The abiding impression from the IBM Software Analysts Insight conference in Stamford, Connecticut was of a company absolutely clear on its strategy and sure-footed in its execution. For nearly a decade (since 2004), IBM has been attempting to reduce the market’s identification with its individual software brands (Tivoli, Rational, Websphere, Information Management), and in 2010 it took a sharp turn in that direction with the reorganization of the software group, IBM SWG, into Solutions and Middleware. The change was more than window dressing for marketing. IBM’s goal was to marshall and integrate its extensive range of software capabilities and align them to the business agendas of its clients, rather than in technology silos.

Three years later that structure is still in place and is manifestly getting results. What started as a set of ambitions, roadmaps and presentation-ware is now plainly evident in products, projects, clients, acquisitions, go-to-market strategy, and fortunately, in still more ambition. The SWG is about one-quarter of IBM’s revenue but produces 40% of its profit, with a target of 50% set for 2015. IBM has set its sites on deploying its unrivaled portfolio of infrastructure, middleware and development technologies to solve old problems in new ways and to apply technology to whole new domains.

Technology is top of CEOs’ concerns

IBM’s 2012 CEO Study shows that technology is now the top concern of CEOs (above people skills and market factors, for example). Technology is the main vehicle for delivering the changes that enterprises require to survive, compete and thrive. No surprises in IBM’s view of the technologies that preoccupy the CEOs right now: mobile, cloud, security, big data, social networking are the headliners. But technology is not an end in itself and IBM has comprehensively organized its offerings around pressing business needs: innovation, agility, management of risk, compliance, security along with several enablers for meeting those needs like deepening of engagement with customers, partners and employees; optimization of the IT and business infrastructure; and the need to mine the vast seams of data available for actionable insights into operations and marketing.

Aligning capabilities to 12 customer agendas

With its usual finesse in marketing and sales, IBM categorizes clients’ business needs into a set of ‘agendas’ relevant to executives within client organizations who would typically hold that agenda. For example, a Chief Security Officer would be responsible for the Security agenda in an organization, and would be the target for IBM’s pitch of its security offerings which include capabilities around Application Security, Infrastructure Protection and Mobile Development and Connectivity (along with six other capabilities it considers relevant).

Overall, IBM identifies eight agendas for the Infrastructure side of SWG and four for the emerging Solutions business. To meet the needs of these agendas IBM lists 31 capabilities (encapsulating probably hundreds of individual tools and cutting across its traditional brands.) As you would expect, IBM can address every agenda with multiple ‘capabilities’ (on average about 10 capabilities per agenda). The point is not that clients should understand this matrix – to the contrary, it should be transparent to them – but rather that IBM understands how its portfolio can be leveraged across the needs of its clients. That it can illustrate this easily in one coherent chart makes it all the more convincing to me.

Three prominent conference themes

Looking for a one-to-one map between an IBM capability, product, product line or brand and a market need or opportunity would be pointless. It is now all about integration. In executing on its strategy, we see considerable integration activity across its portfolio in diverse dimensions:

  • Expert integrated systems: the PureSystems offerings
  • Acquisitions where it has gaps in its offerings
  • Embracing standards for interoperation of services
  • Harmonizing tools for IT and systems, bringing ALM and PLM together
  • Breaking down delivery lifecycle silos with continuous delivery
  • Architecting foundations for Cloud, Big Data and ALM
  • Building industry-specific solutions based on IBM Middleware (the Smarter solutions).

Let’s be clear: integration is far from complete. However, there is no doubt that it is core to IBM leveraging its products. Beyond integration two other themes stood out.

Maybe the most important was the increasing role of analytics in digesting the vast amounts of information generated by social and mobile computing. From being an offline post-process in a warehouse of historic trends, analytics are moving towards realtime and predictive insights that an organization can action quickly. In the future, IBM will enhance analytics with the sort of cognitive computing that powers Watson. IBM expects the ‘Smarter Analytics’ market to be worth $16BN by 2015.

Another theme was the potential to solve new problems. Business process automation is still the core of where businesses spend money. It is a $1.5TN industry globally. But as computing costs, and connection costs of infrastructure come down, and analytics become more predictive and realtime, new opportunities arise in managing the physical world.

The conference was notable for a couple of things that were not mentioned. I didn’t hear anything about mainframes and I found only one reference anywhere to modernization. The now ubiquitous Systems of Record and Systems of Engagement dichotomy was mentioned several times. It served mainly to illustrate the change in architectures from a three-tier web application server topology to a heterogeneous mix of services which goes along with new technologies. If you are not a green field business – an Amazon, Google, Facebook or Twitter, you have a major task on your hands to absorb new technologies at all, let alone quickly, while still maintaining transactional integrity and security. If anyone understands such customers it is IBM.

High point or point of inflection?

New technologies for traditional organizations and cutting edge technologies for new problem domains. The timing is perfect for IBM. It has a great hand to play. But can it play it with the innovation, speed and agility it recognizes is a business imperative for everyone else?

It has been a while since I felt that IBM had such a coherent vision of its software business coupled with products to match. The question is whether the vision will be remembered in and of itself as a high point in IBM’s prowess as a software giant. That would not be a good outcome. The real success lies in the future. Right now should just be an inflection point sending IBM – as it executes on the vision – streaking away from the pack.