Following from a few hectic months of congresses, conferences and user meetings I find myself in a quandary. What to talk about. It’s not that there’s nothing to say, quite the contrary…
Blog
Dassault Systèmes ECF2010
The past two weeks have been somewhat fraught for those of us in Northern Europe. Whilst the icy weather and heavy snow showers may have smug four-wheel drive car owners testing the competencies of their high-tech drive trains and hill-descent aids; nature, however, has an unerring way of reminding us of the that the laws of momentum can shatter confidence in the merest of moments.
IBM invests in the mid to small enterprise
Our observations from IBM’s General Business worldwide influencers conference leads us to believe that IBM is well positioned to make much more of a mark in the sub 1000 employee company space; having said that HP, Sun, Dell, Cisco et al are not likely to let IBM take the initiative without a fight.
Some notes on the Siemens Industry 2010 analyst event in Boston
The recent Siemens Industry analyst event consisted of two days of intense information sharing – following the event, and given time to digest the information my (very concise) summary is as follows:
IBM Innovate 2010 Rational software developers conference
Upbeat tempo, an enormous audience of 4000 people and an inspirational keynote by Dean Kamen left me impressed with this year’s IBM Rational software developer’s conference.
Steve Mills’ keynote reminded me (not that I could ever forget) of IBM’s huge momentum in the software industry. One just has to look at their breadth and depth of offerings and number and scale of their investments over recent past to be mindful of the significance that IBM places on their software business. Interesting to note at this particular event that their embedded systems impetus, which one could argue was waning some years ago under Rational brand has been revitalised following the Telelogic acquisition. Responsibility for this programme has recently been placed under the direction of Meg Selfe in a unit called ‘Complex and Embedded Systems’.
Meg’s background appears to be ideally suitable for the Systems and Embedded role not only in recent past within IBM but also in her former experiences in both technology and management in companies such as GM and Motorola. Discussions with her and the ever insightful Neeraj Chandra highlighted IBM’s significant interest in covering more than just the software lifecycle; to that point it’s interesting to note PTC’s recent forays into the realms of application lifecycle (notably software) management with announced support of open source technologies such as Bugzilla, Eclipse and Subversion in their PLM platform Windchill. IBM’s intention is forecast to provide the (tools and) frameworks to support an extended play in the PLM space. Key to this, as always, is the engagement and support of both customers and other software suppliers – with customer needs driving more intimate partnerships. I’d be surprised if we don’t hear more on this soon.
Cloud computing. Hyperbole or fact? Fact, I believe. Although (I’d argue that) the technology is somewhat more evolutionary than revolutionary, the interest level in understanding what, how and why is at an all time high. The cloud sessions I attended were packed to the gunnels reflecting real interest on the values and application of the concept. It’s also apparent that the field is still rapidly evolving, notably within IBM. What I saw and heard at the event was skewed to the larger enterprise but what will be interesting to see is whether IBM will extend their programs to support smaller to mid-size developers and their customers; areas in which Microsoft (Azure) and Google (App Engine) and to a lesser extent Amazon (EC2) appear to currently have more significant aspirations.
The evolving PLM landscape – Major seismic event or minor volcanic rumblings?
Now that the Dassault Systèmes assimilation of IBM PLM is complete we’ll have the opportunity to track the momentum of the new operation; announced last year, the realignment of sales strategy offers new opportunity, and of course, new challenges. As mentioned in a previous article, the proof of the pudding will be in the eating. Talking (or writing ) of the changing nature of major PLM vendors, Siemens (PLM Software) recently announced their unified sales strategy, consolidating Product Lifecycle, Manufacturing Execution and Plant Lifecycle sales operations into a single entity, Siemens Industry Software. In the same release, Siemens announced an emerging sales relationship with HP. For those following major players in the PLM market this is indeed interesting news, especially in light of the major changes to Dassault Systèmes sales network.
(Not to be left out of recent news), Autodesk’s recent new product announcements seemed to catch the imagination of many, delivering more integrated workflows for styling, design and engineering disciplines and one can imagine treading on the larger foot(print) of the integrated solution vendors. In fact, with an intensifying focus on major accounts and increasing direct sales presence competition in the larger accounts is certain to hot up. PTC, albeit somewhat more restrained in product announcement, merger and acquisition fronts is making sure we don’t forget them by delivering sound growth in a number of key business areas, specifically in product sales for Windchill with noted increase in larger deal PLM activities. Recent moves to re-energise their channel offer an opportunity to reclaim some lost ground to companies such as SolidWorks, (if image, product and channel perform), but they too have made moves to capitalise on the growing opportunity in major accounts with an intent to increase direct sales headcount by over 10%.
Having had time to ponder over the new situations during an unexpected sojourn in ash-free US, what’s clear is that there’s a significant, and I believe, positive change happening in the evolution of the major players in the engineering solutions space. Most notably in creating, and demonstrating clearly differentiating positioning– more than just ‘words’ and ‘marketing hype’ and something that is of greater intrinsic value to the customer.
We’d heard (from Siemens) many years ago that project ‘Archimedes’ would result in closer links between design, engineering (and PLM) and the shop floor. Indeed with the Siemens acquisition of Innotec (the COMOS product suite) I imagined that the values brought to bear from the new entity would result in increased focus and PLM extension into the process and plant realm. But until recently, there’ve been few visible signs of integration, not just in product but also in the presentation of the new Siemens value set to the open market. No doubt this is in part due to complexities of technology integration but perhaps too the relationships between somewhat disparate internal PLM, MES and Plant (COMOS) interest groups. I would argue that with Siemens’ recent announcements all of that has changed. Not only have they been able to demonstrate integrated elements of their solution set covering a broad range of business disciplines, as demonstrated at the Hannover fair, probably more telling is their announcement of a single integrated sales strategy to deliver this to market.
The new Siemens sales model will undoubtedly resonate with many, specifically mid to large manufacturers, but the often unique requirements of different industries coupled with the complexities of global (sales, manufacturing and supply) networks, and let’s not forget the differing needs of small vs. larger companies, requires multiple views and different entry points. One size doesn’t necessarily fit all. To that end, product mix, relationships with a broader set of channels, collaborations with point solution providers and relationships with global players such as KPMG, Accenture, Microsoft, HP and IBM et. al. are all vital to the mix. Arguably the scale and influence of the greater Siemens make them well positioned to pull this off.
It’s somehow reassuring to note that that technology dynamics in areas such as collaboration, social computing (and networking) and cloud based infrastructures means that more change is likely. Not just in product, but also in areas such including channel and customer value engineering. I for one believe that change is good – for customers and suppliers alike….and let’s not forget that challenges from the left field will undoubtedly continue to surprise us. Who’d have thought that a volcano in Iceland could cause such a ruckus?
Any and all thoughts welcome….
Views on the IT industry in Africa –Insights from IBM
IBM’s up-beat briefing on their Sub-Saharan business was not only an eye opener on their aspirations for their business in the African continent, but so too a view into some of the unique challenges facing information technology suppliers in the region.
Notwithstanding IBM’s objectives for global sustainable growth, discussions with their executive team highlight the importance they place on Africa as a key ‘Growth Market’ of the future. The transformational opportunities that make the region unique are without doubt multifaceted and driven by wide ranging issues including geographic, geo-political, and socio-economic circumstance. The business environment is further complicated by the unique complexities of local legislation, lack of skilled staff, corruption and poor basic infrastructure; even, albeit to a lesser extent, in the more affluent South African region.
History teaches us that first mover advantage is crucial in the IT industry and IBM is keen to take advantage of this to develop a leadership situation in IT provision in the region. Often considered to be slow to change but with robust and effective execution, IBM has frequently been dubbed a ‘supertanker’ within the IT industry. In Africa, however, their aspirations and initiatives are more akin to an entrepreneurial start –up. Plans are pragmatic but the investment intent is clear; with local offices focused in areas of more intense growth, business partners are left to develop smaller and (currently) less lucrative markets.
Yet, the opportunity in the region is significant. Foreign ventures, significant natural resources and low cost labour will no doubt drive IT investments. This will, of course, vary significantly country by country but in an environment where basics such as water and electricity are still luxuries to many, investments in infrastructure will be amongst the largest, and this is an area in which IBM excels; government, telecoms, financial services etc. Although, from a pragmatic point of view, it’s also important that growth will be supported by more than just infrastructure investment. Oil and mining are significant revenue generators but manufacturing fails to match the growth many have seen in other emerging geographies such as Asia.
One can consider these to be the formative years of the evolution of the continent; where mistakes made are still lessons to be learned. Without stable infrastructure elements such as power, telecoms and water however, the incentive to invest is thwarted by supply. The power situation in South Africa is one such example where demand has outstripped supply. Here we have a (relatively) wealthy nation, with a larger than average (in Africa) established mining, process and industrial manufacturing sectors, having to engage in load shedding (intentional power outage) to protect a total national blackout of power ; clearly a challenge to overcome if investment growth is to be maintained.
But there are many areas where Africa offers clear value for inward investors. These include capitalising on mining expertise, South Africa’s nuclear power competence (notably their Pebble bed reactor expertise) and, of course, in taking advantage of low cost local talent. With particular regard to the latter point, it was interesting to have an opportunity to see IBM’s Integrated Delivery Centre. Providing worldwide multi-lingual support for a European banking organisation, it is a clear endorsement of world class technology service capable of being delivered from Africa.
Whilst the timing of Africa’s emergence from 3rd world status cannot be guaranteed by any means, where there’s a will there’s a way. I for one am an avid supporter African economic development, being Zambian born. What is clear is that support from the international community is essential to the Continent’s transition; and this means support from not only international organisations such as the IMF, but also governments and the broader business community. To this end IBM’s expansion and support of infrastructure and industry in Africa is a reflection not only of their belief in the region, but an incentive for others to invest or face getting left behind.
So it appears that 2010 will be the year of the channel…..
Reinforcing this sentiment, the likes of Cisco, McAffee and IBM have made some significant announcements of recent times which ramp up their channel initiatives. Some of these appear to be to the detriment of their direct operations, yet of simultaneous but converse potential benefit to small to medium sized businesses and the channels that support and supply them.
In response to both recognition from both Channel Insider and Business Solutions magazines earlier this year, McAffee’s Fernando Quintero, their vice president of channel operations for the Americas, cites that 2010 will be the year of the channel. In addition Sandy Carter, IBM Vice President, Software Group Business Partners recent announcement on channels and offerings endorses the sentiment that the channel has much more to offer to the small and mid markets. Moreover, as the longstanding powerhouse in larger accounts, IBM last week announced some pretty significant commitments to channel. But they’re not alone. The likes of Cisco, HP and Microsoft et al haven’t exactly stood still in the channel race although Sun, interestingly enough, appears to be on a path to reduce commitment with recent announcements on a shift of major account activities away from channel to direct operations.
So what does that mean for the customer? At the end of the day they’re the ones that need to see value from any shift to, or increased focus on the channel. Of course, it is an age old adage that many customers prefer local service. These customers appreciate not only the capabilities of their channel suppliers; they like the people, but they also like to feel the confidence that can only come from the assurance of the big IT vendors.
In the past the sales gap, if I can call it that, between direct and indirect was often driven by a lack of commitment and support – to the channel. At lower margins, the dichotomy of direct vs. indirect targets as well as the threat of cannibalisation of direct revenue is undoubtedly an issue, but these problems are solvable or at least manageable. Good and clear strategies, cogent, fair engagement rules, competent partners and good channel management all can make the difference.
So what happens now? Obviously we’ll have to wait and see how the channel responds to emerging opportunities, but early indicators (and indeed the findings of my own research last year) indicate a very favourable reception leading to increased revenues, loyalty to innovative vendors and, of course, increased choice and value to the end users.
What’s next? Well much is still to be done particularly in the oft-challenging areas of empowerment and enablement. They pose as the industry’s next hurdles. (Easy to say, not so easy to do.) Clearly this leads to many new options, as well as providing the opportunity to initiate a break with traditional views on the value and deliverables of the channel. To this end, I believe one of the ‘big things’ in 2010 will be the ‘cloud through the channel’ – a fact that has not gone unnoticed by the likes of IBM and Cisco. Indeed Symantec’s Deepak Mohan, senior vice president, Information Management Group, notes in their recent 2010 State of the Data Centre that “Although mid-sized enterprises tend to evaluate and adopt new technologies at a faster rate than larger organizations, they still face the similar data centre complexities that are compounded by adopting new initiatives”. Isn’t this where the channel steps in?
Interesting times with exciting possibilities on the horizon – any views on the ‘cloud in the channel’ welcome!
IBM and Dassault Systemes – times are a changing
As most will know IBM has recently agreed to an offer to sell their PLM sales and client support operations to Dassault Systemes. Whilst many will be surprised by this news, there are many amongst us that believe that this is an inevitable culmination of many years of shifting relationship between IBM and Dassault.
Through highs and lows the IBM/Dassault relationship has been unique in its execution. Undoubtedly good for Dassault in delivering vast momentum in corporate accounts and clearly beneficial to IBM in increasing their manufacturing market coverage.
So why change? Well my take is that Dassault wants to be closer (read more in control) of their destiny and customers, and IBM’s keen to extend their footprint in manufacturing and process industries – to leverage their own software and service revenues (not necessarily with Dassault products). Of course there are many other reasons, benefits and negatives to the changed relationship (including, of course, financial); however I think it’s fair to say that due to the constraining nature of the historic IBM/Dassault relationship neither of the above core objectives was particularly achievable. For one there’s too much legacy, and second, these objectives are to a large extent contradictory in nature.
Will the move work? Well as they say, the proof is in the pudding, we’ll have to look at IBM and Dassault’s prospects and customers (and results) to see how they take to the changed landscape; and of course let’s not forget the competition that will be eager to ensure unsettled customers and prospects find a safe haven in their ecosystems. If we’ve learnt anything over the past years it’s that the customer is king. If they see value and benefit from the new constellation then it will work – the threat though is on the counter side.
An interesting move – and one that will, I’m sure, attract much more discussion.