SHOMI, Part 5: The Most Influential Technology Vendors in the Manufacturing Industry

06/13/2008


Those of you that are familiar with Manufacturing Insights research themes will recognize the SHOMI (pronounced 'show me') acronym, which is shorthand for the most influence technology vendors in the manufacturing industry: SAP, HP, Oracle, Microsoft, and IBM. These vendors are providing products to optimize operations through technologies like virtualization, Web service based integration, collaborative decision making, and business network automation.
This is the fifth installment of a of five part series covering each of the vendors. This installment will cover IBM .
IBM– Global Integration from the Market Leader
The sell off of the desktop/laptop business to Lenovo has narrowed IBM's market lead in the manufacturing segment. That said, the breadth of IBM's products—from hardware to software to services—is impressive and their knowledge of the industry unmatched. They have augmented products traditionally targeted at IT with capabilities to support the operation of complete business processes, which is unique among the SHOMI vendors.
The ability to quickly stand up a business process, on a worldwide basis, allows IBM to support the need for manufacturing firms to become globally integrated. The concept of the globally integrated enterprise will be a key theme for IBM going forward and you can expect clear alignment of their products and services whether you will standardizing processes yourself or looking to outsource.
The IBM partnership ecosystem is vast. In addition to the tens of thousands of resellers and developers, IBM has significant partnerships with all of the other SHOMI vendors except HP. They have been successful in connecting with others like Google and have had well publicized support of open source technology like Linux and industry standards like web services.
Architecture– WebSphere of Influence
IBM's roots are in the data center and servers remain a key source of revenue for the company. Its Tivoli line of products has helped manufacturing firms lower their operating costs while improving service levels. Data that suggests the cost of power is now surpassing the cost computing cycles is being used as a trial balloon to rationalize a resurgence of mainframe based investments (on the premise that mainframes are inherently more energy efficient). Manufacturing Insights believes that the logic is a bit contrived, but buyers will continue to pursue optimization and are fairly agnostic to the delivery mechanism.
At the industry process platform level, IBM's venerable DB2 and WebSphere product lines have significant presence, although no where near dominant, in manufacturing. WebSphere has suffered a bit from product proliferation and IBM must take a hard look at how best to rationalize the line and make it a viable alternative or complement to NetWeaver, Fusion, or Microsoft's architecture. Independent software vendors have always been the key channel for this stack and, at the enterprise level of the market, IBM has been cut off by SAP's independence and Oracle's acquisition spree. Second tier application providers have been attracted to the IBM stack, but more in hopes of getting much needed marketing support and IBM may have to consider getting back in the application business if they are going to protect this channel.
Manufacturing Insights would like to see IBM more aggressively promote its capabilities in the collaborative decision environment domain. The recent acquistions of FileNet for unstructured content management and Cognos for business intelligence complements the existing data organization capabilities of DB2 and the services organization competencies in creating complex analytic applications. As to adding the critical collaborative capability, IBM has invested in new messaging and social networking capabilities for the Notes product line, but the installed base in manufacturing is waning and IBM will have to make sure they have partnerships in place.
The ability to support the creation of multi-enterprise business networks is an area of great promise for IBM. Their own vast data center capabilities combined with the recently announced partnership with Google should make IBM formidable in delivering the corporate cloud. And when the infrastructure is combined with the deep vertical expertise available in the services organization as well as its ability to take on processes itself, IBM should benefit from helping companies bring this concept to fruition.
Supply Chain– Global Integration Meets Demand Driven Fulfillment
IBM remains amongst the foremost supply chain consulting powerhouses with almost 7,000 consultant around the globe. Their focus is increasingly on the globally integrated supply chain leading to a transparent and fully integrated global enterprise. Although they have an emerging applications business built on their WebSphere platform, IBM has excellent working relationships with many of the big ERP vendors, as well as with many of the supply chain execution best-of-breed software vendors.
IBM is well positioned to advance their vision of the Demand Driven Supply Chain, particularly given their expertise in Point-Of-Sale (POS) based replenishment, Sales & Operations Planning (SOP), and Inventory Optimization processes and techniques. As with the other players in the vendor market, IBM articulates well their view of event management in the context of‘the right information available to the right person at the right time’.
This is a supply chain vendor who clearly understands the need to define business metrics before technology engagement, and their heavy involvement with SCOR supply chain process modeling techniques gives them a singular point of view on process redesign and the information-enabled supply chain.
Global integration is a big theme with IBM, particularly around the globally integrated supply chain and the management of global procurement and global logistics. In our 2008 supply chain predictions, we talk about‘low-cost country sourcing’ versus ‘profitable proximity’ and the challenges that face businesses in managing globally deployed and diverse supply networks. IBM clearly understands this, both in the development of their own tools and applications, and in the business process redesignwork they do through consulting engagements.
Product Lifecycle– Innovation Covered
IBM has a long-standing partnership with Dassault and sells Dassault tools under the IBM brand. IBM also has first-hand manufacturing engineering and execution experience, especially in high tech. Joint development, often in technologies/products that customers tend to trust only with few partners, continue to increase this capacity.
In addition to the IT-side of PLM, IBM also takes the "high end" side of PLM and provides product development and R&D consulting services by devising R&D and innovation strategy as well as improving R&D efficiency, portfolio management, and collaboration.
In many companies, PLM is still a federated environment of loosely coupled tools. As organizations move to a more centralized enterprise, IBM will bring the complex and abstract processes such as ideation and managing R&D like a business closer to the PLM core.
Emerging agenda - Staying in the Middle, and Pushing for Thought Leadership
IBM's RFID strategy is one that mixes caution and optimism, somewhat of a middle ground approach, with enough of a product (and project) leadership to warrant drawing RFID partners into the fold (and its RFID Solution Centers). For example, the WebSphere RFID Premises Server interfaces with eight data capture device manufacturers via the IBM supported Eclipse open source development model. And IBM WebSphere RFID Information Center version 1.1 is fully compliant (and certified) with the EPCglobal EPCIS standard. But until companies ramp up their demands for RFID, we expect IBM to remain fairly low key in its RFID strategy in 2008.
In contrast, IBM will be much more visible on the topic of sustainability in 2008. You may recall our subtitle for our emerging agenda section for HP was also "Pushing for Thought Leadership". IBM's strengths in consulting and services place it squarely up against HP in a fight for thought leadership in sustainability. First, there's the very catchy IBM "Project Big Green" focused on increasing the level of energy efficiency in IT. Where we expect IBM to really stand out and push up against HP is in its application of sustainability within its consulting and strategy services. The other good news is that IBM, like HP, already recognizes that sustainability is about much more than Green IT. It's also about IT for Green in the supply chain and PLM. Look for IBM and HP to be the leaders in showing large enterprises the role that IT can and should play in sustainability.
Advice to Users– Bring a Navigator to the Relationship
If the good news is that IBM brings vast resources to bear to help you deliver value, it is also the bad news because navigating the portfolio can be hard for IBM employees and nearly impossible for the buyer. This isn't a new criticism and IBM has done a lot of work at the industry level to match specific needs to the right set of products although, so far, the effort has been more directed at how they go to market rather than how they serve the customer. An IBM relationship should be a valuable one so insist on an executive sponsor– somebody who is incented based on your satisfaction not on your sales – that is capable of understanding your roadmap and bringing the right resources, both within IBM and externally, to deliver on your requirements.
What are your thoughts? Are there additional strengths or weaknesses in the IBM approach? Feel free to e-mail your comments and questions to bparker@manufacturing-insights.com .





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