building a service research and innovation community

© 2008 IBM Corporation04/08/23

IBM Research

Service Research & Innovation: Staying Competitive

Kris Singh

PresidentService Research & Innovation Institute

Service Science ResearchIBM Almaden Research center

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Research Overview © 2008 IBM Corporation

Agenda

IBM Research Focus Areas/Priorities

Major Technology/Business Trends

Service Research & Innovation Institute: Strategy/ Alignment

What & How about “Service Research & Innovation”

Open discussion

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IBM Research Worldwide

Watson Zurich

Almaden

Austin

Haifa

Tokyo

India

China

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Evolution of Research focus/strategy:

Corporate funded research agenda

Technology transfer

Centrally funded

1970's 1980's 1990's 2000's

Collaborative team

Shared agenda

Effectiveness

Joint programs

Work on client problems

Research in the marketplace

Create business advantage for clients

Industry-focused research

On Demand Business Research

Work on client-specific technology, business problems

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Diversity of Disciplines at IBM Research

ChemistryComputer Science

ElectricalEngineering

Materials Science Mathematical

Sciences PhysicsService Science

Behavioral Sciences

BusinessInnovation

TechnologyInnovation

Social Innovation

Demand Innovation

Science & Engineering

Business & Management

Social & Cognitive Sciences

Economics & Markets

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IBM Game Changing Technologies for 2009

Smarter Planet

Cloud Cloud Computing & Computing & VirtualizationVirtualization

Services Science Services Science InnovationInnovation

Open Collaborative Open Collaborative ResearchResearch

• Software Quality• Privacy & Security • Accessibility• Artifact-Centric Models

Multi-Core / Cell Multi-Core / Cell ProcessorsProcessors

• Clinical Decision Support• Managing Business Integrity• 3D Multimodal Mobile Platforms• Dynamic scripting Languages

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Technological Disruptions

1939 First Cash-dispenserIn New York by Bank of New YorkBut removed after 6 month due to low customer acceptance

1980

mag-stripe or carbon radiation Voucher1967 Barclays Bank, LondonJohn Shepherd-Baron

PIN Card1965 James Goodfellow

Network

1880

Modern networked ATM1968 Don Wetzel, Docutel

1920 1940 1960 2000 2020

Phonograph 1887

2 minutes

LP Records 33 1/3

1930

22 minutes per side

78 RPM Becomes Standard

1925

First CD Released

1982

80 minutes per side

Audio Cassettes

1964

60 minutes per side 1

98

2 A

na

log

/ D

igit

al

Div

ide

Sony Walkman

1979

Capacity 20 Songs

1969 Internet

1888 First AC Motor

1873 First DC Motor

First iPod

2001

1000 Songs

BusinessModel

iPod

2007

40000 Songs

iPhone

2007

CellphoneReplaces need for ATM ???

1999

1979 First Cell network in Japan

MP3 1989

patented

Ba

nk

's v

iew

of

the

co

ns

um

er

Mu

sic

co

ns

um

er'

s d

em

an

d

Electro Mechanical Computers Emerge Digital Age

4 minutes one side

1983 PC Banking

1876 Bell Telephone Patent

Internet Banking

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0 25 50 100 125 150

Automobile

75

Years

50

100TelephoneElectricity

Radio

Television

VCR

PC

Cellular

Inte

rnet

% A

do

pti

on

Creating new industries and scaling them rapidly

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Individual/ Consumer Focused

Enterprise Focused

TraditionalIT Industry

High Business Value

Lowest Cost IT Producer

The traditional IT industry is undergoing fundamental shifts

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IT –Total Cost of Ownership

Source: Intel, Gartner. IDC

People +People +ProcessesProcessesPeople +People +

ProcessesProcessesIT ServicesIT Services

(TCO)(TCO)IT ServicesIT Services

(TCO)(TCO)

==== CapabilityCapability QualityQuality AvailabilityAvailability

CapabilityCapability QualityQuality AvailabilityAvailability

$50B + $450B $600B = ~$1.1T$50B + $450B $600B = ~$1.1T$50B + $450B $600B = ~$1.1T$50B + $450B $600B = ~$1.1T

SystemsSystemsSystemsSystemsUtilitiesUtilitiesUtilitiesUtilitiesHW ($200B)

SW ($180B)

(total annual world-wide IT expenditures are ~ $1.1T -- US accounts for ~50% of total)

Servers $60B Storage, Netwk,

& Misc. $60B

Clients $150B

Payroll $300BProf. Services

$300B

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IT Services E2E Performance Measurement

Up/Down Detection

Performance Monitoring

Service Level Monitoring

Recovery Actions

Root Cause Analysis

Service LevelMGMT

Business Service MGMT

VA

LUE

We A

re

Here

BusinessProcess Oriented

ServiceApplication Oriented

InfrastructureTechnology Silo Oriented

CHAOTIC REACTIVE PROACTIVE PREDICTIVE

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Service Management demands innovative solutions

$0

$50

$100

$150

$200

$250

$300

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Installed Base(M Units)

Spending(US$B)

New server spending

Server mgmt and admin costs

Power and cooling costs

0

5

10

15

20

25

30

35

40

45

50 Costs to manage systems has doubled

since 2000 Costs to power and cool systems has

doubled since 2000 Devices accessing data over networks

doubling every 2.5 years Bandwidth consumed doubling every 1.5

years Data Doubling every 18 months1

Server processing capacity doubling every 3 years2

10G Ethernet ports tripling over the next 5 years

Source: IDC, 20081WW TB Capacity Shipped on Enterprise Disk Storage Systems2Server processing consumption doubles every 3 years

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Data Explosion

High usefulness densitySimple analytics Well defined eventHigh speed (million events per

sec)Very low latency

Lower usefulness densityComplex analytics

Event needs to be detected High volume (TB/sec)Low latency

text and transactional data news broadcasting

digital audio, video and image data

RFIDfinancial data network packet traces instant messages

satellite dataphone conversations

web searchesATM transactions pervasive sensor data

click streams

Large spectrum of data

Unknown data/signal

Unstructured dataUnstructured dataStructured dataStructured data

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Manage data and content over its lifetime and as

part of processes

Information On DemandUnlocking the Business Value of Information for Competitive Advantage

Better BusinessOutcomes

Customer & Product Profitability

Workforce Optimization

Dynamic Supply Chain Multi-Channel

Marketing

Financial Risk Insight

Business Optimization

Flexible Architecture for Leveraging Existing Investments

OtherInformationSources

Establish and maintain an accurate, trusted view of

information

Plan, understand and optimize business performance

End-to-EndCapabilities

Plan, understand and optimize business

performance

Establish and maintain an accurate, trusted view of information

Use data and content as part of business

processes

Manage data and content over its

lifetime

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Automated Data Loaders

Business Intelligence/Analytics

Enterprise Data

Warehouse

Static Managed file

ROOs

ODSODS

Manual Data EntryManual Data Entry

Records of Origin

Records of Origin

ODSODS

ODSODS

Records of Origin

Records of Origin

Business LevelAnalytical Reports

Canned Drill down

OperationalAnalytics

Ex

tra

ctT

ran

sfo

rmL

oad

OLAP Cubes

Reporting Database

Reporting Database

OperationalIndicators

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Focus on Business Optimization is AcceleratingCreating an Information Agenda Now is Critical for Sustained Competitive Advantage

Business Optimization Growth is 2 Times Faster thanBusiness Automation

Includes Hardware, Software and Services. Does not include Networking, Printer, or Standalone Printer or PC Markets. CGRs 2006 – 20011. Opportunity estimates based on analysis done by the IBM Market Intelligence Department. IBM Market Intelligence data is provided for illustrative purposes and is not intended to be a guarantee of market opportunity.

5.1% CGR$594B

11.1% CGR$117B

IT Spending Estimate*

2008Application Agenda

Information Agenda

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Operational Cloud

Cloud Computing

R&D Cloud

Sales Cloud

ProductMgmt

CodeUnitTest

Hardware, Network, Power, Building

Change Management

Security Management

Availability Management

Performance Management

Lead Gen

SystemTest

AwarenessBusinessPractices

Sales

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$100/user/Month

$10$1

Traditional

SaaSInternet

Moore’s Law for Software

IBM Research


Mobile Cloud ?

NYSE10M

VISA100M

Google200M Mobile

????

Transactions Per Day

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Projected U.S. Employment Growth, 2004 - 2014

U.S. Bureau of Labor Statistics. http://www.bls.gov/opub/ooq/2005/winter/art03.pdf

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Nation A %

G%

S%

ServiceGrowth

China 50 15 35 191%

India 60 17 23 28%

U.S. 3 27 70 21%

Indonesia 45 16 39 35%

Brazil 23 24 53 20%

Russia 12 23 65 38%

Japan 5 25 70 40%

Nigeria 70 10 20 30%

Bangladesh 63 11 26 30%

Spain 3.4 30 66 53%

Ten NationsTotal 50% of World Wide Labor

A = Agriculture, G = Goods, S = Services 1980-2005PC Age

2005United States

The largest labor force migration in human history is underway, driven by global

communications, business and technology growth, urbanization and low cost labor

(A) Agriculture:Value from

harvesting nature

(G) Goods:Value from

making products

(S) Services:Value from enhancing the

capabilities of things (customizing, distributing, etc.) and interactions between things

Global Service Economy

International Labor Organization

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Service System/Network1. People 2. Technology3. Shared Information4. Organizations

connected by value propositionsComputational System

More transistors, more powerfulRequires investment roadmap

Moore’s Law for “Services”?

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Service Research & Innovation Institute

Mission:

SRII, a non-profit organization, the world's leading professional organization for the advancement of Service Research and Innovations required to drive improved productivity and quality for the Technology Industry, Organizations and Society at large

Strategy:

Build Service SIGs around:

-- Major Service Industry Verticals

-- Major Domains/Disciplines

Align existing Service Research Organizations/SIGs under SRII Umbrella

SRII Membership Model:– Industry (large, medium, small), Institutions, Individual professionals

University Program/Partnership: Research, Curriculum development

Almaden Research Center

IBM Service Science Research

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Service Industry Verticals

Heath care

Financial

Energy

Education

Government

Telecom

Transportation

Retail

Etc..


Almaden Service Science Research © 2007 IBM Corporation

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Major Domains/Disciplines

Technology (Architecture/Platform, Hardware, Software, Infrastructure)

Service Business--Process/Tools/Models

Service Operation management

Service Management/Leadership

Service Marketing

Human Factor Engineering/ Skill sets

Professional Services (IBM, Accenture,..etc)


IBM Service Science Research © 2007 IBM Corporation

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Special Interest Group (SIG)

SIG Name:

Background:

SIG Lead/SIG members:

Define Strategy: “what” & “how”

Define Roadmap/Deliverables/Goals: --- “when” & “measurement metrics”

Define SIG Communications Process/Tools: --Meetings, Web site, Research papers, Conferences


IBM Service Science Research © 2007 IBM Corporation

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Service Organization/SIG Partnership INFORMS Service Science SIG

AMA Service SIG

IEEE Service SIG

ACM Service SIG (proposed)

SSPA/ TPSA ITRI

CISRO/ICT- Australia


IBM Service Science Research

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The Rising Tide of GlobalizationEconomics, Expertise, Openness

InnovationCombining technology with insight to create new value

Network UbiquityMore than a billion Internet users and three billion wireless subscribers worldwide

Today’s Overarching Realities21st Century Drivers of Change

Cross-disciplinary programsand degrees

Fusing technical competency with industry-specific knowledge and business-process expertise

Success requires open collaboration among academia, government and industry

The 21st Century Demands Uniquely-Skilled People

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SRII--- Platform to drive Service Innovation

Get Involved!

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Visit us inSan Jose, CA USA

IBM AlmadenResearch Center

Email:[email protected]

Open Discussion

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building a service research and innovation community

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