November 12, 2003, 11:44 AM — IBM Corp. Chairman and Chief Executive Officer Sam Palmisano stood before several hundred of his company's top executives and customers last October and gave the speech that launched a thousand marketing campaigns.
"On-demand" computing was the industry's future, and IBM would tailor its products and reshape itself internally around the kind of flexible, open technology needed for the next era of business transformation, Palmisano proclaimed.
While customers and analysts debated what "on-demand" actually meant, other vendors began integrating it into their own roadmaps and strategy speeches. Soon, nearly every one of IBM's rivals had its own on-demand initiative: Hewlett-Packard Co. spoke of the "Adaptive Enterprise," Sun Microsystems Inc. focused on utility computing, Electronic Data Systems Corp. introduced an "agile enterprise" framework, and Computer Associates International Inc. touted its love-all-platforms approach to enabling IT flexibility. A host of smaller vendors -- most notably in the enterprise software market -- sparked a resurgence of the ASP (application service provider) model that had seemed to fade with the end of dot-com mania.
Palmisano will speak Wednesday at a customer gathering in San Francisco about IBM's first year of experience with its on-demand push. Internally, the company is close to completing the first phases of its top-priority projects. Externally, analysts say IBM is further along than its rivals, but that the major benefits of the flexible architecture at the core of the vendors' on-demand rhetoric remain several years from realization.
"All of these things, whether it's 'on-demand' or 'adaptive enterprise' or what have you, they're all about as concrete as Jello, it sometimes seems," said Illuminata Inc. senior analyst Gordon Haff. "I think IBM does get good marks for painting a roadmap for where things need to go, although they're not an awful lot further ahead than anyone else is right now in building, say, the all-singing, all-dancing virtualized data center."
Every vendor has its own definition of what 'on-demand' means. Flexibility is at the heart of IBM's. The company sees on-demand as the next step beyond IT integration. Building on a foundation of standards-based hardware and software components, on-demand companies, in IBM's view, have an IT infrastructure malleable enough to adapt in real-time to changing business conditions.
"Business transformation is a very key element of on-demand, as is IT enablement," said Linda Sanford, IBM's senior vice president of enterprise on-demand transformation. "The key word is enablement: technology that enables business processes, not technology for its own sake. The days of the latest gizmos are over. Customers don't want to deal with that anymore. It's 'bring me something that helps me solve my problems.'"