaaS (business process as a service).

As stated by the new market research report on Business Process Outsourcing (BPO), the United States represents the largest market worldwide. Asia-Pacific ranks as the fastest growing market with a CAGR of 10% over the analysis period. India remains the most lucrative destination for BPO services, while Philippines emerges as a strong competitor.

Key players covered in the report include Accenture Plc, Aon Hewitt, Automatic Data Processing, Inc., Capgemini, Capita Plc, Ceridian HCM, Inc., CGI Group, Inc., Cognizant Technology Solutions Corporation, Computer Sciences Corporation, Dell Inc., EXLService Holding, Inc., Genpact Limited, Hewlett-Packard Development Company L.P, Infosys BPO Ltd., International Business Machines Corporation, KARVY Global Services Limited, NTT DATA Corporation, NGA Human Resources, Randstad Holding nv, Serco Group, Plc, StarTek, Inc., Sopra Steria Group, Syntel, Inc., Tata Consultancy Services Limited, TriNet Group, Inc., Wipro Limited, WNS (Holdings) Limited.

The research report titled “Business Process Outsourcing : A Global Strategic Business Report” announced by Global Industry Analysts Inc., provides a comprehensive review of the market, industry overview, trends, growth drivers, issues, and recent industry activity. The report provides market estimates and projections for BPO in US dollars for major geographic markets including the United States, Canada, Japan, Europe (France, Germany, Italy, UK, Spain, Russia and Rest of Europe), Asia-Pacific (Australia, China, India and Rest of Asia Pacific), Latin America (Brazil and Rest of Latin America) and Rest of World. Key horizontal segments analyzed for the global and regional markets include Finance & Accounting, Customer Services, HR, KPO and Procurement. End-use markets analysed include Manufacturing, Telecommunications & Technology, Banking, Insurance & Finance Services, Retail and Others.


IBM leads infrastructure outsourcing segment: Forrester

February 27th, 2015

IBM is the leading supplier in the global infrastructure outsourcing segment, said Forrester Research in a new research note.Outsourcing6

IBM scored the highest or among the highest among 13 suppliers across three high-level evaluation criteria: Strategy, Current Offering and Market Presence.

Forrester recognized IBM’s vision for the future of infrastructure services, noting that cloud services has become a major element of IBM’s infrastructure management strategy, said the report called The Forrester Wave: Global Infrastructure Outsourcing, Q1 2015.

According to Forrester, the size of the global infrastructure outsourcing market is $187.5 billion, with North America comprising nearly 58 percent of this total.

Infrastructure outsourcing services are critically important as enterprises prepare their infrastructure for the digital age. Outsourcing providers are emphasizing qualities that include predictability through analytics, self-healing with autonomic computing and automation, and self-service with adaptation to cloud models and use of service stores.

IBM views the current infrastructure management services market as the age of outcomes, IP, and automation. IBM is pursuing several initiatives, including automation with IBM Workload Automation and integration across systems of record and systems of engagement. Since its acquisition of SoftLayer Technologies in 2013, cloud services have become a major element of its infrastructure management strategy.

The report says IBM has a very strong vision for the future of infrastructure services and a very well-balanced global delivery model.

Recently, IBM announced IT infrastructure services deals with enterprise clients including WPP, ABN Amro, Lufthansa and WOOX Innovations.


Infosys to make second startup investment in air quality detector company

February 24th, 2015

InfosysBSE 0.94 % is about to make its second startup investment this year, in a firm that makes air quality detectors as India’s second-biggest software company doubles down on identifying nextgeneration technologies under the new CEO Vishal Sikka.Outsourcing1

“There is a small company we are investing in that makes an air quality detector that you can just drop in stores, in hospitals, in mines and it detects air quality and it is connected to the cloud and you can stream the data,” Sikka said in an interview last week.

He declined to identify the startup by name but observed that it specialises in the area of the Internet of Things – an emerging network of computing and non-computing devices talking to each other and creating chunks of data that can be converted into business insights and new revenue streams.

The deal is expected to close by April. “The world around us is fundamentally being reshaped by software, and IT companies are not serving IT needs. So investing in these companies is essential,” Sikka said. Earlier this year, Infosys made its first startup investment, tapping into the newly established $500 million fund, in a Dream-Works spin-off. Infosys bought a minority stake in the startup for around $15 million (Rs 90 crore).

The latest investment also aligns with the new strategy being pushed by Sikka, which bets on big data and artificial intelligence among the ideas that could potentially become big revenue earners.

James Mawson, founder of magazine Global Corporate Venturing, said companies such as Infosys are finding good response from startups in the Silicon Valley.

“Most Silicon Valley startups and investors and corporations and governments would love to work more with Infosys etc. (because) India carries fewer geopolitical risks than, say, China,” Mawson said.

And apart from tapping into the next technology disruption, there’s money to be made too.

“Most academic literature shows companies that have some corporate venture backing are more likely to exit at higher valuations and benefit the corporate ventures that do it well,” he said.

Wipro, Infosys, TCS have all understood that “linear” growth models for outsourcing no longer holds for the future, hence, they need to look at “exponential” growth models through innovation, said Martin Haemmig, a global expert on corporate venturing.


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