Headline March 11, 2016/ ''' INFORMATION TECHNOLOGY *IN two-speed IT* '''

''' INFORMATION TECHNOLOGY 

*IN two-speed IT* '''

PAKISTAN   -the first honoured conceptual host of !WOW!  -the World Students Society,  and the entire  *Developing World*  will do well to remember:

That NOT only   -just the technology, and I am referring here to the total range-  is on the brisk move,  but so is, just about every single thing around it. 

*So very soon, it will be impossible to compete with  Cloud Offerings and Services*.  

IN THE EARLY 1990s,  -after corporate IT buyers had shifted from mainframes to more distributing forms of computing, such as- PCS and servers  

But the industry is once again, going through another wrenching change, which is in  many  ways more challenging: Instead of owning computers, businesses are increasingly renting computing services in the cloud.

To understand the depth of this shift,  consider mainframe computers in the context of IBM: 

These, combined with related software and services still generate-

24% of IBM's revenues and over 35% of its profits, according to Toni Sacconaghi of Stanford  C.Bernstein, a research outfit.

Mainframes are prime example of what consultants call  ''systems of record''. 

Banks, for instance, use them to manage customer accounts. But to keep the mainframe relevant, just recently, IBM launched a new model which is more of a ''system of engagement''.

One machine can process  30,000  transaction a second, and analyse and encrypt data in a instant. Such features come in handy in the age of the cloud  and its corollary, mobile computing : people increasingly do their banking and many other things on smartphones.

As corporate  IT  opens up to the outside world, the way in which it is developed, sold and used is changing too. 

Power is flowing from hardware engineers to software developers, the best of whom are in great demand.

It is no longer mostly chief information officers  [CIOs]  who hold businesses purse strings; by  2017  chief marketing officers will spend more on IT than their CIOs, reckons Gartner, a market research firm. 

Customers are no longer willing just to buy the latest technology; they want to pay for specific results, for instance for sales increases achieved by using analytics software.

All this means that the longer established hardware firms such as IBM, HP, ORACLE and SAP must rethink how they do business. 

They will have to offer a working environment that attracts younger people, develop new products together with their customers and become nimbler to keep up with more focused startups, say Ralf Dreischmeier of the Boston Consulting Group.

IBM had a late start mainly because it concentrated for far too long on its on its financial goals. Rather than getting ready for the new world, the firm continued to cut costs, buy back shares and shed lower-margin business, such as low-end servers and chipmaking.

Things began to change in 2013 when it acquired Softlayer, a cloud computing provider. Then recently it teamed up with two  ''new tech'' firms, Apple and Twitter, to develop mobile business apps and mine social-media data..

IBM has also started to tweak its organisations. Recently, it created separate units for its fastest growing businesses such as  data analytics, to make them more focused, the better to compete with upstart rivals.

Will these change be enough?  Steven Milunovich of UBS, a bank thinks it will be another three to four years before IBM's new businesses, such as its  Cloud  offerings, bring in more money than old ones, such as IT services.

But he is optimistic that IBM will make it through this transaction intact. And the firm's longer-term bets, such as Watson, an  artificial-intelligence   computer system, could still turn into something big.

It continues to pump money into research: two years ago, for the 22nd year in a row, it was America's largest recipient of patents.

Another analysts imagine a more pessimistic scenario : IBM is increasingly held held back by its legacy businesses; it becomes less profitable because cloud services offer lower margins than the more customised IT services IBM is used to providing.

And it steadily losses customers to newcomers, such as  Amazon Cloud-Computing arm.

If this starts to look like it is happening, pressure will mount for Ginni Rometty, IBM's boss, to take more radical action  It is unlikely that the firm will break itself up, as its rival  HP  has decided to do.

IBM's businesses feed too much on each other. But it could be forced to separate its old from its new businesses more clearly.

Many of its clients are going for  ''two-speed IT'', in which they separate their faster moving and more innovative IT needs [data crunching, say] from more basic services [payroll processing, for instance].

To keep them,  IBM may need to do the same.

With respectful dedication to the Students, Professors and Teachers of the world. See Ya all on !WOW!   -the World Students Society and the Ecosystem 2011:

''' The Computing Shuffle '''

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless