IBM Ends 2014 with Flurry of Outsourcing, Cloud Activity

Happy New Year. There is much to look forward to in 2015. At the least it probably is time for IBM to rev the System z. The zEnterprise EC12 was introduced in Aug. 2012. You should expect a new machine this year.

ibm cloud centers

IBM ended the year with a flurry of deals involving outsourcing in various forms, hybrid clouds, and the expansion its cloud centers globally. The company made it clear throughout this past difficult year that its focus will be on cloud computing, analytics, and mobile, and that’s what they did. DancingDinosaur will leave to the Wall St. analysts the question of whether the deals represent enough action at a sufficient margin.

IBM believes its future rides on the cloud. To that end it writes: Enterprise cloud deployments, specifically hybrid cloud, are growing at a significant rate.  According to Gartner, nearly half of all enterprises will have a hybrid cloud deployed by 2017.  Chief among the driving forces behind the adoption of cloud computing worldwide, including hybrid cloud, are requirements for businesses and governments to store certain data locally to comply with data residency regulations, as well as a growing desire for startups to expand their businesses globally.  IBM estimates about 100 nations and territories have adopted laws that dictate how governments and private enterprises handle personal data.

The expansion of the company’s global footprint of its cloud centers, now up to 40 locations, represents an effort to capitalize on cloud interest. Since the start of November, the company announced more than $4 billion worth of cloud agreements with major enterprises around the world. These include Lufthansa, ABN AMRO, WPP, Woox Innovations, Dow Water, and Thomson Reuters. Some of these, you will notice, are mainframe shops. DancingDinosaur is assuming they are augmenting their z with a hybrid cloud, not replacing it.

In addition, there are new organizations, referred to by IBM as born-on-the-web innovators, which are building their business on the IBM Cloud. Since November, IBM has announced wins with Diabetizer and Preveniomed, Hancom, Musimundo, and Nubity. Collectively these wins reflect IBM’s ability to deliver a full range of services through the cloud. Some of these are analytics-driven wins.

An interesting recently announced win was Westfield Insurance, which began working with IBM to transform their claims operations. To this end, Westfield is looking at business analytics to increase flexibility, operational efficiency, and effectiveness while enabling the company to keep pace with its evolving customer base and business growth. When DancingDinosaur last checked, Westfield was a z196 shop running DB2.

As IBM reports, leading insurers are leveraging cloud, analytics and social technologies to stay ahead of their competition. Specifically, more than 60% of identified leading insurers are focused on advanced analytics to improve their claims handling in order to streamline processes and increase customer satisfaction. Westfield’s multi-year claims handling transformation initiatives, including process, organizational and technology changes, focus on using data and analytics to better serve customers.

For Westfield, IBM developed a new protocol to migrate data for use with predicative models, built simulation models to evaluate bottlenecks in the claims process, and designed a strategy for expedited workflow.  This simulation helped expedite organizational changes. The new claims system will also utilize a suite of IBM counter-fraud capabilities to detect suspicious activity.

In addition, IBM helped Westfield optimize its current claims handling process to provide a seamless, fully-integrated customer experience. Westfield’s claims system with Guidewire is now consolidated to ensure efficient operations across its network.

To further drive its cloud business IBM simplified its cloud contract with a goal of reducing the complexity and speeding the signing of cloud agreements. The result is a standard, two-page agreement that replaces the previous longer, more complex contracts, which typically entailed long negotiations and reviews before a deal was signed. By comparison, its cloud competitors require customers to review and commit to more complex contracts that commonly are at least five times longer and also incorporate terms and conditions from other websites, IBM reports.

Citing leading industry analyst firms, IBM claims global leadership in cloud computing with a diverse portfolio of open cloud solutions designed to enable clients for the hybrid cloud era. IBM has helped more than 30,000 cloud clients around the world. It boasts of over 30,000 cloud clients, invested more than $7 billion since 2007 in 17 acquisitions to accelerate its cloud initiatives, and holds more than 1,560 cloud patents. IBM also processes more than 5.5 million client transactions daily through its public cloud.

IBM’s initiatives in cloud computing will not diminish its interest in the System z enterprise cloud platform. To the contrary a recent IBM analysis shows the z enhancing the economic advantages of the cloud: a business scaling up to about 200 virtual machines (VM) gets far more efficient and economical results by using the Enterprise Linux Server as an enterprise cloud than with a virtualized x86 or public-cloud model. And the deal gets even better if you acquire the Enterprise Linux Server under either the Solution Edition program for Enterprise Linux  or the System z Solution Edition for Cloud Computing.

DancingDinosaur is Alan Radding, a longtime IT analyst/writer. Follow DancingDinosaur on Twitter, @mainframeblog. Check out more of his work at Technologywriter.com and here.

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