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Palmisano outlines IBM's $10 billion initiative

By Stacy Cowley and Ed Scannell, IDG News Service
October 31, 2002 12:00 PM ET

IDG News Service - IBM CEO Sam Palmisano spoke yesterday before a gathering of several hundred top IBM customers and executives, offering a State-of-the-Union-like rundown on IBM's view of the IT industry and vision of its future.
The technology industry moves through eras every 20 years or so, Palmisano said, and it's now entering a new one: A wave of integration and "on demand" business capabilities that will allow organizations to respond rapidly to constituent needs and market trends.
On-demand computing was the theme of his talk, as Palmisano outlined the forces and technological advances driving the new wave, to which IBM is committing $10 billion in research and development, acquisition and marketing funds. During his talk, which was also webcast to IBM's 350,000 employees worldwide, Palmisano said he planned to put Irving Wladawsky-Berger, currently vice president of IBM Server Group Technology and Strategy, in charge of a new on-demand computing initiative.
"In my point of view, what you are seeing is a fundamental shift that is a long-term shift, that is irreversible," he said.
As companies began adopting e-business technologies, they first focused on access: putting information on the Web, enabling some e-commerce and so on, Palmisano said. Next came the integration phase, as businesses worked for internal integration, adopting enterprise resource planning and customer relationship management systems and building connections between them.
The next stage, the on-demand transition, is about extending the enterprise beyond its borders, integrating fully with customers, partners and suppliers and using IT to increase businesses' flexibility and responsiveness, he said.
IBM saved $6.2 billion in costs by adopting integration technologies, but its savings from on-demand technologies will be even greater, Palmisano said.
He sees open standards and virtualization as major components of on-demand computing, with grid computing and autonomic technologies key to creating infrastructures robust enough to support enterprises' increasing IT complexity.
Grid computing is "operational, it's functional, it's here," Palmisano said, citing a cancer research project IBM is working on in partnership with the University of Pennsylvania. "But there's really another dimension to solving the problem: Become autonomic."
IT systems need to become more like the human body, able to repair, protect and optimize themselves, Palmisano said. IBM's Project eLiza is an umbrella encompassing dozens of IBM software and hardware autonomic initiatives, which are now paying off with new capabilities in products, including Tivoli and DB2, he said.
IBM released a white paper yesterday, titled "Living in an On Demand World," further outlining its position on the issues Palmisano addressed.
"Customers increasingly want products and services on their own terms, specific to their needs -- when, where and

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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