While this is sort of a bummer story for Pivotal (we’d like to have this account), it has a good profile of American and their needs in it. All of which are representative of other large organizations, e.g.:
- Application types: “The first result is that the airline will migrate to the IBM Cloud some of its critical applications, including the main website, its customer-facing mobile app and its global network of check-in kiosks. Other workloads and tools, such as the company’s Cargo customer website, also will be moved to the IBM Cloud.”
- Managed data-centers/cloud: “The airline will be able to utilize the global footprint of IBM Cloud, which consists of more than 50 data centers in 17 countries, in addition to a wide range of application development capabilities.”
- Long-term planning: “We wanted to make sure that the cloud provider would be using Cloud Foundry and open-source technologies so we don’t get locked in by proprietary solutions,” Grubbs said. “We also wanted a partner that would offer us the agility to innovate at the organizational and process levels and have deep industry expertise with security at the core.”
- We want to do all the new meat-ware: “As part of this process, American will work with IBM Global Services to use IBM’s Garage Methodology of creating applications through a micro-services architecture, design thinking, agile methodology, DevOps and lean development, the company said.”
- Legacy, it’s how you got here: “IBM Cloud will help enable developers to build and change application functionalities for the airline’s customers. These customer-facing systems will be on the IBM Public Cloud, while American will maintain backend connectivity to other on-premise legacy and third-party systems, for true Hybrid Cloud functionality.”
- There’s a lot going on: “American Airlines and its subsidiary, American Eagle, offer an average of 6,700 flights per day to about 350 destinations in more than 50 countries. American has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C.”
TPM has one of his usual, great round-ups of IBM’s business:
For the full 2016 year, IBM’s revenues were off 2.1 percent to $79.85 billion, but its “real” systems business, which includes servers, storage, switching, systems software, databases, transaction monitors, and tech support and financing for its own iron, fell by 8.3 percent to $26.1 billion.
Changing the revenue mix:
IBM’s efforts to promote SoftLayer cloud and Watson cognitive computing, mobile and social and marketing software and tools, and security wares – what it calls its strategic imperatives – are almost filling in the gap left behind as the core businesses shrink. IBM wanted these strategic imperative businesses to reach $40 billion and 40 percent of revenues by 2018, and in this quarter it already hit the 40 percent mark, with $33 billion in revenues for 2016–as much because of its overall revenue decline as for the growth in these businesses.
And, some info on their hardware revenue:
IBM sold just over $8 billion in Systems products, and brought $934 million to the middle line as pre-tax income
Schroeter said that Linux-based Power Systems machines now drove 15 percent of revenues, and that is pretty good considering that two years ago it was a few percent of sales.
The market — defined as A.I.-related hardware, software and services — will surge from $8 billion this year to $47 billion by 2020, predicts IDC, a research firm.
Also, some coverage of Watson business models, including customized cocktail drugs, which I hear is a scary big business in the horizon.
And, there’s some IBM AI spreadsheeting you can fiddle around with:
IBM may have a chance to join that group. By 2020, IDC predicts, 60 percent of the A.I. applications will run on the platform of four companies: Amazon, Google, Microsoft and IBM.
UBS estimates that Watson may generate $500 million in revenue this year and could grow rapidly in the years ahead, possibly hitting nearly $6 billion by 2020 and almost $17 billion by 2022.
Having lived through The Great Cloud Forecasting era around the turn of the decade, my advice is: take all this with care, but enjoy the razzle-dazzle!
For the Sun: WTF? files:
Gerstner questioned whether three or four years from now any proprietary version of Unix, such as Sun’s Solaris, will have a leading market position.
One of the more popular theories for the decline of Sun is that they accepted Linux way, way too late. As a counter-example, there’s IBM saying that somewhere around 2006 you’d see the steep decline of the Unix market, including Solaris, of course.
If I ever get around to writing that book on Sun, a chart showing server OS market-share from 2000 to 2016 would pair well with that quote.
If you’ve read Stephen’s fine book, The New Kingmakers, you may recall this relevant passage:
In 2001, IBM publicly committed to spending $1 billion on Linux. To put this in context, that figure represented 1.2% of the company’s revenue that year and a fifth of its entire 2001 R&D spend. Between porting its own applications to Linux and porting Linux to its hardware platforms, IBM, one of the largest commercial technology vendors on the planet, was pouring a billion dollars into the ecosystem around an operating system originally written by a Finnish graduate student that no single entity — not even IBM — could ever own. By the time IBM invested in the technology, Linux was already the product of years of contributions from individual developers and businesses all over the world.
How did this investment pan out? A year later, Bill Zeitler, head of IBM’s server group, claimed that they’d made almost all of that money back. “We’ve recouped most of it in the first year in sales of software and systems. We think it was money well spent. Almost all of it, we got back.”
It’s been a name-your-own-price market for canny buyers of IBM and compatible mainframes for some time now, but according to the Wall Street Journal, Amdahl Corp is making it easy for even the meekest DP manager to turn into a hard bargainer: it is giving big computer buyers an Amdahl coffee mug and telling them it’s worth $1m if they just leave it on their desk when their IBM salesman comes to call.
Data from 451 Research’s Cloud Price Index suggests that IBM is missing a trick. By going all-in and baking SoftLayer with Bluemix, IBM would gain a leading position in the market in terms of completeness of services and global availability, as well as finally delivering a single user experience.
Owen over at 451 suggests that IBM hasn’t yet merged SoftLayer into Bluemix totally, missing out on a high ranking in cloud providers (by functionality, geographic availability, etc.). Also: “The company claims $10.2bn in cloud revenue, a growth rate of 46% Y/Y, and 20,000 new users per week.”
With Matt and Brandon fresh back from IBM’s InterConnect conference we talk about IBM’s announcements – mostly cloud related. It looks like IBM is doin’ alright, well, except for all those quarters of revenue decline aside, but maybe that’s the just what has to be stomached to evolve. We also discuss working with the corporate editorial desk and the concept of “serverless programming.”
SPONSOR: Get a copy of my free booklet on how to avoid screwing up your cloud strategy, “The Cloud Native Journey.” Check out the Cloud Foundry Summit, May 23rd and 25th – come talk with companies that are going cloud and sorting out their digital transformation strategies. Use the code CF16COTE when you register to get 20% off.
- If you like video, see this episodes’ video recording.
- Thanks to the two folks who asked for an advanced copy of my booklet. You can now lead-gen yourself to a get a copy of how not to screw up your cloud strategy.
- Writing PDF and copy at companies, being friends with the copy desk. Stacey and Adam are awesome.
- Traveling to Las Vegas. Aria vs. Vdara.
- IBM InterConnect – announcement round-ups from TechCrunch and Venturebeat.
- IBM OpenWhisk, Lamda, Google’s Lambda etc. Serverless programming.
- IBM looking to move Swift to the backend, seems like a good, strategic chance to make a “unique” stack.
- Meanwhile, Microsoft buys Xamarin. Miguel wins!
- Where do the leads go?
- Brandon’s DevOpsDays Austin talk…we hope.
- DevOpsDays Austin Jumbotron offer.
- IBM is at the adult table of public cloud.
- Throwing a raccoon.
- That my little pony resume
- Yahoo officially for sale? – “Put more plainly, Yahoo has hired bankers and lawyers to field offers that can be presented to the company’s board of directors.”
- “Containers in Dev vs Prod”
- BlackStone CEO says go long term
- Docker switching off Ubuntu as their standard – more opinion
- While Red Hat throws FUD at containers
- I kept expecting the robot to turn around and beat the dude
- Brandon: come to RSA Conference next week, in SF, at the IBM booth. Apple Health app doesn’t stink.
- Matt: Nifty TED Talk on flying drones
- Coté: CostCo clothes, Burma Biba shirts.
But what we had not fully processed – and perhaps no one else did, either – is that at that moment Software Group, for all intents and purposes, was gone except as an amalgamated category for financial reporting to Wall Street.
So suggests TPM in his coverage of Steve Mills retiring.
40 years at IBM, straight out of college. He built up the software group, then ended up managing hardware was well: the article says he was running $40bn of business for IBM. Also, he was an awesome interlocutor at analyst events: a fun character on the drama of the IT industry!
Source: IBM’s Steve Mills retires