IBM continues down the road to recovery

Rome wasn’t built in a day, and IBM’s readiness for the connected era certainly took some time, but another solid quarter perhaps demonstrates the corner has finally been turned.

Perhaps the watershed moment was six months ago, the company’s first quarter of revenue growth following 23 consecutive periods of decline, but the last two results have proved it wasn’t a fluke. Big Blue is back on the right path.

The last three months appear to be solid, if not spectacular. Total revenues stood at $20 billion, up 2% year-on-year, with the Strategic Imperatives (cloud, security, analytics and mobile) revenues at $10.1 billion, a 13% increase and the first time this segment accounted for more than half of total revenues.

“We delivered strong revenue and profit growth in the quarter, underscoring IBM’s progress and momentum in the emerging, high-value segments of the IT industry,” said Ginni Rometty, IBM CEO.  “More clients are engaging IBM on their journey to the cloud, and deploying IBM Cloud, Watson AI, analytics, blockchain and security solutions.  This demonstrates IBM’s unique leadership in providing innovative technology coupled with deep industry expertise, trust and security.”

The transition to the connected, mobile orientated era was a tricky one for IBM, as while the Strategic Imperatives business was growing healthily, it wasn’t compensating for the rapid decline of IBM’s legacy business. This is a trend which seems to have been reversed, with the Strategic Imperatives accounting for $39 billion over the last twelve months, a 12% increase, representing 48% of total revenues.

Dissecting the Strategic Imperatives, analytics grew 5% to $5.4 billion, while cloud jumped 18% year-on-year to $4.7 billion. Mobile accounted for $1.3 billion, up 3% year-on-year, while security brought in $1 billion, a 79% boost from the same period in 2017. 13% year-on-year growth across the Strategic Imperatives certainly makes for positive reading.

IBM might not be anywhere near as influential a business as it was in a previous era, but the future is starting to look a lot brighter. A 3% boost in share price in afterhours trading indicates the market certainly likes the news and the trends.

Cisco wants to help IT departments win the WAN war

The growth in remote working means employees increasingly connect to the company via the WAN, which creates a special challenges for IT departments.

Cisco reckons it’s the IT crowd’s new best friend thanks to a couple of new products that it claims provide an unprecedented level of centralised visibility into the WAN. This in turn aims to give corporate techies the ability to more easily identify, resolve and ideally even pre-empt issue on the WAN.

A central pillar of Cisco’s efforts in this area is its recent push towards intent-based networking in general. The two specific product silos within this initiative announced to tackle the WAN issue are Cisco SD-WAN vAnalytics and Cisco Meraki Insight. Between them they promise all this lovely WAN insight and diagnostics as well as the ability to optimise SaaS application performance.

“We have set an ambitious goal for ourselves of transforming the entire network, from campus to branch, data center to edge,” said Scott Harrell, GM of Enterprise Networking at Cisco. “The WAN is a vital part of the network and is one of the toughest to manage. As we bring insight into the WAN with these new innovations, we get closer to delivering end-to-end intent-based networking to help our customers eliminate downtime and save money.”

“With over 600 branch offices and more than 5,000 employees, we rely on cloud applications and an always connected workplace to serve our customers,” said Peter Castle, Senior Network Engineer at Reece, an Aussie engineering firm that is presumably a Cisco customer. “Our business requires a secure, scalable, and high-performance WAN.

“With vManage, we can centrally deploy branch applications and services rapidly, and we have been able to dramatically improve branch availability and bandwidth utilization with the rich analytics this platform provides. We are looking forward to the additional functionality we will be able to achieve with the even richer application visibility that vAnalytics will provide us.”

Ultimately this is about more than just remote working, it’s about the tendency for workers to access the corporate network and applications via the cloud from an infinite number of locations and devices. It’s easy to see how this has created demand for greater WAN control, hence this announcement. You can see a Cisco diagram summarising it below and read a deeper dive into the launches at Light Reading here.

Cisco WAN diagram

Nokia goes all-in on digital cities

Nokia has announced a series of initiatives designed to position itself strongly as a supplier of digital city products and solutions.

Assuming this is a strategic bit of positioning in advance of MWC next week, Nokia’s digital cities push comes intriguingly soon after it threw in the towel on digital health buy announcing a strategic review of its efforts in that area. The contrast seems to be that cities are a macro, large scale problem while health is ultimately a micro, individual-level issue and it seems plausible to assume the former plays more to Nokia’s strengths.

Here are the digital city initiatives announced today:

IoT for Smart Cities is a modular platform designed to help operators and systems integrators to do unified smart city management and to launch new services in this area. It’s powered by Nokia’s Integrated Operations Center (IOC), which is designed to orchestrate all smart city operations. Applications include video surveillance, smart lighting, parking, waste management, and environmental sensing.

Sensing as a Service is another smart city IoT thing that aims to offer as much of the burden of installing sensors, processing their data and offering useful actions as a capex-free service. One slightly creepy USP seems to be the potential for an Orwellian level of city-wide surveillance that can detect illegal construction, rubbish burning and other unsanctioned activities. More intriguing is the use of blockchain to enable anonymised, secure micro transactions for new revenue streams.

S-MVNO (Secure Mobile Virtual Network Operator) for Public Safety seems to allow the creation of a public safety-specific MVNO within an operator’s existing network, which complies with all the various additional stipulations required of such a thing.

“Cities need to become digital in order to efficiently deliver services to their habitants,” said Asad Rizvi, head of Global Services business development at Nokia. “Smart infrastructure, which is shared, secure, and scalable, is needed to ensure urban assets and data are efficiently used. We can help cities with that. In addition, we can help operators generate new revenue utilizing their existing network by providing solutions for smart city players, such as city, transport, travel and public safety authorities.”

In a separate announcement Nokia said it has co-developed a suite of analytics services for digital cities in partnership with Singapore operator StarHub. This seems to be a refinement of Nokia’s AVA cognitive services platform with the introduction of real-world use-cases.

“We have a strong team of data analytics experts with a diversity of capabilities, and we have introduced several successful mobility analytics use cases in Singapore for strategic and operational urban planning and decision making,” said Dr Chong Yoke Sin, StarHub’s Chief, Enterprise Business Group. “By integrating the use cases into the Nokia AVA platform and using Nokia’s analytics capabilities, we will be developing the use cases further and creating new ones that we can offer even to other telcos as white label solutions. Our partnership with Nokia allows us to develop innovative solutions at the deep research level for the market.”

As we said at the start, city-wide communications and IoT initiatives seem to play to the strengths of networking operators more than digital health, which necessarily has a B2C element. The digital city/smart city (when everything is ‘smart’ will it still have meaning?) seems likely to be one of the principal new opportunities of the 5G era, along with autonomous vehicles and, yes, digital health.