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Building on Life Science Success, IBM Aligns Software with Industry Verticals

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Those who are skeptical about the impact of IBM’s rapidly expanding life sciences business unit on the biomedical computing market might want to consider the influence the group has had on IBM itself: Last week, Big Blue said that it plans to restructure its massive software group to align with a dozen vertical industries — a strategy that the life science group has pursued nearly since its inception.

“The reorganization is a go-to-market alignment around the industries. It’s actually very similar to what we have been doing with life sciences,” said Beth Smith, director of solutions development for IBM life sciences.

IBM’s life sciences group rolled out a modular “framework for life sciences strategy in early 2002 [BioInform 03-04-02]. Smith said that the software group’s new vertical strategy is “somewhat modeled after what we’ve already been able to do with life sciences in the fact that we took the framework, which was architected around software group technology, [and] we added some industry pieces to it, and now we are taking that and including IBM’s business consulting services, process integration and business transformation, partner applications, and industry-specific applications — and when you take those pieces together, that really gives you the vertical focus. And that’s exactly what [the] software group is now aligning themselves around organizationally.”

Paraic Sweeney, vice president of industry solutions and business integration for IBM software, agreed that the life sciences group’s success influenced the software group’s decision to shift its focus away from its DB2, Tivoli, Websphere, Lotus, and Rational software brands and toward the business problems of specific domain areas. Compared to other vertical industries — like energy, consumer goods, retail, insurance, or telecommunications — “life sciences is further along in some respects in having defined software capability focused on that industry,” Sweeney said. “They’ve done a very good job in capturing the business domain knowledge and process knowledge through one of our middleware tools, and can describe the main business processes going on in that industry in that form.”

But even if it’s a bit ahead of the curve when it comes to the software group’s large-scale reorganization, IBM’s life science business unit still stands to see a few changes once the strategy is implemented over the course of 2004. Smith said that IBM’s life science customers and partners can expect to see from the software group “more solutions and offerings” that will “very much align with what the life sciences team has already been doing.” The new solutions are still in the design phase, Smith said, and roll-out of the new software products is expected to begin early next year.

From Technology to Solutions

Sweeney explained IBM’s shift in its marketing strategy as “a reaction to the way our customers are buying,” which has evolved toward a business-oriented view rather than a technology-oriented view. “In the past,” Sweeney said, “we would have gone to market with a database and talked about how it can do high-performance data access, and we would have talked about an application server as being certified to J2EE 1.3, and we would have talked about the integration server as being able to do transaction compensation and guaranteed message delivery, etc. — all very technical descriptions of a product value” — but not an effective strategy when customers are expressing their IT needs in terms of industry-specific business challenges, he noted.

Smith agreed. “What we heard from our customers … is that we should focus more on solutions, business problems, and not focus on the technology. Technology needs to be an enabler to help you solve that business problem or business challenge.”

Sweeney described a four-tier system that IBM is putting in place for each vertical industry, which starts with the middleware or software tools; adds industry-specific extensions such as portlets, wrappers, or application adapters; follows with implementation services that can be provided by IBM or its system integrator partners; and wraps up with third-party domain-specific applications.

IBM’s global services and sales organizations are already “largely organized by sector or industry,” Sweeney said, so it was a logical progression to migrate the software group’s structure to a similar model by “taking our middleware portfolio and putting an industry lens on it.”

The software group’s worldwide sales force of around 13,000 employees will begin a week-long “training event” in January in order to brush up on specific industry requirements, Sweeney said. The industry-specific software bundles will begin to roll out shortly afterwards, but “we’re not talking four, five, or six products and hardwiring them into a box or a suite,” he stressed. “It’s more configuration-defined…It’s not a hard-wired offering where there’s no flexibility.”

So far, the principal software components of IBM’s life science framework have been the DiscoveryLink integration technology and DB2 database. Smith said that IBM is also seeing strong demand in the life science market for its Lotus Sametime web conferencing software, Tivoli systems management software, and WebSphere offerings. With the software group’s new industry focus, however, life science customers will “continue to see more” of its products targeted to their needs, she said.

— BT

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