IBM looks to capitalise on untapped cloud opportunity
Big Blue is seeking to bring the cloud operating model to approximately 80 per cent untapped mission-critical apps which have not moved to the cloud due to compliance, costs or latency issues
In the digital era, it is common for organisations to have multiple clouds for different and varying workloads. Gartner, for instance, predicts that, by 2020, 75 per cent of organisations will have deployed a multi-cloud or hybrid cloud model.
Big Blue, which has over several decades watched and led the transformation of the IT industry, is now looking to tap into the huge unexplored hybrid cloud market which it believes is the next big opportunity. IBM calls this as the Chapter 2 of the cloud. While Chapter 1 of the cloud was largely about moving a lot of new and customer-facing applications to the cloud, Chapter 2 of the cloud is the US$1.2 trillion hybrid cloud market.
Explains Karan Bajwa, Managing Director, IBM India, “Cloud 1.0 in India was all about agility, scalability, time and cost savings. It helped enterprises become agile and automate processes, as organisations began their digital journey. Cloud 2.0, is more about combining the potential of the cloud with the advances of digital transformation to help organisations scale their business and grow exponentially. Building on the agility and cost savings offered by Cloud 1.0, Cloud 2.0 focuses on modernisation, management, infrastructure, security, governance and seamless integration. We see companies in India moving beyond their initial cloud deployments and realising its potential to help optimise existing business applications, re-architecting applications; modernising them and launch new business services, with levels of speed and innovation previously impossible.”
Bajwa states that his company’s strategy to tailor products and services to what clients are asking, rather than what providers are trying to sell, has helped IBM position itself strategically in the increasingly lucrative hybrid cloud market. Says he, “We continue to evolve our cloud platform to simplify how enterprises bridge to the cloud by addressing their needs at any point in the journey –from accelerating the migration of existing workloads to the cloud, to modernising and extend existing apps and to delivering the right tools to build cloud-native apps from the ground up. This strategy has enabled IBM Cloud to become the gateway to AI, blockchain, IoT and even next-generation technologies like quantum computing.”
The hybrid cloud market is huge, as it gives IBM the opportunity to position itself into multiple areas. States Vikas Arora, Vice President, IBM Cloud and Cognitive Software, IBM India/South Asia, “The cloud market is redefining beyond the public Infrastructure-as-a-Service market. Our clients view the cloud opportunity as incorporating their on-premises facilities, private clouds, and public clouds. There is growing recognition that clients are incorporating a hybrid strategy that incorporates elements of all three. Most analysts expect this hybrid approach strategy, leveraging multiple clouds, will accelerate within major companies over the next decade. This combination addresses major enterprise concerns as they move more of their applications to the cloud, including security concerns, data protection and protocols, availability, and cloud management. We believe, around 60 per cent of the cloud workload will go to public clouds, 40 per cent to private. This may be the inverse in more regulated industries.”
There is a huge opportunity in transitioning monolith applications such as core banking apps or ERP which have to be re-factored into a microservices based architecture, for their transition into the cloud. IBM has a product that fits extremely well in this scenario, called Cloud Paks.
Says Subram Natarajan, CTO, IBM India South Asia, “Cloud Paks are enterprise-ready, containerised software solutions that give our clients a faster and open way to move core business applications to any cloud. This is critical because clients today demand one common operating model and common set of services – including identity management, security, monitoring and logging –to improve visibility and control across clouds.”
The first five IBM Cloud Paks focus on Data, Applications, Integration, Automation and Multicloud Management. This assumes significance when you look at the fact that organisations today are looking at creating a single source of data. Natrajan gives the example of the banking sector to explain how a common integrated architecture helps. “The speed with which banks have grown has given rise to a lot of inorganic growth within banks. This in turn has created islands of data, which in turn has a cascading impact on quality of decisions, customer centricity and other revenue generating opportunities. The IBM Cloud Pak for Integration can help organisations in setting up the appropriate organisational models and governance practices to support agile integration, and in simplifying the management of their integration architecture and reduce cost”
Acquisition of Red Hat – a game changer
Red Hat’s acquisition has been a game changer as it extends Red Hat’s open source innovation to a broader range of clients. Based on open source technologies, such as Linux and Kubernetes, IBM and Red Hat can fulfill the need for enterprises for hybrid cloud solutions that deliver true choice and agility. Explains Bajwa, “As clients will look at securely deploying, running and managing their mission critical workloads across on-premise, private, and public cloud environment, hybrid multicloud environments will be based on a foundation of ‘open’. Red Hat is at the center of this, with the number one Linux operating system and the leading hybrid cloud platform, OpenShift. When we bring these together with IBM’s enterprise incumbency, scale and expertise, we are well positioned to lead the significant hybrid cloud opportunity.”
Recently, IBM commissioned Forrester Consulting to conduct an emerging ‘Total Economic Impact’ study to examine the ways in which customers utilise solutions by both companies in tandem and the impact achieved as a result . These companies adopted a wide range of solutions from IBM (including IBM Power, IBM Z, IBM Cloud Paks, middleware, and professional services) and Red Hat (including Red Hat Enterprise Linux, OpenShift, JBoss, and professional services). The study found out that companies reduced infrastructure hardware and licensing costs by up to 50 per cent, accelerated development cycles up to 66 per cent and increased release frequency up to 10x.
With open technologies such as containers and Kubernetes becoming the common fabric for both modernising existing applications and writing cloud-native applications, IBM has a big advantage with the acquisition of Red Hat. For example, IBM has optimised more than 100 products from across IBM’s expansive software portfolio to run on Red Hat OpenShift. With new Cloud Paks and IBM software optimised for Red Hat OpenShift, enterprises can now build mission-critical applications once and run them anywhere — on all private and public clouds.
IBM wants to be the poster boy for AI in the country. Says Viswanath Ramaswamy (Vishy) Director – Systems, IBM India/South Asia, “What Red Hat did to Linux, we are doing to AI. You can pick and choose any AI framework with Power AI. Everyone is on different stages of their AI journey.”
To explain his viewpoint, Ramaswamy gives the example of IFFCO Tokio General Insurance, which is leveraging IBM Power9 and the optimised software DL frameworks that come with PowerAI software for image processing to analyse the extent of the damaged vehicle (personal cars), which helps them to generate a list of repairable and replaceable parts that were damaged in the accident. Within a few minutes, the assessment and the cost are given to the customer, which they can either accept or reject. If the assessment gets accepted, the payment is made within 15 minutes directly to the customer’s bank account.
In the absence of AI, these photographs were assessed by claim officers, and it was a tedious and manual jobs, as they took a few hours to assess the damage. With the AI-based app, the list of damaged parts is generated within minutes along with a cost. It is now much more convenient for claim officers, as they are now in a better position to justify the assessment to the claimant. The acceptability of claim estimate has risen to over 75 per cent. Moreover, the accuracy of the model has gone up beyond 80-85 per cent. Currently, out of all the QCS (Quick Claim Settlement) that the firm settles for personal cars 33 per cent are through AI.Going forward, the company plans to use AI for pre-inspection where break-ins occur.
A big untapped segment of the hyrbrid cloud market augurs well for a firm like IBM. “In India, our cloud business is growing double digit with areas like data and security solutions being the key drivers. We are seeing increased adoption across industries with both enterprise and mid-sized clients in BFSI, telecom, manufacturing, automobile, retail and distribution sectors taking the lead,” states Bajwa.