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DIALOG IBM and ILOG – the strategic perspective

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Getting started at DIALOG I got to spend some time with Tom Rosamilia GM of WebSphere, Sandy Carter and Pierre Haren, CEO of ILOG discussing the ILOG acquisition by IBM.

Tom went first by pointing out that the acquisition seemed like a good idea when it was announced and since then the Smarter Planet initiatives and economic changes have reinforced the agility and resource optimization capabilities and messages – all about meeting changes more quickly and cost-effectively.

All ILOG’s business units were targeted – BRMS, Optimization and Visualization. IBM had a long history with ILOG’s products – ILOG was a partner for 12 years, lots of joint projects, lots of recommendations for BRMS especially around WebSphere Process Server and FileNet, big optimization group and lots of uses of this visualization.

Tom reiterated that IBM is committed to all the products and to them as standalone products but also looking to integrate into new and existing IBM products. IBM has no intent to sunset any products nor to reduce the staffing – they want the products and the people. IBM tries hard to find a cultural fit for acquisitions and has walked away from deals before because of it. The ILOG/IBM match seemed strong.

Sandy Carter went next and discussed how IBM’s strategy is now very focused on the new Smarter Planet initiative (see this blog post for my thoughts) and the current economic environment reinforces this. Smarter Planet involves instrumentation, computing power, interconnectedness. Things you would not expect to be smart now are. Smarter companies/countries/people have to become more agile – being adaptive is key (Key Agility Indicators now not just KPIs). E.g. for IBM used to take 3 weeks to add a supplier now can do it in 2 hours.

Sandy also discussed the results of IBM’s huge survey of CEOs – 1,100 – and areas of focus they identified were:

  • Green
    Corporate Social Responsibility is increasingly important because $1 in energy savings maps to $6-$8 in savings elsewhere. E.g. Statoil used RFID on mussels to detect oil leaks – reduces pollution and saves oil. ILOG had an initiative around green supply chains also, reducing carbon footprint with optimization etc.
  • New Intelligence
    57% more data next year, average employees spend 2 hours looking for data. How to turn data into information and turn the insight into action. More is knowable and trackable thanks to RFID etc. More complex event monitoring etc. Moving also from knowable in hindsight to future-focused insight. Less human intervention, faster intervention, proactive not reactive. I see this as the key driver for decision management, though Sandy pointed out that visualization tools are also important.
  • Smart Work
    How does technology help people work smarter – have people drive the process (e.g. customer-centric processes). Lots of focus from CIOs on optimizing their processes to fit their people.
  • Dynamic Infrastructure
    McKinsey study found that companies that just focus on IT improvement get 2%, business only is 8%, both is 20%. Clearly technology and business change need to go together. Recent SOA survey gave agility as #1 (100%), cost optimization was second (so not just cost REDUCTION).

Pierre went last and emphasized that IBM was ILOG’s largest partner and broadest – SAP was second but that was all about optimization – and they could see the opportunity of working with IBM. ILOG was not as profitable as the market wanted and this meant less investment while they could see great opportunities. Becoming part of IBM was a natural fit.

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