Software continues to be a key driver of growth for IBM as software profits rise 12% on software revenue of $5.6 billion in Q1 of 2012.

IBM announced Q1 2012 profits of $3.1 billion, supported by increases in software, services and growth markets.

IBM's Q1 net income of $3.1 billion when compared with $2.9 billion in the Q1 of 2011 represents an increase of 7%. The total revenue for Q1 of 2012 of $24.7 billion was flat compared with Q1 of 2011.

"In the first quarter, we drove strong profit and earnings per share growth," said Ginni Rometty, IBM president and CEO, in a statement. "We delivered another excellent software performance, expanded services margins, and continued the momentum in our growth initiatives. Our investments in growth market countries continued to generate strong revenue growth across software, hardware and services while contributing to the company's ongoing margin expansion. Based on this performance, we are raising our 2012 full-year operating earnings per share expectations to at least $15.00."

Revenue from the company's growth markets increased 9%, and 40 countries had double-digit revenue growth. Revenue in the BRIC countries--Brazil, Russia, India and China continued their run by increasing 10%, IBM said. 

Revenue from IBM's software business was $5.6 billion, an increase of 5% compared with the Q1 of 2011. 

Revenue from IBM's key middleware products including WebSphere, Information Management, Tivoli, Lotus and Rational products, was $3.5 billion, an increase of 7% over Q1 of 2011. 

Operating systems revenue of $590 million increased 9 percent compared with the prior-year quarter.

WebSphere grew 16% year over year. 

Information Management software revenue increased 5%.

Revenue from Tivoli software increased 5 percent. 

Revenue from Lotus software was flat. 

Rational software increased 1 percent.

 

Revenue from the company's business analytics operations across services, software and hardware segments increased 14%.

"We continued our strong performance in software," said Mark Loughridge, senior vice president and chief financial officer for Finance and Enterprise Transformation at IBM, in a call with analysts. "Software profits were up 12 percent, driven by growth in business analytics, cloud and Smarter Planet businesses," he said.

Loughridge said IBM's growth initiatives of business analytics sales rose 14% year over year, cloud-related revenue doubled and Smarter Planet revenue grew more than 25% year over year. In addition, growth markets, another of IBM's key growth initiatives, grew 9 percent year over year.

IBM's Global Technology Services segment revenue rose 2% to $10.0 billion, and the company's Global Business Services segment revenue was down 2 percent to $4.6 billion.

Hardware has become a commoditized business over the last decade.  Hardware profit margins remain lower due to competition and difficulties to create a differentiated product in the computer systems markets. 

While IBM has operating margins in the 20% range, companies such as Hewlett-Packard are more dedicated to hardware, and have operating margins below 7%. HP is increasing its exposure to services lately, and that is most likely the correct move for HP.

HP investors would have done much better if management had followed IBM's transformation back in 2000.

This focus on high margins business has provided the company with strong cash flows which IBM has put to work by growing dividends and shares buybacks. IBM has increased dividends for 16 consecutive years and continues their active share buyback program.

 

Published by myITview.com 

Increasingly, the role of collaboration is driving innovation within the organization. The C-Suite is quickly realizing the power of collective intelligence and the effect it can have on both the top and bottom lines.

Collaboration throughout all levels of the organization is creating a faster pace of innovation, bringing new ideas to fruition faster.  

Hard savings are typically realized by the deployment of unified communication and collaboration technologies within an organization and especially within the C-Suite. These savings  will of course vary based on the mix of existing and new potential collaboration opportunities within the C-Suite.  Once the decision to  invest in the technology is made and implementation and roll-out are complete the ROI begins and increasingly grows as adoption increases across the enterprise. Taking a top down approach to implementation starting with the C-Suite makes sense for many organizations.

Most companies initially realize the collaboration investment value through money saved on traditional expense items such as travel, office space, and IT expenditures associated with facilities and infrastructure.

Finding ways to let employees come together in groups to work will  provide significant business benefits to the C-Suite. These  include faster problem resolution, more innovative ideas generations as well as a quicker time to market and implement new programs and service offerings.

As a growing portion of the workforce is mobile and global in nature, many organizations and collaboration professionals see improved ROI in systems which leverage collaboration technologies.

The benefits of collaboration tools beyond reduced operational costs may at first be difficult to measure simply because the business benefits of collaboration technologies come from examining the business processes they enable. This includes the way the C-Suite communicates, shares content, and shares resources on joint project initiatives.

Within the C-Suite most often these processes are specific to a particular job function such as budgeting or finance for the CFO, or project management for the CIO or CTO. The effective ROI measurements the business can make occur once the collaboration tools are in place and used throughout the C-Suite and then the rest of the organization. This is when the value of collaboration tools are seen to help a business thrive.

Most unified communications and collaboration solutions simplify the proliferation of technologies that businesses deal with every day. They help to eliminate the inefficiencies in communications which can make organizations more productive and responsive. 

Unified communications solutions may also be seamlessly integrated within your organization. For Example, they enable you to reply to email with your voice, turn an IM into a conference call or answer your desk phone from outside the office - no matter how, where, or when you communicate, you will  have seamless access to the same familiar interfaces and corporate resources.

It is important then as the CIO introduces a specific business collaboration technology solution offering to the C-Suite that he is sure to align the technology decisions with the overall needs of the C-Suite, the people, and their business's objectives in an integrated manner.

 

The cost of training is always weighted against its benefits. According to Bersin & Associates from "The Corporate Learning Factbook", the  percentages cited below represent the year-over-year change in total training spending in 2011 by various industries.

Note that the overall IT training budgets for 2012 are flat with no growth projected for 2011. To what can we contribute this 0% growth in IT training to within our organizations? Is is a reflection on the overall economic landscape? Not according to a recently published Gartner report that shows IT spending is projected to growth at 2.5% in 2012.

The 2.5% growth forecast is less than previously predicted, but more because of a stronger U.S. dollar than due to slowing IT spending.

Gartner analysts reiterate the outlook for global IT spending is improving, despite saying that it would grow 2.5% in 2012, a decline from the 3.7% previously forecasted.

Manufacturing, +12%

  

Business services and Consulting, +9%

Healthcare, +8%

Retail, +8%

Banking, +6%

Technology, 0% change

Insurance, -1%

Government, -6% 

 

In this recent survey by PulsePoint Group, researchers found that the most socially engaged enterprises are experiencing business value returns four times higher than those who have the least social engagement presence.

The following trends were noticed based on a range of areas including sales effectiveness, operating margins, revenue growth, and product innovation:

1. Extensively engaged businesses reported a 7.7% business impact on these key areas specifically from their social engagement.

2. Those with limited social engagement presence reported a 3.9% business impact.

3. Those those with the lowest social engagement presence reported 1.9% business impact.    

4. Social engagement today is defined as online listening (28%), blogging (24%), and building relationships with online influencers (21%).

5. Most senior executives in the US and Canada see a variety of advantages from their social engagement. 

6. 84% site improved marketing/sales effectiveness as a benefit of social engagement. 

Also sited as advantages from their social engagement presence are increased market share (81%), improved product/service quality (68%), improved brand or stock value (67%), improved collaboration with partners (65%), and improved speed to market/innovation (65%).

The top approaches for measuring social engagement initiatives in the next 2 years are anticipated to be benchmarks (33%) and key performance indicators (30%) . 

 

 

Published by myITview.com 

Meg Whitman, chief executive of Hewlett-Packard, this week took the first step on what she warned will be a long road back for Silicon Valley’s broadest computing conglomerate. The decision to merge HP’s PC and printer divisions is also the first demonstration of a management approach that Ms Whitman hopes can be applied to the company’s other businesses. The core of the plan: fewer products, lower costs, greater simplicity of operations.

“It took us a while to get where we are, and it will take us a while to get out,” Ms Whitman declared on Thursday as she addressed HP’s annual shareholder meeting for the first time since she took the top job at the company in September. The former chief executive of Ebay last month painted a bleak picture of HP’s immediate business prospects, as it revealed in its latest earnings report that it was losing ground on all fronts.

That there will be no quick fixes was evident from the reaction to HP’s plan to combine its PC and printing businesses. Together, the divisions account for roughly half of its sales, and analysts anticipated a difficult period ahead as Todd Bradley, already head of the PC division, seeks to streamline the combined operations.

Ms Whitman used her speech to shareholders to issue a rallying cry for a company that she said still held a leading position in virtually all of its markets. However, she also said that it would need to prune its product lines heavily and hinted at big job cuts to come, declaring: “Our cost structure is not sustainable.”

HP’s shares slipped by more than 6 per cent on the week.

 

 

 

Cross posted from FT.com 

Identifying a gap in technology and moving fast to close the gap and bring a product to market faster than the competition is a great way to launch a technology security company. 

That is exactly what the security and firewall company Palo Alto Networks has done. Their firewall technology has leap-frogged the competition by providing next-generation firewalls that may be deployed in a variety of locations in the enterprise.

Palo Alto Network's context aware solutions provide visibility and control of network traffic based on applications, users, and content. This enables an organization to safely enable applications and prevent threats while in many cases by simplifying your existing infrastructures. 

This is something that Cisco, the traditional networking equiptment and security market leader has been slow to deliver on - at least until recently. Cisco is set to launch a competing product very soon.

Cisco's firewall business has been losing market share to the much smaller neighbor and rival Palo Alto Networks.

Cisco has announced its own next-generation "context aware" firewall that it promises will deliver even more value than Palo Alto's firewall solutions. Cisco is extending the Cisco Adaptive Security Appliance, their widely deployed firewall platform, with the new Cisco ASA CX Context-Aware Security solution.

 According to Cisco, this solution enhances the ASA platform well beyond the capabilities of existing “next generation” firewalls by providing unprecedented visibility into security threats and highly-customizable application access control. The Cisco ASA CX enables administrators to control which devices and users have access, and which type of access, to network resources and more than 1,000 applications and 75,000 micro-applications.

The announcement was made recently by Cisco just before the official start of the RSA Conference in San Francisco. 

Palo Alto Networks was first to recognize the need for next-generation, context-aware firewalls, which can detect different applications, users and devices -- not just IP addresses.

A recent report from research firm Gartner listed relative newcomer Palo Alto Networks as a leading vendor in enterprise network firewalls. The report also stated that the firewall market is undergoing a period of evolution.

According to Chris Young, SVP of Cisco's security and government group, the Cisco strategy  will be to embed similar context-aware security capabilities into its infrastructure equipment, just like it has done with voice, video and data. The network is the glue that ties together the apps, the data, the devices and the users. This is where the security should and will reside with Cisco products.

Chris Young says, "“Instead of taking a firewall-only approach, Cisco has taken a context-aware approach where the firewall is a living, breathing and dynamic part of the highly secure network. Cisco is building security into the network, utilizing all of the unique ability of the network to deliver context, intelligence and control. No part of your infrastructure knows more about what's happening in the environment than the network. We are bringing that powerful contextual awareness forward, starting with our firewall."

At Cisco's recent press conference , company execs gave a demo of its new firewall technology, which lets administrators track how employees are using apps across a range of devices. 

Cisco CEO John Chambers has publicly made it a mandate that the security business is now a priority for Cisco.

Palo Alto Networks launched its context-aware firewall several years ago while Cisco is launching their product today because they believe their customers want security built into the network. 

When it comes to computer network security there is plenty of room for multiple large vendors to innovate given the rapid rise in global cyber security threats.

 

 Published by myITview.com

CIOs you should probably send a memo to you CISO, advise them that nearly 4.3% of all smartphones are lost or stolen annually. If you do not have a CISO then perhaps you should send a memo to yourself.

A recent study by McAfee and Ponemon Institute titled “The Lost Smartphone Problem,”  attempts to determine how many employees’ smartphones are lost or stolen annually.  Additionally, the study tries to determine the consequences of these lost cell phones on organizations.