After months of build-up and market anticipation, the IBM InterConnect event got kick-started here at Royal Sentosa Resorts on Sentosa Island in Singapore, and after a quick introduction by IBM growth markets executive John Dunderdale, IBM senior vice president Steve Mills hit the stage and outlined the core value proposition behind the event and, more broadly, behind IT circa 2012.
IBM senior vice president Steve Mills explains to the gathered IBM InterConnect 2012 audience in Singapore Tuesday morning the immense opportunity and value that a reconsidered IT investment strategy presents for its customers around the globe.
"We know all of you involved in running businesses are challenged with delivering outcome and results," said Mills. "We clearly love technology, but the end goal is improving your business and business model."
Delivering real, discernible business outcomes. IT as a means to an end, not an end in and of itself.
Mills's talk, entitled "Smarter Planet Solutions increasing Demands of IT," then went on to explain and support that core thesis for the next 40 minutes, along the way sharing some eye-opening sound bytes and anecdotes.
Mills indicated that the IBM InterConnect event was designed "to give you more insight and more contacts and relationships that you can take advantage of to support your businesses."
So yes, there would be plenty of best-practices and lessons learned to come, but this convocation was also an opportunity to share and network with your peers and colleagues.
Information technology: a transformative tool of the past 60 years
Then Mills began to provide a big-picture backdrop of IT, explaining that "technology is the transformative tool of the last 60 years, and no tool has ever done so much for humans as IT."
But, Mills warned, we humans "sometimes get out ahead of ourselves," and we become enraptured with the tools instead of focusing on what we can do with those tools.
The core questions, Mills went on to explain, that IT and business executives everywhere should be asking themselves is, "How do I use IT effectively, and at a price my business can afford, and in a way I can measure those discernible outcomes?"
Anything else, my own thought bubble indicated, is nothing more than snake oil off the back of a covered wagon!
Mills then went on to explain the specifics behind the IT challenge. More servers, more users, more scenarios... more everything except, perhaps, more money and people!
Moving away from mundane administration and towards increased business value and innovation
And therein lies the core of the issue. So much technology requires management and administration and focus by humans. And yet, oftentimes we're not even making full use of the IT we have.
By way of example: There are an estimated 32.6 million servers worldwide, but 85 percent of them are often idle, and 15 percent run 24/7 without being actively used.
They're also energy hogs -- datacenters alone have doubled the energy use in the past five years, and most expect an 18 percent increase moving forward in datacenter energy costs.
And all the numbers trend upwards, Mills noted: Between 2000 and 2010, servers grew 6x and storage 69x, so if what's past is prologue...
But it's not even just that, all the growth we've witnessed in IT hardware and software. All of this has a cumulative effect -- it's not simply the money you spent in the current year, but in ALL the investments you've made over an extended period of time.
IBM senior vice president Steve Mills explained to the IBM InterConnect audience in Singapore earlier today the opportunity for organizations around the globe to break through the IT budget and resource barrier and realize new business insights and outcomes through an increased focus on innovation.
Though IT has been a big labor saver on the one hand, it's also been a very expensive proposition in that it requires new skills and labor to manage. And that was another core point of Mills's argument, that that labor cost has grown to a size to where we need to bring the overhead down while striving to increase the value IT delivers.
An explosion of big-data... and big insights!
Mills went on to note there's also been an explosion of data and information. Google alone processes 24 petabytes of data in a single day, the New York Stock Exchange 1 terabyte of trading data in a single session.
What if... you could apply intelligent analysis to all that information, with an eye towards being more predictive... what if... you could be just 20 minutes ahead of your time... then what could you do???
Finding patterns in data that a single mind could never see, but with the right computing capacity...
So, both burden and opportunity, and this IT overload presents a management challenge -- businesses want to be able to do more with what data they have, but they're uncertain if they're really getting to what the analysis could actually bring them.
Now, to the actual economics: IT operating costs were expected to have grown from $100 billion in 1996 to an estimated $217 billion in 2012, a trend NOT going in the right direction.
But as Mills explained, "The more servers you have the more servers you have to feed." Yet that spend on mundane tasks like server administration means you have to rob Innovation Peter to pay Administrative Paul.
All that sprawl, Mills detailed, means costs to manage growth of inventory consumes the IT budget, and in turn, only 1 in 5 organizations is able to allocate more than half its IT budget to drive innovation.
As it is, 23 percent of new IT projects deploy late, and 55 percent experience application downtime for major infrastructure upgrades once deployed. Top causes of project delays include troubleshooting and tuning production environments (45%), and integration, configuration, and testing of applications (41%).
To add insult to injury, security incidents add an additional layer of complexity and frustration here: The average cost per data breach in 2011 was $3 million, figured in terms of lost customer loyalty.
These, Mills concluded, are the challenges that lay before you, the global IT audience.
Through the remainder of the event, and via several announcements emerging this week in Singapore, Mills suggested IBM would aspire to play a key role in helping clients address the velocity of change in business and IT, and help them redouble their efforts to garner those desired business outcomes.
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