In August 2010, IBM acquired Coremetrics, a leader in Web analytics software, and the move was expected to expand IBM’s business analytics capabilities by enabling organizations to use cloud computing services to develop faster, more targeted marketing campaigns.

IBM has now announced its new Smarter Commerce initiative – primarily exploiting Coremetrics products along with WebSphere suite – that transforms how companies manage and swiftly adapt to customer and industry trends across marketing, selling and service processes that that span the entire commerce cycle, putting the customer at the center of their decisions and actions.

IBM estimates that Smarter Commerce would be a new market that will grow to $20 billion in software alone by 2015. Craig Hayman, General Manager, IBM Industry Solutions says “Customers use social networks, mobile devices, Web sites and influencers to make buying decisions today. Businesses must connect to these customers where and how they prefer to buy to be successful.”

IBM states that by using Smarter Commerce First Tennessee Bank improved the success rate of its marketing campaigns by more than 3% in turn getting an ROI in the software of more than 600%.  

IBM’s new Smarter Commerce software offerings include:

• Advanced Analytics – WebSphere Commerce and Coremetrics web analytics enable organizations to measure the effectiveness of their marketing campaigns, call center performance and cross-selling initiatives and understand the shopping habits, likes and dislikes of their customers.
• Cross-Channel Commerce -Integration of Coremetrics Intelligent Offer and WebSphere Commerce, enabling organizations to gain immediate insight into online buying trends.
• Social Business – Coremetrics Social Analytics with WebSphere Commerce provides real-time intelligence on what customers are saying about products, content and services being offered to them, and enables organizations to make fact-based, accurate decisions about marketing expenditures.
• Cloud Computing – The new Cloud Analytics Software Coremetrics Lifecycle is expected to help marketers in making the most of their interactions with prospects, across all channels (email, advertising, search marketing and social media). The real value is that all these to be based on real customer behavior and no longer guess work. Coremetrics Lifecycle can also help organizations determine which of their marketing programs and strategies yield high-value customers in a efficient manner – and plan for budgets for every stage of customer development cycle (acquisition to retention). The insights gains from Lifecycle enables business to enhance every online customer experience with targeted interactions.

The initiative is better summed up in the words of John Squire, Chief Strategy Officer, IBM Coremetrics, “IBM is driving the transformation of online marketing into a useful, consumer-facing service that drives business results. We are dedicated to delivering capabilities that equip marketers with analytics-based insight into how customer lifecycles speed up or slow down over time, benchmarking current results against previous ones and laying the foundation for consistently smarter marketing”.

Gartner’s report on 2011 IT Predictions – http://www.gartner.com/DisplayDocument?ref=clientFriendlyUrl&id=1476415 – highlights that there would be significant changes in the roles played by technology in business, the global economy and the lives of the individual users.

The key theme of “ITs Growing Transparency” (as pointed out in the title of the report itself) is demanded and it requires IT to be more tightly coupled to governance and business control. The compliance requirement of IT expenses and financial goals will impact internal operations and the structure of contracts with suppliers and providers and more specifically cloud services providers.

The daily function of businesses, governments, economies and our individual lives depend on IT and this dependence gives rise to the prospect of technology being used to attack, disrupt and damage the nation states in which we live and work. IT could be wielded as a weapon with potentially catastrophic results. Defense reviews by government agencies across the world continue to highlight the growing risks of “cyber war,” and attacks against some nations have already occurred. The first prediction highlights this worrying trend.

The original theme of cost savings in IT is extending to make “Demonstrable support for revenue growth” as a primary IT objective. Governments and organizations of all sizes are obliged to re-evaluate the relationship between IT spending, operating budgets and revenue in much finer detail now aimed at understanding of how IT investments affect revenue and future prospects (no longer just a cost cutting measures).

Consumerization of IT is no longer a phenomenon to be contained or resisted.  The attention of users and IT organizations to shift from devices, infrastructure and applications – and focus on information and interaction with peers. And this change is expected to herald the start of the post-consumerization era.

The following are the predictions per se:

1. ITs Global Role – By 2015, a G20 nation’s critical infrastructure will be disrupted and damaged by online sabotage.

2. Revenue Growth – By 2015, new revenue generated each year by IT will determine the annual compensation of most new Global 2000 CIOs.

3. Costs and Investment – By 2015, information-smart businesses will increase recognized IT spending per head by 60%. By 2015, tools and automation will eliminate 25% of labor hours associated with IT services.

4. External Assessments – By 2015, most external assessments of enterprise value and viability will include explicit analysis of IT assets and capabilities.

5. Accountability - By 2015, 80% of enterprises using external cloud services will demand independent certification that providers can restore operations and data.

6. Expanding Markets – By 2015, 20% of non-IT Global 500 companies will be cloud service providers. By 2015, companies will generate 50% of Web sales via their social presence and mobile applications.

7. User Productivity – By 2014, 90% of organizations will support corporate applications on personal devices. By 2013, 80% of businesses will support a workforce using tablets.

8. Society – By 2015, 10% of your online “friends” will be nonhuman.

Of the above, I believe points 2, 5, 6 and 8 are more interesting and relevant to the newer trends. Have tried to cull out the important points to be noted, especially related to these specific predictions.

Post recession, capital markets tend to reward companies that report organic growth in revenue (rather than cost cutting). Sustained period of economic recovery is impossible without Revenue growth from increased customer demand. CIOs wanting to make “information” just as important to their mission as information “technology” can expect many new demands in the new decade.

The following four IT-enabled initiatives are the ones with potential to deliver increased enterprise revenue:

1. context-aware computing
2. Pattern-Based Strategies
3. social networks and
4. the channeling of IT staff innovation toward enterprise product development .

Analytics is moving to the next level of maturity and skills that would help in uncovering trends and opportunities – and don’t miss the meaningful shifts in customer sentiments and preferences are the ones to be invested on. Understanding and explaining human behaviours – how people react to one another in different cultural settings – would help both business and governments.  Gartner recommends that CIOs devote 50% of the R&D and training budgets toward funding social science education – sociology, anthropology, cognitive psychology and ethnomethodology – for staff.

Cloud services are highly risk prone and require a high level of security functionality and the fault-tolerant mechanisms of the providers are over blown. Data loss is a higher risk in cloud than the data security which is now focused upon.Each individual user cannot be expected to determine if the service meets the security, regulatory and business continuity requirement. But unless the buyers feel confident, cloud computing cannot reach its full potential.

Third party “certification” model with highly skilled risk assessors is the practical solution available. Existing certification like SAS 70 are not adequate and doesn’t provide evidence of security and data recoverability and mostly misused by suppliers today.

New cloud specific certification programs involving the US and European Union governments and cloud industry consortium is the step in the right direction. Gartner also points out that the need and benefits of standards like FedRAMP, Trusted Cloud Initiative, BCM standards such as BS-25999, ASIS SPC.1-2009 and NFPS will not become more apparent until there have been several prominent instances of unrecoverable data loss events (hoping that it doesn’t turn out to be the case).

In any case, it is advisable for organizations looking at cloud to not do away with traditional disaster recovery mechanism, such as offline backups, at least till the time that Cloud is more proven.

Prediction 6 is the most interesting and in a way highlighting a whole new world of opportunities. Cloud computing is removing the historical barriers for non-IT companies to provide IT related competencies – and these non-IT service providers may directly compete with IT organizations. Businesses will start understanding the principle that cloud computing is a means to deliver “IT-enabled capabilities” and not just “IT capabilities”. Hyperdigitization of industries like financial services, education, communications and media, government etc. would add fuel to this trend.

According to a consumer survey, shopping is the third-largest activity for consumers on the Web (and social activities form the eighth largest). By 2013, the installed base of web capable mobile phones and smart phones will surpass the ones of PCs and Laptops. Organizations are re-investing in their e-commerce capabilities (both B2B and B2C) to increase sales via SMS, mobile Web browsers and applications.

The mobile device has the most potential of any channel to provide “in context” offers to customers because of its access to identity (e.g., calendar), environmental (e.g., GPS location), process (e.g., wish list) and community (e.g., Facebook friends) information about the mobile device user. Organizations should move to a context-aware promotions model that leverages information about the mobile and social user.

The Web continues to evolve in the social dimension, where every website is becoming a social site, and every social site is evolving toward a social platform. Social media strategy involves several steps: establishing a presence, listening to the conversation, speaking (articulating a message), and, interacting in a two-way, fully engaged manner. Most efforts at social engagement are handled manually which is hard to scale. Some e-commerce sites have fully or semi-automated live chats, providing canned answers to questions, and redirecting as necessary to a human operator.

In 2010, large organizations embarked on systematizing the act of listening – monitoring social media conversations in blogs, social sites, forums, and more. Nigel Lack, a software developer created a global warming chatbot (a program that chats) and some users have conversations with it spanning dozens of tweets over a period of days.

Progress in artificial “intelligence” in the classic aspect of linguistic processing, semantic knowledge and logical inferences, and also in the area of “emotional intelligence” would make conversations appear even more natural. By 2015, efforts to systematize and automate social engagement will result in the rise of social bots – automated software agents that can handle, to varying degrees, interaction with communities of users in a manner personalized to each individual.

Today, average user of Facebook has 120 to 150 friends of which some have never met and this situation is treated as natural. A next step in the evolution of online interaction is to have software bots as friends. In some cases, users will be aware they are dealing with a bot, and will find this acceptable.

The conclusion seems to be “Virtual is Real!”.

Business-IT Alignment has long been recognized as the key for effective use of IT and we have gone through various stages – Standardization, Rationalization, COTS, ERP and SOA – to achieve this and it still remains elusive.

Cloud computing is the next panacea looked upon by all Enterprises. The success of cloud in SMB has been very encouraging and it would be indeed a mistake for Enterprises not to look at this option to achieve their objectives. Pay as you use (that allows effective use of resources in a cost sensitive fashion) and the seemingly unlimited availability of resources (allowing unlimited scalability and ability to handle unexpected spikes) are the benefits that cloud has to offer.

In addition to the public cloud (shared with others), there are options like Virtual Private cloud and even having a cloud within the enterprise, the real benefits of Cloud is achievable only when IT can be treated like any other utility – Electricity or Water. Though it will take years for IT to reach that level of maturity to be strictly treated as “commodity”, from enterprise perspective IT can now itself be treated as commodity by shifting the responsibility of development, operations and maintenance to a third party and retaining only the capabilities and SLA definition and adopt effective vendor management.

When Enterprises start considering Cloud as an option, it is advisable that they look at Commoditization of IT also. Rather than trying to offload the current IT setup into a cloud only for infrastructure usage (which has limited advantage) and the other extreme of trying to change the business process to fit the vendor provide services (which could be difficult and painful), a well thought-out process of commoditization of IT would be useful in the long run. In addition to help exploiting cloud and even providing certain level of protection again “vendor lock-in”, this could lead the way for the elusive Business IT alignment.

In today’s dynamic environment, boundless Agility and infinitesimal Time to Market are vast becoming essentials. Commoditization of IT, the next logical step for IT, is required to ensure that IT doesn’t become a drag on the Enterprise but rather the one that enables enterprises soar to new heights.

Commoditization need not be looked upon as a bad word by the IT personnel either – as it would essentially bring new opportunities and new challenges, as it would free up the resources for better and more important work (rather than handling the less important but urgent work).  In a way, the impact would be similar when Assembler no longer was the programming language of choice, when Database started coming up with autonomic (self-healing) capabilities. As in these cases, the change would mean that the IT personnel would be relieved from purely technical, repetitive jobs and need to focus on better aspects of making IT align with business drivers. In reality, Application development has undergone a sea change in the past decade - and today most applications are created by assembling parts and even released as Beta and continually changed to meet business needs.

In various surveys on IT conducted with CIOs, it is invariably the majority view that the significance of IT and the IT headcount would grow rather than diminish. Typical comments include “business-centric IT would remain in-house”, “IT that directly impacts competitive advantage, cost savings, and process optimization will grow”, “internal IT focus and cost would shift from servers, storage to network and security”, “while numbers of traditional application developers and operations personnel may reduce, the need for Subject Matter Experts (SMEs) would rise”.

Also the expectation from IT personnel is moving towards strategic aspects like revenue generation, enabling business to deploy technology that brings it competitive advantage, manage vendors ensuring SLAs on key applications and services, ensuring legal compliance across the globe, improving globalization and time-to-market.  

When an enterprise looks toward adopting cloud, the tendency would be to arrive at a cloud strategy. But that could be short-sighted and trying to fit adoption of cloud based on what is offered by vendors today. Instead arriving at Enterprise level Architecture Strategy with “Exploiting Cloud today and in the future” as a key driver would be a better approach.

Enterprise Architecture’s key driver had always been Business-IT Alignment and irrespective of the level of maturity of EA in an enterprise, the Architects have been the bridge between the Business and the IT departments. With the ability of understand both these perspectives, and with the broad picture thus achieved, Enterprise Architects are best suited to bring in the next evolution of IT – namely the Commoditization, and exploiting the new wave of cloud computing, virtual appliances etc. The Standard EA approach of fixing up the target state, identifying potential candidates and establishing a well thought-out roadmap taking into considerations the current trends across industry adapts itself to this purpose.

IBM cloud offering CloudBurst – also called as “Cloud-in-a-Box” – is provided as an appliance which is self-contained and can enable cloud computing in Enterprise context. An appliance delivers the hardware, software and services that can be readily used with minimal configuration and hence easy to use and provide near-optimal performance. Considering the benefits of the appliance concept, IBM has delivered this fit-to-purpose, self-contained, fully installed appliance that can be used by just plugging in.

IBM CloudBurst appliance is an important component of IBM’s Smarter Planet initiative and was released in June 2009, and the current version is IBM CloudBurst ver 1.2. IBM CloudBurst is positioned for enterprise customers wanting to get started with a private cloud computing model. It aims to provide secure, reliable private cloud computing environment which is simple to setup.

IBM CloudBurst Appliance is built on the IBM BladeCenter platform with Linux xSeries as Operating system and VMware’s ESXi 3.5 embedded hypervisor on each blade inside a standard 42 U rack. It includes the software necessary to manage the hardware and virtual resources:

• Tivoli Service Automation Manager supports end-user-initiated provisioning and management of virtual servers.
• Tivoli Provisioning Manager enables automated end-to-end provisioning.
• A self-service portal interface for reservation of computer, storage, and networking resources, including virtualized resources.
• Prepackaged automation templates and workflows for common resource types like VMware virtual machines
• Tivoli Monitoring to manage OS, database and middleware servers.
• Integration with Tivoli Monitoring for Energy Management that assists efforts to optimize energy consumption for higher efficiency of resources.
• Integrated IBM Tivoli Usage and Accounting capability to enable chargeback for cloud services.
• ITDS (LDAP) and DB2 included providing directory service to cloud.

The optional items in CloudBurst are:

• High availability using Tivoli systems automation and VMWare high availability that can provide protection against unplanned blade outages and can help simplify virtual machine mobility during planned changes.
• Secure cloud management server with IBM Proventia Virtualized Network Security platform that protects the production cloud with Virtual Patch, Threat Detection and Prevention, Proventia Content Analysis, Proventia Web Application Security, and Network Policy enforcement.

The key features worth noting are:

• The service catalog that serves as a single repository of all cloud services enabling the end users to create, use and manage services on demand, without any specific IT knowledge or training.
• Supports ability to manage other heterogeneous resources outside of the IBM CloudBurst environment.
• Allows administrators to create and store images – snapshots of systems that are preconfigured for particular business purposes – that can then be deployed across the network to a target system.
• Provides various types of reports from the multiple software components to suit different purposes.

It is essentially a complementary product to IBM’s WebSphere CloudBurst Appliance. IBM WebSphere CloudBurst Appliance helps developers and operations personnel establish and deploy software images and patterns into a cloud environment and is like the “dispenser” of software environments into a private cloud. IBM CloudBurst offers a ready-made cloud environment into which these images and patterns can be deployed, and is designed to be used by an organization that doesn’t want to create a cloud environment using existing assets and is like the “recipient” private cloud environment.

CloudBurst can easily be customized to tune the cloud to special contexts, workloads or business requirements in any way the organization requires. Extensive use of virtualization, embedded service management system, rapid test environment creation functions and automated self-service features pave the way for organizations to generate more business value from IT operations than ever before.

According to Forrester, IBM CloudBurst is a definitely cleaner, better integrated and more efficient data center and could act as a fast path for enterprises who want to jump into Cloud computing. And the major hardware manufacturers have proven that their superior QA and integration capabilities can churn out known good configurations in high volume and at a lower cost than we can build them ourselves. But the potential vendor lock-in is a concern that needs to be considered.

Traditionally infrastructure comprised silos around hardware, software, storage, network which are standardized but needed lot of effort by the customer to make them work in an integrated way.  These integrated solutions from hardware vendors that deliver complete virtual infrastructure in a box is a giant leap, but to make effective use the enterprises should consider their virtualization maturity and try out these in development and test workloads before jumping to use them in production. And most clients seem to be taking this approach of caution combined with an interest to be able to reap the benefits that cloud computing is expected to bring.

IBM has been driving to improve DB2 utilization in the cloud and a series of announcements including the DB2 virtual appliance shows a trend where we can expect more. To quote IBM, its DB2 view of the Cloud Computing is “what technologies and business models can we bring to market to help our customers realize the promise of the Cloud Computing”. The promise of cloud computing is its potential to reduce costs and improve agility.

IBM’s target users for DB2 on cloud includes everyone – Developers, Startups, SMB, Enterprise, Service Providers, SaaS Vendors. Availability of no-charge DB2 options in cloud makes it worthwhile to start exploring DB2 in cloud.

IBM’s DB2 Strategy around cloud computing falls into four key points:

• Deliver key technologies to support its customers private cloud initiatives
• Partner with key public providers to fully integrate DB2 into the ecosystem
• Provide robust DBMS for SaaS vendors
• Offer terms and conditions and pricing to make DB2 the best DBMS for the Cloud.

Technically its threaded-engine Architecture that minimizes memory requirements and enables efficient use of multi-core processors used in virtualized systems, Autonomic features like Self Tuning Memory Manager that reduce administrative costs, Support for various development platforms like Java, .Net, PHP, Ruby on Rails etc. makes DB2 an excellent choice for cloud environments.

In cloud context being technically good is only one part of the solution. Cloud computing is expected to reduce costs, improve flexibility and enhance agility and unless these benefits are provided for success would remain elusive. IBM seems to be accepting this reality and showing its willingness to adapt and coming up with various licensing and pricing strategies.

DB2 support for Private cloud is centered on availability of optimized DB2 in Virtualized environments including DB2 virtual appliances, standardizing and enhancing DB2 server provisioning and automation features. The sub-capacity pricing (now available on all DB2 Editions) where the charges are based on the system usage and not the full-capacity of the hardware coupled with the option of licensing on a per-day basis provides the basis for cost-effective virtualization.

DB2 public cloud presence involves mainly partnership with leaders in the cloud space and includes:

• Amazon – public cloud infrastructure
• RightScale – Platform for cloud management
• Morph labs – Web application Hosting Infrastructure
• Corent – Rapid SaaS development
• Canonical – DB2 Virtual appliance running on Ubuntu cloud computing platform

Additionally, DB2 Enterprise Developer Edition is available in IBM Smart Business Development and Test Cloud.

DB2 in Cloud is available under a variety of pricing option. The free edition, DB2 Express-C is available at no cost but no IBM support. IBM points out that there is no limit on the database size or number of users making it an ideal choice for SME as well as developers. DB2 Express-C is easy-to-setup, easy-to-manage, and includes self-managing capability and also comes with the pureXML technology suited for Web 2.0 applications. For more scalable DB2 required to run large business database loads, customers would have to pay DB2 licenses.

Customers who already have a DB2 license can use it in the cloud with no additional cost and IBM would continue to support it. In between this free and perpetual license, various pricing options like pay-as-you-go, hourly usage fee, purchase optional DB2 support etc. are available.

IBM wants to position DB2 as the DBMS of choice for the SaaS vendors who aim at exploiting Cloud computing trend. The advanced autonomic features, technologies like Deep compression and pureXML coupled with attractive pricing is what IBM is betting on to achieve this.

DB2 in cloud – or for that matter any other Database – is not yet ready to handle mission-critical or I/O intensive applications. But there is a whole suite of areas that could right away start exploiting cloud – Prototyping, development and testing, periodically run applications (end-of-month processing or day end batch jobs), handling variable workloads without dedicating resources, database backups, databases for disaster recovery, Web 2.0 Applications.