Playing IBM’s game

IBM HAS LED THE FIELD in IT services since the punch-card era, and considering Big Blue’s plan to invest $10 billion in on-demand utility offerings, on top of its recent purchase of PWC Consulting, the company appears poised to retain this supremacy for a long time to come. How are IBM’s competitors addressing the challenge?

Hewlett-Packard, the only systems company with the breadth and depth to tackle IBM in services, is struggling to craft an identity and culture in the wake of its merger. Sun’s services offerings are not very cross-platform. And Dell, a comer in the enterprise space generally, is still trying to branch out from desktop support.

We talked with the executives running the respective services businesses at HP, Dell, and Sun to get their take on the services landscape. At the crux of their comments lie several ideological questions about customer preferences. Among them are: Do enterprises want to outsource entire chunks of their IT infrastructure to external utilities, or do they value control over cost savings? Do they want heterogeneous technology environments, or do they feel indifferent as to whose software is under the hood?

HP: No. 1 contender

HP is the only contender plausibly within striking distance of IBM on services in terms of scale and scope. According to Peter Mercury, senior vice president of Palo Alto, Calif.-based HP’s services customer support, HP doesn’t plan to try to catch IBM on legacy datacenter outsourcing. Instead, the company will focus on more distributed opportunities, such as managing desktops and distributed environments. HP Services plans to differentiate in two ways: by working with big-name partners to provide better multivendor environment support than IBM does, and by providing more flexibility to customers who don’t want to completely hand over the car keys to an outsourcer.

“Our approach is not gonna be, ‘We must be in control of everything,’ ” says Mercury, who claims that HP has more pre-established working partner relationships than IBM — a better one with Microsoft in particular — enabling HP to provide more flexibility and seamless services experiences in heterogeneous environments.

Mercury also claims HP will take less of a cookie-cutter approach to on-demand services than IBM’s, which he says is mostly marketing hype. “Utility computing is a go-to-market pitch, one more way to enter into the discussion with customers,” he says, adding that a one-size-fits-all utility offering will fail, because “it’s pretty rare to find two large accounts whose needs are exactly the same.”

HP also has made on-demand and utility announcements over the past year, such as its Utility Data Center, Mercury notes, and the company currently is repackaging those offerings around three broad buckets: access on demand, storage on demand, and server capacity on demand. Other than for small and midsize customers with less sophisticated environments, he expects HP’s primary services offering to be “more of a one-to-one approach.”

In our view, HP has a few things going for it, not least of which is that large enterprises would really like a counterweight to IBM Global Services. However, HP has yet to tell a compelling services story and still seems to be in reactive mode.

The company is missing key pieces in the software stack. Despite the talk about partnering with the likes of BEA, HP really just needs to buy BEA; partnering with Microsoft will not solve HP’s software problems. And in terms of vertical market and business process expertise, HP also will have to acquire a third-party company to compete with the human capital IBM got in the PWC Consulting deal.

Sun: Pick a strategy

We spoke with Vivek Joshi, a vice president of Sun Services, which represents about one third of the company’s revenue. Sun’s services strategy is to be a technology provider to companies that provide utility services to enterprises, rather than provide such services itself. However, the Santa Clara, Calif.-based company also is trying to develop software products, similar to those IBM has announced, that will automate tasks requiring expensive support and systems integration personnel. “We want to differentiate from those who bring in vast armies of people,” Joshi explains. “We’re not trying to be a body shop provider.”

Products currently under development will support Sun’s previously announced N1 initiative, focused on software-assisted dynamic provisioning and management (proactive, predictive, and pre-emptive) of IT infrastructure, and routinizing best practices. Joshi says he soon expects a rollout of some of these products, including grid computing software for heterogeneous environments and robust remote management technologies based on Sun’s current eRAS offering. He says he expects these offerings to “match application quality of service requirements with SLAs at a very granular cost structure.”

From our perspective, Sun needs to quickly decide whether it’s going to be a solutions company when it grows up. Otherwise it may get stuck trying to sell technology while its competitors are successfully selling complete solutions, including robust services. Sun’s instincts are to stick to its roots as a technology innovator and to its own platforms, while providing services that help transfer that innovation to enterprises. But will a limited, tactical services vision stand a chance against the IBMs and HPs of the world? Don’t bet on it.

Dell: Slow start but gaining ground

Dell was the dark horse in our survey, given that it’s currently only nibbling at the edges of services with desktop-support type offerings.

We spoke with Jeff Lynn, vice president and general manager of Dell Professional Services, who explained that Dell’s services strategy is tightly linked to its product roadmap, currently focused on desktop/notebook support but also branching into the server, storage, and networking areas as the company introduces those products and sells to more solutions-oriented customers. Dell, in Round Rock, Texas, also recently acquired a services company called Plural, which specializes in development for Microsoft environments and emerging .Net architectures. “If we can help Microsoft win in the enterprise, we win,” Lynn says.

Few enterprises will outsource entire environments or fully leverage utility offerings because they won’t want to give up control of their architecture or the “future innovation that’s potentially inherent in their IT environment,” Lynn says, especially in customer-facing business processes (as opposed to, say, messaging environments). However, Dell can provide “low-cost computing environments that would still keep [customers] in the driver’s seat,” he says.

“You will see us push the envelope on how much of the services spectrum can we package, standardize, [and] deliver fixed-price to benefit our customers,” Lynn says. “There’s a mythology in the service world that it’s an art.”

CIOs don’t want to pay $200 an hour for SAN implementations, Lynn says; they want fixed price bids and rate card quotes, which he claims they’ll get from Dell. “We’re extremely focused on efficiency and lowering costs in our service-delivery model through remote management, high reuse of deliverables, methodology, and the same attention to detail, efficiency, and cost cutting as in other parts of our business,” Lynn says.

To Dell services, we say, “Welcome to the party.” Dell may be far behind, but it’s playing the tune that CIOs and CTOs want to hear. Good luck.

Source: www.infoworld.com