AlphaBlox deal anchors IBM's BI strategy

IBM general manager Janet Perna says, 'BI cuts through everything we're doing'

After decades of being a technology used exclusively by IT administrators and professional researchers, IBM is trying to push business intelligence-based technologies out to the great gray mass of desktop users in a range of different commercial environments.

IBM hopes to accomplish this through a collection of existing and upcoming products and technologies that will marry the massive amounts of historical data corporations have with real-time analytics. This combination will enable companies to more quickly and accurately monitor day-to-day data from, say, financial transactions, thereby allowing them to compare and contrast that data with the data stored in mammoth databases.

This should help corporate users where the rubber meets the road to make faster, better-informed decisions in the coming world of on demand computing, IBM officials believe.

"What we are finding is that BI in the past is all about capturing historical data, but we need to apply real-time analytics to it. This idea of pushing BI out to the masses is where we really have to get to as an industry," said Karen Parrish, IBM's vice president in charge of BI.

On Wednesday of this week, IBM added another technology piece to this ongoing effort with its acquisition of AlphaBlox, a company in Mountain View, Calif., specializing in analytics software.

The software from AlphaBlox lets users embed analytics into their existing business processes, thereby making information available to a much wider range of users and applications. It is also designed to enable larger IT shops to deepen their business acumen by being able to access and manipulate data from across the enterprise and then offer it up to users in a customized way.

IBM plans to weave AlphaBlox's operations into its Information Management software business and will sell the company's products through its network of resellers and business partners, according to IBM officials. They added that they will integrate AlphaBlox's technology into its middleware portfolio in a number of ways, including its Data Warehouse Edition, the WebSphere Business Integration Monitor, the Rational collection of tools, and the WebSphere Portal and IBM Workplace.

The AlphaBlox software allows users to more effectively embed analytics into their existing business processes, thereby making information available to a wider spectrum of users and applications, company officials explained. The goal of the software is to help corporate IT shops deepen their business insight by being able to access data from across the enterprise and then present that information in a customized way.

The AlphaBlox acquisition is the sixteenth by IBM's $14 billion software group, just since 2001, and the fifth for the company's DB2 data management division.

Recent market numbers indicate IBM's financial investments in this part of the market may be justified. According to IDC, the overall opportunity for BI is more than $7 billion worldwide for 2004, with the market researcher predicting it will be double that by the end of 2006.

Most corporate users would love to see IBM deliver on any technology that helps them put together mission-critical data in multiple data stores with new Web-based data arriving every day. But some fret over the cost of buying new software as well as costs associated with services and support.

"We are a good-size IBM customer and have invested quite a bit in infrastructure-level products and have products in there from their competitors too. If we think the newer IBM stuff is worth the bucks we'll buy into it. But we would be concerned with replacement and integration costs and whatever someone like [IBM] Global Services might charge to help us do that," said Russell St. George, a senior IT manager at a large Chicago-based financial services company.

In response IBM officials say that one of the benefits of IBM's ongoing efforts to steadfastly maintain an open standards-based infrastructure is that its refocused BI initiative allows corporate IT shops to more easily build on their existing infrastructure without having to tear anything down.

"I guess we are trying to reinvent the future here, because what we are up to is redefining BI. You will find that BI has been focused on a community of providers and not analytical reporting. Users have already invested a lot and so we have to help them leverage that infrastructure. No one wants to rip and replace, which is why we have a very open environment," Parrish said.

IBM will continue to drive analytics deep into DB2 as well as add capabilities that cater to a variety of vertical markets. The "verticalization" of its strategy began earlier this year with its support of the Basel II standard in the banking industry and Sarbanes-Oxley, with a couple more to follow later this year, Parrish said.

"In this way DB2's evolution will mirror that of WebSphere over the past couple of years," Parrish said.

IBM over the next year also plans to streamline its BI-related offerings simplifying the choices of corporate buyers, including a new bundle involving its Data Warehouse product.

"We have the Data Warehouse Edition [of DB2] which is really just a marketing bundle made up of all the things you need to build an enterprise data warehouse. We will evolve that to be a much more integrated product with all those capabilities in an all-in-one package next year," Parrish said.

IBM's core software groups continue to work closely with IBM Research in order to weave state-of-the-art technologies in with existing IBM BI-related products. IBM officials believe the next technology wave for BI will tie together voice and search capabilities and mobile devices. All three should help the cause of pushing BI-based technologies down to every day users.

"Putting BI capabilities into a handheld device would allow a police officer walking down the street to gain access to real-time information about a crime scene, for instance," Parrish said.

Masala, the code name for an upcoming technology to be stitched into DB2, will feature an enterprise search paradigm capable of crawling the Web to find information an any given topic. Masala essentially is integrating text mining with real-time analytics, according to Janet Perna, general manager of IBM's data management solutions group. IBM plans to issue a beta of Masala in the next couple of months, according to Perna.

"BI cuts through everything we're doing," Perna said.

IBM's renewed interest in BI will span several of its products, including the DB2 database, DB2 Information Integrator, and WebSphere Portal, Perna said. The goal is to offer real-time BI that includes active data warehousing, supports high-volume transactions and embedded analytics, and the ability to query in a mixed fashion across structured and unstructured data sources.

"There is a ton of transactional data out there. If you look at a company like Sprint and what they have done with their enterprise data warehouse, it is all based on information coming into the call center. Then they are doing deep data analytics and combining that with historical data to make decisions," Parrish said.

Over the short term IBM will more fervently pursue those solutions that focus on the role an individual plays within his or her company because "they need to absorb everything coming at them. This is the world of on demand we are positioning ourselves to compete in," Parrish said.

Copyright © 2004 IDG Communications, Inc.

InfoWorld Technology of the Year Awards 2023. Now open for entries!