Summary Bullets:

• IBM is poised to grow its cloud services business by helping customers to accelerate their migration of mission-critical applications to the cloud.

• IBM brings a lot of value by helping customers remove complexities in their cloud migration; and avoiding vendor lock-in through an open source, hybrid cloud and multi-cloud strategy.

IBM held its annual analyst event – IBM Asia-Pacific 2019 Analyst Insights – in August 2019. The event was held in Singapore and coincided with THINK Singapore 2019, which was the first THINK event in the country. The THINK event helped IBM showcase its capabilities to customers in the country as it starts to ramp up customer engagement. Over the past few years, companies have experimented with AI and moved non-critical workloads to the cloud. IBM now advocates moving from experimentation to more substantial transformation to gain speed and scale. This will involve moving mission-critical applications (80% are still kept on-premises) to the cloud for scalability and agility. While this is ideal, to benefit from cloud-native features, enterprises need to deal with many layers of complexity ranging from regulations and compliance through to re-architecting legacy systems, security considerations, underlying infrastructure, and change management (people and processes).

IBM has made several moves this year to enable customers to succeed in their transformation. The acquisition of Red Hat underscores IBM’s strategy to leverage containerization and microservices to accelerate the migration of business applications to hybrid, multi-cloud environments. First of all, IBM has containerized its software portfolio and optimized it to run on Red Hat OpenShift. IBM has also introduced ‘Cloud Paks’ for delivering ready-made containerized software. They are intended to support business applications on any cloud and help customers to avoid vendor lock-in with the broader use of open source. IBM is also expanding its developer tools with a common set of security and management services for operations.

While the trend is pointing towards agile ways of work, microservices and driving efficiency with cloud-native applications, many large enterprises are hesitant to make the move. To overcome challenges such as the lack of skills, the need to change IT’s mind set and the need to manage complexities related to intertwined processes and systems, many enterprises will engage external help with their IT transformation. IBM is well placed to help existing clients migrate mission-critical applications to the cloud through its consulting-led, ‘Garage’ approach (design thinking, agile, and DevOps), which is now the primary customer engagement model. This is led by IBM Global Business Services (GBS, now part of IBM Services), which has a lot of experience and expertise in business consulting. The company has provided several examples in recent briefings, and at Analyst Insights 2019, it brought in Shiseido, which presented the company’s IT transformation with the help of IBM in managing data (customer and external) through a standard governance framework.

IBM Services has also introduced ‘Dedicated Private Cloud-as-a-Service,’ which is a fully managed, predefined offering leveraging OpenShift to have a consistent platform across on-premises private cloud, multi-tenant private clouds, IBM Cloud or any third-party cloud. This is crucial for customers that are embracing multi-cloud services to avoid vendor lock-in. Moreover, some organizations are not able to move their applications and workloads to public cloud due to regulatory and compliance reasons. With this offering, IBM is helping customers to future-proof their investment by developing applications that are portable to different clouds while they try to overcome existing hurdles. The Bank of Philippine Islands (BPI), for example, has chosen this approach as part of its digital transformation. The lack of a public cloud region in the Philippines and the need to ensure its data and applications are hosted on shore place restrictions on BPI’s ability to tap into public cloud services. Through IBM’s offering, BPI is able to enjoy some of the cloud benefits (i.e., a consumption-based model) and the ability to move applications to other clouds when they become available in the Philippines.

The demand for public cloud services has grown tremendously in recent years, benefiting hyperscalers such as AWS, Microsoft Azure, Google Cloud Platform and Alibaba Cloud. These cloud providers have won many customers that are early adopters of a ‘cloud-first’ strategy – including many SMBs and start-ups that make cloud their default choice for IT. IBM can ride on the growing demand for cloud services by enabling customers to host applications in any cloud (e.g., Watson Anywhere, which allows a customer to host the AI engine in third-party public clouds such as AWS, Azure and Google where their data resides). Ultimately for IBM, it needs to win in cloud-related, professional and managed services, where it has a stronger hand than IaaS, which is a commoditized business.