IBM IBV Study: Why Infrastructure Matters

By Jane and Joe Clabby

For several years, the IBM Institute of Business Value (IBV) has conducted surveys of both Chief Information Officers (CIO) and Chief Executive Officers (CEO) to determine strategic goals and priorities and the role that technology will play in organizational growth. In a 2013 CEO Study — for the first time — technology rose to the top of the list as the biggest business influencer. This outcome prompted the IBV to launch an additional study (an IBV “Infrastructure Matters” study) to assess the importance of infrastructure on overall business.

Survey participants of the new 2014 study included 750 global IT executives with 32% being Chief Technology Officers (CTOs), 30% Chief Information Officers (CIOs) and the remainder Senior IT Management. IBM’s goal was to determine how important infrastructure (defined as systems, storage and networks) is to new workloads – and what role infrastructure plays in helping to reduce IT complexity.

At a high level, the study revealed that 7 of 10 IT Executives believe that infrastructure enables business strategy and results – and also helps drive business growth. However survey results also indicated that fewer than 10% of the organizations studied believe that their infrastructure is fully prepared to handle mobile, social, big data, analytics, and cloud trends.

Other survey findings:
• The top three challenges faced by the enterprises surveyed were: 1) the ability to efficiently and securely move large amounts of data from one geography to another with insight into the latest content; 2) the ability to cut costs and improve efficiencies of their respective global storage environments; and, 3) the ability to develop and maintain a secure environment. (Note: Clabby Analytics has produced reports on data movement [“The ETL Problem”}; on reducing storage costs [IBM’s Elastic Storage in a May issue of PundIT; and in our recent report on fraud prevention and security entitled “IBM’s Smarter Counter Fraud Initiative: A Comprehensive, Unique and Aggressive Approach to Real-time Fraud Prevention”).
• 50% of organizations are more concerned about internal security than external, with threats specific to cloud computing ranking as the lowest concern among survey participants. (Note: Clabby Analytics believes that cloud security is a major challenge for enterprises – and that the survey response indicates that survey respondents did not have a firm grasp on this challenge. Accordingly, expect us to examine cloud security more closely in a report that we will issue over the next two months).
• Greater than 60 % of organizations plan to increase IT infrastructure investment over the next 60 months, while at the same time reducing IT infrastructure costs by improving infrastructure efficiency.
• Top three business drivers for increased IT investment include: 1) reduced infrastructure costs; 2) faster application development and deployment; and, 3) new or enhanced revenue opportunities. Also of interest, two-thirds of respondents did not list “reduced infrastructure costs” in their TOP 5 list of drivers for new infrastructure investment. (Interviewees instead focused on activities that could help drive top-line growth – like increased speed, enhanced revenue opportunities, better services enabled through mobile computing – and the like). As more line-of-business teams get involved with IT, the study shows these teams are influencing IT and infrastructure decisions by focusing IT on supporting business growth strategies.
• Roughly 20% of applications run on cloud today and organizations are uncertain about future cloud deployments and where they will invest (in private vs. public clouds vs. existing infrastructure). Smaller organizations are the least certain.
• Responses vary based on organizational IT maturity and strategic vision with those organizations who are most mature: 1) allocating a larger budget percentage to IT infrastructure (by 4x); 2) using IT for competitive differentiation ;and, 3) having a higher level of preparation while exhibiting superior financial results.

More interesting than the results themselves are how the results reflect on IBM’s recent shift in direction toward hybrid cloud and “as-a-service” model. IBM was quick to suggest in a recent briefing that the survey results validate IBM’s current strategic direction and IBM’s “Infrastructure Matters” message rather than introducing any real surprises that will prompt additional changes. Clabby Analytics agrees with this position. Several examples follow that demonstrate that IBM understands the infrastructure challenges its customers face – and has introduced numerous “simplified infrastructure deployment/operations” solutions to address those needs.

Hybrid Cloud and IBM Elastic Storage on Cloud
As examples of simplified infrastructure deployment and operations, consider IBM’s acquisition of SoftLayer, as well as IBM’s newly introduced Elastic Storage on Cloud offerings. In cloud computing IBM is well positioned in the hybrid cloud market because it has the ability to offer customers a choice of several different deployment models. As for Elastic Storage on Cloud, IBM offers this simplified storage infrastructure as an on-premise cluster, a dedicated on-premise cloud (private cloud), a hybrid cloud (public/private) or a dedicated off-premise cloud (public cloud).

A closer look at the survey shows that enterprises plan to deploy compute and storage clouds, but are uncertain how to proceed. With its streamlined cloud compute and storage infrastructure offerings, IBM an opportunity to educate and guide existing and potential customers as well as being able to offer a range of alternatives based on application/workload requirements, security considerations, available management resources, and budget. One of the other benefits of IBM Elastic Storage on Cloud is its ability to transfer data across geographies worldwide. Coincidentally, data transfer is mentioned as one of the top three challenges of IT Executives in the survey.

Improving Storage Costs and Efficiencies
Another top challenge noted by survey respondents was the need to reduce storage costs while improving storage efficiency. Yet, at the same time, IT executives indicate plans to increase their overall investment in infrastructure. This suggests that customers are willing to spend on cost-saving storage technologies such as replication, storage tiering/flash, storage virtualization and compression – and, coincidentally, these are also area of strength in IBM’s storage portfolio.

Faster Application Deployment and Development
Cost, speed and revenue are ranked as the top business drivers for upgrading/investment when it comes to buying new infrastructure. It should be noted that IBM recently introduced its IBM BlueMix application development environment (a composable services environment that provides mobile and web developer’s access to IBM and third-party software and services) – and this environment streamlines the deployment of many different applications on a wide variety of underlying infrastructures. BlueMix is offered as a platform-as-a-service (PaaS) development environment based on Cloud Foundry and other open standards. A catalog of services open APIs and SDKs allows developers to build new mobile and cloud applications using IBM and third-party scenarios. Using BlueMix, IT executives should be able to reduce application development cost and speed – and, accordingly, drive more revenue.

As we discussed in our report entitled “IBM’s Smarter Counter Fraud Initiative: A Comprehensive, Unique and Aggressive Approach to Real-time Fraud Prevention”, IT executives are very concerned with internal security risks (as well as external security breaches). And based upon our conversations with numerous IT executives – as well as based on webinar and seminar presentations by many enterprises who have been willing to share their security views with analyst audiences – we believe that security is a major concern both in traditional computing environments as well as in cloud environments. So we are somewhat mystified by IBM’s finding that security for clouds ranks as a low priority for potential infrastructure buyers. We suspect that part of the reason for the low ranking of security as a major cloud issue may be that some of the respondents didn’t have a deep understanding of security in general (few CEOs that we’ve met do) – nor a deep appreciation of what it takes to secure a cloud. To gain this understanding, we again encourage readers to download our free report (mentioned above).

Summary Observations
IBM’s most recent IBV study on “Infrastructure Matters” confirmed what we already knew: IT executives are continuing to spend money on infrastructure – but they want to be more careful about how that money is spent. IT executives are willing to spend money on more servers – but they want their servers to be highly utilized (which means investing in virtualization infrastructure as well as virtualization management environments). IT executives know that they will continually need to spend more and more money on storage given how much new data they capture on an annual basis – as well as given compliance requirements to hold onto storage for long periods of time. So these IT executives invest in storage tiering software such that data in most demand is located near the processors – and that data that is in lesser demand is placed on less costly storage. Many of these executives are now evaluating other storage alternatives such as software-defined storage in order to help drive down ongoing storage costs. The same holds true in networking – IT executives no longer want to be locked into one vendors storage products – so, again, they are looking for products (and will spend money on network infrastructure products) that will help eliminate vendor lock-in and drive more efficient use of storage (this is the promise of software-defined networking).

A lot of our current research supports the findings in IBM’s IBV “Infrastructure Matters” reports. We encourage readers who want to look more closely at cloud security to download a copy of our fraud report (mentioned earlier in this report). For those who want to learn more about storage efficiency and cost reduction, see Jane Clabby’s Elastic Storage report in PundIT’s May edition. For those who want to learn more about software-defined environments, see our report entitled “Stragegic Planning for Software-Defined/Standard Cloud Environments”.

Our bottom line after examining IBM’s IBV “Infrastructure Matters” report is this: it is good to have verification that our findings jive with an external organization’s findings when it comes to the importance of efficient infrastructure within the enterprise. The only area in which our findings differ from those of IBM is in the area of cloud security. So, expect to see us issue a report that more clearly articulates our perspective on security in general and on clouds in particular – to be found over the next two months on our Website at

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