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The decision by IBM’s Systems and Technology Group (STG), to launch a new Systems Software Business Unit (BU) was one of the more significant announcements in what was inarguably a jam-packed Analyst Summit. Helene Armitage, who will serve as General Manager (GM) of System Software noted that it aligns perfectly with IBM’s broader strategy in hardware, services and networking, stating that “Systems software is the integrating force in the data center. Virtualization is the foundation of the data center and management is the backbone [of the data center]. The Systems Software Business Unit is a key STG growth engine and it will enable us to deliver value across all IBM hardware plans.”
The Systems Software Business Unit will provide the integration framework for STG and act as the glue that enables seamless end to end virtualization and platform management and other capabilities. Systems Software covers some 160 products including: management, energy, security, availability, operating systems (OS) and virtualization. According to Armitage, IBM recently conducted a study with over 200 of its corporate clients on virtualization and management and found that clients are strategically investing in their IT infrastructure to drive business value.
IBM’s findings track closely with the results of ITIC’s 2009-2010 Virtualization Deployment Trends Survey conducted in August and the 2010 IT & Technology Trends Survey which polled 500 businesses worldwide in December 2009. The results of both surveys revealed that upgrading server hardware; deploying server virtualization software and deploying new applications in support of business objectives were among the top three IT spending priorities for 2010 for nearly 50% of the survey respondents.
Additionally, the 2009-2010 Virtualization Deployment Trends Survey revealed that almost 30% of businesses will undertake a private or public cloud computing initiative over the next 12 months. This makes virtualization management and fast, efficient, reliable service and support imperative. The results from both ITIC surveys both emphasize that C-level executive managers and IT departments strongly base their purchasing decisions on doing business with vendors who have a track record of superior technology, service and support.
From this standpoint, Armitage said IBM is perfectly poised, via its comprehensive System Software product portfolio, to address the shift from purely physical management to the integration of physical and virtual systems, storage and network resources. IBM, she said is adapting as the business needs of its corporate customers similarly adjust “to optimize energy usage, maximize resource utilization and keep the corporate data assets secure.”
Armitage acknowledged that IBM has not been in the “industry conversation on virtualization,” but said that Big Blue aims to change that in the coming months to be more visible. To accomplish this IBM will focus on a number of key areas including: physical consolidation; virtual system pools; integrated service management and cloud computing.
Armitage noted that the 200 corporate clients that participated in the aforementioned IBM study are using cloud computing as an access model. The goal of STG and the new Systems Software group is to help corporate customers unlock more value in virtualization than they are currently realizing. To accomplish this, the company will deliver products, tools and services that will assist customers in automating and optimizing, Armitage said.
IBM’s just released Systems Director version 6.1 is one of the lynchpins in the company’s strategy and is designed to run as a standalone product. Though the Systems Software BU and IBM’s Tivoli group exist and operate independent of one another, they do share a joint design and architecture team which have agreed upon APIs. “It’s not quite a joint development team,” Armitage said, “but there is a strong collaborative effort between System Software and the Tivoli team,” she said.
IBM Systems Director Software v 6.1 provides businesses with single point of control to manage all aspects of their data center operations, and integrates best-of-breed IBM virtualization capabilities to provide faster, more efficient means of ameliorating the management of physical and virtual platform resources. Systems Director 6.1 incorporates a singular user interface (UI) to perform common tasks and also delivers a consistent and unified view of the IT environment in its entirety, including servers, storage and network assets. Corporations can use Systems Director as a standalone tool or in conjunction with IBM’s Tivoli to reduce data center management tasks and expense.
Armitage said that IBM will ship Systems Director v 6.1 with every server. Initially however, the Systems Software Business Unit’s revenues will not appear as a separate line item but will be incorporated into IBM STG’s overall sales figures.
IBM’s decision to launch the new Systems Software BU within STG has both short term tactical and long term strategic impact and implications for IBM and hardware customers. Most immediately, it will enable IBM to more comprehensively and cogently address the business and technology needs of its tens of thousands of enterprise customers who are deploying or plan to deploy, virtualization and cloud computing environments. Given that virtualization and cloud computing are two of the hottest emerging technologies, IBM’s move is an excellent one for the immediate, intermediate and long term.
Additionally, networks are growing in size, scope and complexity even as the economic downturn keeps budgets and resources tight. Organizations are more than ever seeking guidance from their vendors. And those vendors that deliver on promises and provide such guidance will reap the rewards of continuing and expanding opportunities. IBM has a proven track record of delivering leading edge technology and superior technical service and support. The latest ITIC survey data found that 77% of organizations rated IBM service and support “Excellent” or “Very Good.”
In order to fully realize the potential of this unit and deliver the hoped-for value to customers, Armitage and her team will have to work hard to carve an identity for Systems Software . IBM is certainly providing its installed base and potential customer base with added value by shipping Systems Director v 6.1 loaded onto every server. However, the product must be accompanied by a strong marketing plan as well as the appropriate accompanying documentation and training materials to assist cash strapped and resource-constrained IT departments in unlocking and maximizing the potential of this software tool. It is crucial for STG and the Systems Software BU to rise to this challenge and distinguish the new unit within the next six-to-nine months as organizations begin to earmark their 2010 corporate expenditures.

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