New Observations on Cloud Computing

Over the past couple of weeks I’ve been at both the All About the Cloud event out in California which is the premier event for cloud focused ISVs, and then the IBM Innovate event, which is the premier event for software development.  Quite naturally cloud computing was a hot topics at both events.

In reflecting on what’s “new and different” about the cloud discussions of late – three observations come to mind –

1) The tone is much more serious and business oriented

While past events were full of hype, hoopla, hyperbole, and evangelists spouting about how cloud will change the world and change IT forever, the tone has now shifted.  Off all the presentations I saw or took part in, only one still had the mega-hype tonality.  The rest of the dialogue has finally shifted to cloud driving business results – cost savings, speed of innovation and implementation, deployment flexibility, etc.  These better business outcomes are always required for broader adoption of any technology solution, so it’s nice to see the shift finally taking place in the cloud space.  As Bill McNee of Saugatuck Technology pointed out in his keynote address – sometimes it just takes a good recession to get people focused on business outcomes again.

2) Growing recognition of IBM’s prowess in this space

Now that IBM has completed 2000+ cloud projects — and is working with 5 of the Fortune 10, and 50% of the Fortune 500 on cloud projects — clients and partners are realizing how powerful our solutions portfolio is for cloud computing.  We now have all of our major software available via the cloud, we have CPU, storage and compute functions rentable in the cloud, and we have a whole range of design, test, and implementation services for public and private cloud deployments.

3) Growing recognition of the importance of open standards and interoperability.

Given the growth of both public clouds and private clouds – there is now tremendous demand for a set of standards and interoperability.  IBM was pleased to be help the OMG Group launch the Cloud Standards Customer Council that now has over 150 members and meets again next week to continue the important work of building out a set of open standards.  You’ll see the members range from large telcos and Fortune 50 clients to small service providers and even universities.  The group already has some important use use cases and requirements for open cloud computing being drafted – so be sure to join (its free to join) and contribute to this important work for our industry.

What are your thoughts?  Are you seeing similar trends and themes?

IBM & Sky IT deliver SmarterRetail solution for Bernard Chaus giving consolidated view of what’s selling and why

Imagine if you could spot marketplace trends and understand customer preferences as they were happening?
Bernard Chaus Inc. significantly boosts sales, reduces costs and gains business agility with real-time visibility into sales.

What was the situation?
Despite being a seasoned leader in the fashion industry, Bernard Chaus had little knowledge of which, where and how much of its products had sold until four to five weeks into a season. By then, it was almost too late to take corrective action. Without more timely and accurate insight into sales, management struggled to react quickly and make informed decisions. As a result, the company was often forced to absorb mark-downs, forfeit prime real estate on selling floors and lose sales.

What makes it smarter?
In the fast-paced fashion industry, companies that know exactly which of their products have sold gain insight into marketplace trends and customer preferences—a true competitive advantage. Bernard Chaus not only gained real-time visibility into its sales but also saved 20 percent to 30 percent in costs related to returns, lost sales and mark-down expenses with its new business intelligence (BI) solution. Now the company has a current, accurate and comprehensive view into which products have sold by date, chain, store, size, brand, color, demographic and geography. Management can react more quickly to trends, capitalize on market opportunities and make better decisions about production and inventory, leading to improved operations and decreased costs.

By using SKYPAD, a unique Cloud Computing solution from Sky IT Group and IBM,  Bernard Chaus, Inc. has achieved the impossible – the ability to track which clothing items are selling – and which are not – at the retailer level on a day-to-day basis. This unique insight is achieved by merging information from retail outlets around the world augmented by Chaus Enterprise Resource Planning (ERP) data. Chaus can quickly make predictive decisions to help customers drive sales, cut markdowns and realize cost savings.

What were the real business results?

• Dramatically improved sell-through (actual items sold), saving up to 30 percent in costs related to returns, lost sales and mark-down expenses
• Improved ability to react more quickly to sales trends, customer preferences and marketplace opportunities
• Increased efficiencies and collaboration across the sales, design, merchandising and production departments with a single, integrated view of data

See the full story here

What if you could spot marketplace trends and understand customer preferences as they were happening?
Bernard Chaus Inc. significantly boosts sales, reduces costs and gains business agility with real-time visibility into sales. 

What was the situation?
Despite being a seasoned leader in the fashion industry, Bernard Chaus had little knowledge of which, where and how much of its products had sold until four to five weeks into a season. By then, it was almost too late to take corrective action. Without more timely and accurate insight into sales, management struggled to react quickly and make informed decisions. As a result, the company was often forced to absorb mark-downs, forfeit prime real estate on selling floors and lose sales.

What makes it smarter?
In the fast-paced fashion industry, companies that know exactly which of their products have sold gain insight into marketplace trends and customer preferences—a true competitive advantage. Bernard Chaus not only gained real-time visibility into its sales but also saved 20 percent to 30 percent in costs related to returns, lost sales and mark-down expenses with its new business intelligence (BI) solution. Now the company has a current, accurate and comprehensive view into which products have sold by date, chain, store, size, brand, color, demographic and geography. Management can react more quickly to trends, capitalize on market opportunities and make better decisions about production and inventory, leading to improved operations and decreased costs.

What were the real business results?
Dramatically improved sell-through (actual items sold), saving up to 30 percent in costs related to returns, lost sales and mark-down expenses
Improved ability to react more quickly to sales trends, customer preferences and marketplace opportunities
Increased efficiencies and collaboration across the sales, design, merchandising and production departments with a single, integrated view of data

See the full story here:
http://www-01.ibm.com/software/success/cssdb.nsf/CS/SCHA-8EY3L6?OpenDocument&Site=corp&cty=en_us

A quick update on Smarter Utilities

This week we announced the results of another smart grid pilot project here in North Carolina.  IBM and our partner Consert worked to install energy management devices on specific appliances at each location – such as hot water heaters, pool pumps, HVAC, etc.  – to give consumers the ability match the device power consumption to their use.   For example – why not turn off the hot water heater when no one is home all day!

The pilot was run for 100 residential and business customers of the Fayetteville Public Works Commission, the local utility.  The result – customers were able to reduce their consumption by ~20% in the first month!

Here’s a good overview at the NY Times Green Inc Blog – check it out!

IBM Software available in the cloud….

Given all the excitement around cloud computing, as I travel around meeting with partners I’ve been receiving a lot of questions about the IBM-Amazon partnership to feature our IBM Software on the Amazon Web Services (AWS) platform.

Quite simply, clients told us that they wanted IBM software available on AWS and we’re delivering it.  Customers and developers can now use IBM software on a public elastic cloud environment.  Our partnership provides a new “pay-as-you-go” model that provides unprecedented access to development and production instances of many IBM software products.

There are three ways to take advantage of this cloud solution:
1) Development and Test Environments – Those of you building commercially available solutions can access IBM Development Amazon Machine Images (AMIs) that include product-level code – with all features and options enabled on a scalable, secure, and cost-effective cloud computing environment. You pay AWS only for your time and the capacity – there is no charge for the IBM software component.  Have a proof of concept project?  Need to do some training and don’t have idle server capacity?  Use any of the Development AMIs in EC2 and only pay for the minimal EC2 charges which start at just $0.10 an hour.  Find out more here!

2) Production Environments – All developers and customers can run development and full production instances of IBM software for an hourly price per instance and these can be used for revenue generating activities (unlike the development only environment above). The Production AMIs include the IBM software, the Novell SUSE operating system and the Amazon EC2 service for a single hourly charge per instance.  All charges are billed by Amazon Web Services and use of service is governed by Amazon Web Services.

Do you have an event you’re planning?  To get the project moving quickly and avoid lengthy procurement cycles and capital expenditures etc, you can get started in a matter of minutes with the WebSphere Portal Server with Lotus Web Content Management AMI.  You pay hourly for use – there’s no license, no contract needed.  And – you can bring down the site when the event is over without a penalty or additional charges.  Details are  here!

3) Run your existing IBM Software in the cloud – new licensing guidelines now allow you to run your already-purchased IBM software on Amazon EC2.  Do you have licenses sitting idle because you can’t get the hardware in place?  Just need more compute infrastructure? You can now move your licenses into the cloud without additional capital expenditures for your customers!  Here is how to get started with BYOL….

Let me know if you are using these environments and how it’s working for your business!

My first taste of Smarter Utilities

As I caught up on the pile of “snail mail” at home this past weekend after being gone on holiday to the beach for a week (photo below) – I opened and almost

Beach Holiday 2009

discarded an envelope from our local power company here in North Carolina, Progress Energy.  Since I pay the bill with a checking account debit and we keep our house fairly efficient to keep costs low (78-82 degrees in the summer, and ~67 degrees in the winter), I rarely read all the inserts that some with each statement.

But this one was different – it was an invitation to join the Progress Energy Residential Load Control program.  Under the program, customers can volunteer to join the Progress smart grid, enabling the utility to add a smart device to the customers’ AC unit that allows Progress to cycle the unit off for up to 15 minutes per hour during peak demand times when the electrical grid is experiencing extreme loads.   Besides the benefit of supporting the environmental value of this, customers who opt in are given a $25 annual credit on their bill.

While this might seem minor and is just a small step toward a full Smart Grid, Progress Energy claims in their regulatory filing for this and other related programs that they will achieve nearly 450 megawatts of peak-demand reduction, the equivalent of several large power plants. That’s a lot of power consumption savings.

The company has proposed a 50/50 shared- savings model, under which the costs and benefits of these programs will be evaluated together, and the benefits of reducing peak electricity demand will be shared between customers and the utility. The model is consistent with the provisions of the North Carolina’s energy bill enacted last year.

Given all the focus on green energy lately, it’s encouraging to see it trickle down to my neighborhood.  I’m also intrigued by the shared cost savings model that they articulate – a 50-50 shared savings model with the consumer, which seems pretty equitable to me.  As my wife and I talked about it, it was a pretty short “why WOULDN’T we do this?”  Not only do we help the environment, we get a cost savings, all for a few minutes of potential reduced cooling during peak week day loads. And I suspect that’s just what Progress was hoping for  – the “why wouldn’t we do this” reaction.

Today Progress extended their program further with launch of a twitter ID – EnergyAdvisors – that they will use to tweet energy saving tips to consumers.  Some green tweeting!

I find their approach an interesting contrast to another vendor, in a different industry who could take a similar approach – Charles Schwab & Co brokerage.  As I’m sure many of you do – I receive a pile of mail from them related to the various accounts I have (Retirement IRA statements, Education IRA statement, etc) at the end of each quarter.  While they offer to send the statements to me electronically, given the importance of financial records for tax purposes, I am a bit old-fashioned and still prefer the paper copy. Since each envelope Schwab sends me costs them $0.26 in bulk postage, and probably ~$0.04 to print, that’s $0.30 per envelope.  And I get typically 5 envelops per quarter, costing them $6.00/year  If however, Schwab offered to share the cost benefit with me of stopping these mailings – and agreed to deposit 50% of the savings in my account each quarter – then I might reconsider.  Over 25 years (assume costs are linear for simplicity) – that would add up to about $150 in savings – $75 for me and $75 for them.  Multiply that for Schwab (or any other brokerage) times  >1M account holders and they would see a material bottom line benefit.     Maybe they should consider this type of shared benefit incentive to go green!

Just over a week ago – IBM also extended our commitment to help companies and clients “go green” by announcing the creation of the Green Sigma coalition. The coalition members will work with IBM to integrate their products and services with IBM’s Green Sigma (TM) which applies Lean Six Sigma principles and practices, to employ real-time metering and monitoring with advanced analytics and dashboards.  This will allow clients to make better decisions about energy and water usage, waste and GHG emissions to improve efficiency, lower costs and reduce environmental impact.  So far it’s been pretty well received in the industry as evidenced by the praise from IDC.

What experiences do you have on incentives to “go green.”  Let me know!

mikeriegel1@gmail.com