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Service Research & Innovation:  Staying Competitive  Kris Singh President Service Research & Innovation Institute Service ...
Agenda <ul><li>IBM Research Focus Areas/Priorities </li></ul><ul><li>Major Technology/Business Trends </li></ul><ul><li>Se...
IBM Research Worldwide Watson Zurich Almaden Austin Haifa Tokyo India China
Evolution of Research focus/strategy: Work on client-specific technology, business problems <ul><li>Corporate funded resea...
Diversity of Disciplines at IBM Research Chemistry Computer Science Electrical Engineering Materials Science Mathematical ...
IBM Game Changing Technologies for 2009  Smarter Planet Cloud Computing & Virtualization Services Science Innovation Open ...
Technological Disruptions 1939 First Cash-dispenser In New York by Bank of New York But removed after 6 month due to low c...
Creating new industries and scaling them rapidly 0 25 50 100 125 150 Automobile 75 Years 50 100 Telephone Electricity Radi...
The traditional IT industry is undergoing fundamental shifts   Traditional IT Industry High Business Value Individual/ Con...
IT –Total Cost of Ownership Source:  Intel, Gartner. IDC People + Processes IT Services (TCO) = <ul><li>Capability </li></...
IT Services E2E Performance Measurement  Up/Down Detection Performance Monitoring Service Level Monitoring Recovery Action...
Service Management  demands innovative solutions $0 $50 $100 $150 $200 $250 $300 1996 1997 1998 1999 2000 2001 2002 2003 2...
Data Explosion <ul><li>High usefulness density </li></ul><ul><li>Simple analytics  </li></ul><ul><li>Well defined event </...
Information On Demand Unlocking the Business Value of Information for Competitive Advantage Manage data and content over i...
Business Intelligence/Analytics Automated Data Loaders ROOs ODS Records  of Origin ODS ODS Records  of Origin Extract Tran...
Focus on Business Optimization is Accelerating Creating an Information Agenda Now is Critical for Sustained Competitive Ad...
Cloud Computing Operational Cloud R&D Cloud Sales Cloud Product Mgmt Code Unit Test Lead  Gen System Test Awareness Busine...
Moore’s Law for Software $100/user/ Month $10 $1 Traditional SaaS Internet
Mobile Cloud ? Transactions Per Day NYSE 10M VISA 100M Google 200M Mobile ????
Projected U.S. Employment Growth, 2004 - 2014 U.S. Bureau of Labor Statistics.  http://www.bls.gov/opub/ooq/2005/winter/ar...
Global Service Economy   Ten Nations Total 50% of World Wide Labor A = Agriculture, G = Goods, S = Services 1980-2005 PC A...
Moore’s Law for “Services”? Service System/Network 1. People  2. Technology 3. Shared Information 4. Organizations connect...
Service Research & Innovation Institute <ul><li>Mission:   </li></ul><ul><li>SRII, a non-profit organization, the world's ...
Service Industry Verticals <ul><li>Heath care </li></ul><ul><li>Financial </li></ul><ul><li>Energy </li></ul><ul><li>Educa...
Major Domains/Disciplines <ul><li>Technology (Architecture/Platform, Hardware, Software, Infrastructure) </li></ul><ul><li...
Special Interest Group (SIG) <ul><li>SIG Name:  </li></ul><ul><li>Background: </li></ul><ul><li>SIG Lead/SIG members: </li...
Service Organization/SIG Partnership <ul><li>INFORMS Service Science SIG </li></ul><ul><li>AMA Service SIG </li></ul><ul><...
Today’s Overarching Realities 21 st  Century Drivers of Change The Rising Tide of Globalization Economics, Expertise, Open...
SRII--- Platform to drive Service Innovation <ul><li>Get Involved! </li></ul>
Open Discussion Visit us in San Jose, CA USA IBM Almaden Research Center Email: [email_address]
 
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Building a Service Research and Innovation Community

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  • We have about 3,195 employees worldwide between the 8 labs. 1945 - IBM&apos;S FIRST RESEARCH LAB. IBM&apos;s first research facility, the Watson Scientific Computing Laboratory, opened in a renovated fraternity house near Columbia University in Manhattan. In 1961, IBM moved its research headquarters to the T.J. Watson Research Center in Yorktown Heights, New York. Today, IBM Research operates Laboratories in the United States, Switzerland, Israel, Japan, China and India. The Watson Research Center is located in Westchester County, New York (both the Watson site and the Hawthorne site) and in Cambridge, Massachusetts. Approximately 1843 employees work between these 3 sites. The research focuses primarily on physical and computer sciences, semiconductors, systems technology, mathematics and information services, applications &amp; solutions. The Almaden Research Center (ARC) in California was dedicated in 1986 &amp; is our focal point for storage, database, and data-related research. About 438 of our employees work there. Almaden is just a short ride from IBM&apos;s development labs in San Jose and Santa Teresa. Our laboratory in Zurich, Switzerland (ZRL) , founded in 1956 , has about 210 employees and is noted for its Nobel prizes in 2 areas: superconductivity and scanning tunneling microscopy. It is the focus for our research into communications technology. The token ring communications protocol was invented and developed here--an important innovation and the entree to expanding our business. Recently, Zurich made key contributions to our ATM technology. The Austin Research Lab (ARL), in Texas , was launched in Sept &apos;95 seeking to break new ground in the field of microprocessors - and demonstrate new kinds of interactivity between Research and IBM&apos;s development teams. Focus areas include: high performance/low power VLSI design and tools, power aware systems and exploratory architectures, and simulation tools modeling for IBM large systems. Austin has about 50 employees. The IBM Tokyo Research Laboratory (TRL) was established in 1982. Researchers at TRL are active in analytics and optimization, software engineering, middleware, system software, security and compliance, electronical and optical packaging technology, engineering and technology services, text mining and speech technology, and accessibility technology. TRL has about 190 employees. Over 400 individuals work at the IBM Haifa Labs (HRL) ; 25 percent of the technical staff have doctorate degrees in computer science, electrical engineering, mathematics, or related fields. Employees are actively involved in teaching at Israeli higher education institutions and supervising post-graduate theses. Many employees have received IBM awards for achievements and excellence. Since it first opened as the IBM Scientific Center in 1972 , the IBM Research Lab in Haifa (HRL) has conducted decades of research that has been vital to IBM’s success. R&amp;D projects are being executed today by HRL for IBM labs in the USA, Canada, and Europe, in areas such as storage systems, verification technologies, multimedia, active management, information retrieval, programming environments, optimization technologies, and life sciences. &amp;quot; 1995 - China Research Laboratory (CRL) opened in Beijing. The event symbolized IBM&apos;s commitment to ushering in a new age of shared technology and partnership for the development of China. China has about 132 employees. CRL is located in Shangdi, in the northwest of Beijing. CRL has been growing steadily and it currently has over 100 technical staff members. Researchers at CRL are active in multi-modal interactions such as voice and visual, intelligent information management, pervasive computing, e-business technologies and Service computing. The IBM India Research Laboratory (IRL) was established in 1998 in Delhi, India. Researchers in IRL work in the areas of distributed computing, software engineering, information management, pervasive computing, bioinfomatics, speech recognition for Indian languages and autonomic computing, among others. About 95 employees work here. Regular Employee count updated 1/27/05 – info from Tim Geraghty
  • 05/21/10 IBM Research is able and willing to work with customers directly, and we have various ways of doing so: FOAK (First of a Kind) Wealth Management, ePayments (current FOAKs in FSS in 2002) Joint programs (maybe as part of a larger IGS engagement) Evolution of Role Our role has evolved to reach our goal and gives an indication of where we are headed. In the early days of Research, we were substantially inwardly focused; we tended to &amp;quot;mind the science&amp;quot; and assume that IBM&apos;s developers would pick up the best of our work. That mode of operation had its virtues when we were young -- for one thing, it made us very attractive for the best young scientists, some of whom are now among our senior executives. Nevertheless, we found that moving an idea or even a prototype from &amp;quot;research&amp;quot; to development was not simple, and we eventually agreed with the developers to put in place &amp;quot;joint projects&amp;quot;. These are programs in which a substantial part of the work force is researchers working in research sites, but funded by a product group. Working with them are other researchers, funded out of our base budget, and -- most important -- developers, in their own sites. Thus, by establishing links early in the programs, and by starting with a shared vision and a shared agenda, we have been able to greatly smooth the transfer of ideas into development. More recently, we are expanding our view still more, with the idea of developing joint-program-like activities with customers. Now, we leverage multiple disciplines in Research to lead customers and provide them with competitive advantage. Today, about 1/3 of the people in Research are funded by our lines of business as &amp;quot;joint program headcount&amp;quot; and about 2/3 are centrally funded. In the past we were mostly centrally funded CAPTION: the foil shows the progress over time from an organization that worked mainly with colleagues in the world of science and technology to one that also worked with other IBM units, to one that works, with customers, and today, lead our customers as well. First of a Kind: Once IBM Research feels a technology has reached a level where practical benefit can be achieved, it partners with a leading-edge client that is prepared to try the technology in a real-world situation. One early example of a highly successful &amp;quot;first of a kind&amp;quot; project was IBM&apos;s teaming with New York’s Memorial Sloan-Kettering Cancer Center and Massachusetts General Hospital in Boston. The project resulted in MedSpeak, a specialized speech recognition application for radiologists, whose distinct technical vocabulary made recognition easier. As the technology improved, IBM expanded into legal dictation and then general products, establishing its ViaVoice line as a leader in the speech recognition marketplace. EBO (Emerging Business Opportunities): Following a practical demonstration through a first-of-a-kind project or similar initiative, IBM works with a broader range of clients to examine the common needs for the technology and identify strategies to bring the technology to market. Technologies at the emerging-business-project phase include: &amp;quot;Project WF&amp;quot; — looks for relationships in unstructured information and uses crawler technology to bring back terms and relationships (e.g., learns from statistical analysis that Lou Gerstner is a person, and is related to IBM through the “chairman of the board” relationship), with the aim of improving access to and management of unstructured information Distributed matchmaking — uses innovative algorithms for complex matching of buyers and sellers in e-marketplaces High-volume messaging — examines the future of messaging, including publishing large amounts of dynamically changing content while handling very large peak loads, building on IBM’s experience in managing highly accessed Web sites such as Wimbledon and the U.S. Open tennis tournaments (as published in: http://www.gartner.com/reprints/ibm/102530.html)
  • [ Please note : This slide builds in 2 sections. The first illustrates the traditional scientific disciplines, and the second illustrates the non-traditional.] -- And what do we look for in candidates? -- There was a time when we looked for people with fairly traditional science and engineering backgrounds in Computer Science, Mathematics, Chemistry, Engineering and Physics -- But now, we’re finding, that given our increased work with clients as well as a renewed emphasis on developing technologies that yield greater societal impact, researchers with non-traditional engineering backgrounds is becoming more and more important….Business, Physics, Sociology, and Biology Chemistry: To make today&apos;s computer products requires a great deal of advanced chemistry -- such as that needed to make chemically-amplified photoresists for sub-micron lithography or to make polymers with electrical properties unlike anything found in nature. IBM Research scientists are on the cutting edge in many areas of chemistry, including those that underlie lithography, lubricant, and display development. Computer Science: IBM researchers have contributed many landmark technical innovations including: compiler optimization (FORTRAN), relational database (SQL and DB2®), speech recognition (ViaVoice), Reduced Instruction Set Computers (RISC - RS/6000 and Power PC), fractals, cryptography and security (DES encryption and HMAC message authentication), scalable parallel systems (RS/6000 SP), the Deep Blue chess playing computer, the BlueGene/L supercomputer and key contributions to Web Services standards and middleware (WebSphere®). Electrical Engineering: IBM has a long history of leadership in hardware to support the global information technology industry. In addition to basic research, the Research Division works closely with product groups and is involved in all aspects of computer hardware development, drawing on the disciplines of electrical engineering and related sciences. Leading-edge semiconductor process technology is developed in Research and used to explore future device and circuit ideas. Even more advanced concepts are being pursued in the Nano-science and Nano-technology area. Materials Science: The development and application of new materials has provided the technological basis for the semiconductors, storage devices, displays, and systems integration that today are the basis of the electronics industry. Semiconductors are based on silicon because materials research identified the superior properties of SiO2 as an insulator. IBM&apos;s record storage densities are based on extensive research in magnetic materials. Flat panel displays are based on early research in liquid crystals and amorphous silicon. IBM Research is a world leader in identifying new materials and processes not only to extend current technologies but to provide the exploratory materials for tomorrow&apos;s technology. For example, current research on novel insulators, organic semiconductors, and nanoscale magnetic materials promise further increases in computer performance at ever lower cost. Mathematical Sciences: We are a center for basic and applied research in the mathematical sciences and related areas. The Department has three overall objectives: to conduct research on a broad range of theoretical and applied topics; to work with IBM and its customers to find new ways that mathematical sciences can help solve their problems; to work with other parts of IBM to effectively deliver these solutions. Achieving these goals helps IBM maintain leadership in the global information technology industry. One of IBM&apos;s strengths is our ability to deal with all aspects of information technology -- hardware, software, systems, and applications. Mathematical Sciences affects all areas, ranging from more efficient arithmetic calculations on chips to the invention of the Trackpoint for the Thinkpad to the creation of sophisticated systems for the evaluation and management of risk. Physics: Physics &amp;quot;deals with matter and energy and their interactions&amp;quot; (Webster) across a range of fields, including electricity, magnetism, and optics. These three fields correspond closely with the key ingredients in a modern computer: microelectronics, storage, and displays. Thus it is no surprise that physics plays a key role in IBM, spanning the entire range of computer technology. Some of our physics research is aimed at improving and further developing existing technologies. Other projects hope to overthrow existing technology and create new paradigms that will continue to drive the information revolution. Some research areas make use of the tremendous computational power now available to solve &amp;quot;grand challenge&amp;quot; problems such as protein folding, or they utilize deep, specialized knowledge developed at IBM to explain long standing riddles in areas such as astronomy. The interplay between physics and computers has benefited both sides -- a situation that is not likely to change anytime soon. Service Science, Management &amp; Engineering: Service science, Management and Engineering hopes to bring together ongoing work in computer science, operations research, industrial engineering, business strategy, management sciences, social and cognitive sciences, and legal sciences to develop the skills required in a services-led economy. The world economy is experiencing the largest labor force migration in history. Driven by an environment that includes global communications, business growth and technology innovation, services now accounts for more than 50 percent of the labor force in Brazil, Russia, Japan and Germany, as well as 75 percent of the labor force in the United States and the United Kingdom. Picture here is of 2004 accomplishment EPA. The Enterprise Privacy Architecture (EPA) has established IBM as a clear leader in privacy management. The development of EPA was led jointly by Research and Business Consulting Services (BCS), in conjunction with Tivoli and the office of the Chief Privacy Officer (CPO). Technical contributions from Research made EPA a significant asset for IBM Global Services (IGS): EPA is the basis for all privacy consulting engagements of BCS. Besides being used by major enterprises, EPA has won praise from corporate and government privacy officers and has resulted in a major shift in privacy-research directions in academia. Behavioral Sciences: The history of HCI (human computer interaction) is one in which we have experienced a gradual shift from attempts by different parts of the community to focus on their own narrow view of the field to a more cooperative effort to understand what it means to build systems that people value. over the years, The HCI community has looked for ways in which dialog between behaviorally and technically oriented researchers might lead to more productive end results.
  • 05/21/10 Picture sources: http://commons.wikimedia.org/wiki/Image:EdisonPhonograph.jpg http://commons.wikimedia.org/wiki/Image:Portable_78_rpm_record_player.jpg http://commons.wikimedia.org/wiki/Image:Tdkc60cassette.jpg http://commons.wikimedia.org/wiki/Image:CD_autolev_crop.jpg http://news.sel.sony.com/en/corporate_information/company_of_firsts http://en.wikipedia.org/wiki/IPod http://en.wikipedia.org/wiki/Iphone ATM Source: http://en.wikipedia.org/wiki/Automated_teller_machine http://en.wikipedia.org/wiki/Online_banking
  • A question I would like to leave you all with today is the question - What limits growth rates for new inventions? Clearly one measure of growth is customer adoption. How long does it take for new knowledge to work its way through complex business and societal systems to benefit customers? I would suggest that in each case, growth and adoption are limited by the build out of a service system. Automobiles require supply chains on one end, and roads and gas stations on the other end – this is service system build out. Telephones required a service system infrastructure of lines and polls and cables, but also supply chains, and directories, and operators, and laws. Electricity is another great example, nearly everyone knows the story of the light bulb, but how many know the story of how the generators, and power lines, and operators were put in place – how the service system was funded, built out, and all the details, including pricing were set. So if the build out of service systems is what limits growth, shouldn’t we get better at understanding how to improve service systems in a year over year methodical way?
  • 05/21/10
  • 3 minutes Most models for TCO focus on hardware, software and data center costs. But there’s another piece that dwarfs those expenses: people &amp; processes. In fact, studies done by research companies (IDC, Gartner) as well as Intel’s own internal data show that eBusiness and IT services require much greater expenditure on people than on these more visible elements.
  • 05/21/10
  • We believe that there are 4 key things that organizations require to unlock the business value of information for competitive advantage…and this is what Information On Demand is focused on. Organizations need the ability to manage data and content over its lifecycle to reduce the costs associated with managing information, provide controlled accessibility, and address retention and compliance requirements They must also be able to use data and content as part of the individual business processes and applications across the enterprise, optimizing the performance of applications and improving decision making…these first two requirements are addressed by data and content management capabilities. Organizations then need to establish an accurate, trusted view of information across these different processes and applications that is managed over time to drive more consistent information across the enterprise and support analytic and other requirements to use information coming from different sources, whether it’s delivering a single view of customers, products, revenue, etc…and they need a “flexible” architecture that can leverage all of their existing investments…accurate, trusted information is established through information integration, data warehousing and master data management. These first components had really been what our IOD story was addressing until recently…with the acquisition of Cognos, we are now providing our customers with the ability to leverage that trusted information to build their plans, understand how their business is performing, and focus on optimizing performance across the enterprise…and this is accomplished through business intelligence and performance management These are the main capabilities required by organizations to unlock the business value of their information and the components that can enable organizations to make that happen, but the ultimate object our clients have is to drive better business outcomes. And that’s what we are focused on with all of these components…helping our clients improve customer and product profitability, provide increased financial risk insight for better business decisions, optimize the workforce and control labor costs, enable more dynamic supply chain management, and support multi-channel, event driven marketing initiatives. And IBM provides the most complete, end-to-end capabilities for Information On Demand, with every component focused on helping customers optimize their business.
  • 05/21/10
  • 05/21/10
  • 05/21/10 376 million Visa authorized transactions on the Friday and Saturday before Christmas 2006 Based on the Compete.com data, Google is averaging 2,346 queries per second. Though the numbers are not publicly known, some people estimate that Google maintains over 450,000 servers, 3.3B Mobile phones in the world....
  • Not only is services the fastest growing part of most economies, but the US Bureau of Labor Statistics (2005) has projected that professional and business services will be the fastest growing area for jobs in the US until about 2014. Skills for professional business services and IT-related services is important to our company’s future and to the future of our clients. ----- US Bureau of Labor Statistics (2005) URL: http://www.bls.gov/opub/ooq/2005/winter/art03.pdf
  • Observation: Service sector is where the job growth is, not only in the US but around the world. Service GROWTH % for SPAIN – since 1997 to 2005 – Spain added half again as many service jobs from 8.431M to 12.909M (4.478M more service jobs) ALSO Agriculture dropped 12% and manufacturing grew 23% Implication: Most science and engineering and management jobs will be in the service sector. For example, Kenneth Smith of H.B.Maynard (one of the oldest and most prestigious industrial engineering consulting firms) said - “Historically, most of our business at H.B. Maynard was manufacturing, today roughly 80% is in the retail sector…” So why do we still train most scientist and engineers for manufacturing age jobs? Could this be part of the reason that in most US engineering schools only 50% of entering engineering students graduate with an engineering degree? The service sector is the fastest growing segment of global economies. In the US, in 1800 90% of people were worked on farms, and today less than 3% of workers are employed in agriculture. Goods, or manufacturing of physical products, peaked in the US in the mid-1950’s and has been decreasing ever since due to automation and off shoring. However, services, especially complex information and business services, as we will see is where the growth is. But the growth in the service sector jobs is not just in the developed countries, it is also happening in the developing countries. In fact, the International Labor Organization, reports that 2006 was the first time in human history that more people worker in the service sector than in agriculture world wide. 40% in service sector, 39.7% in agriculture, and 21.3% in manufacturing, with the growth coming by moving people from agriculture to services – this represents the largest labor force migration in human history.
  • What would a service science breakthrough look like? Moore’s Law is not a law of nature, but a law of investment – for the last 50 years year over year improvements have occurred. A Moore’s Law of service systems would provide an investment roadmap that would result in year over year improvements in service system productivity, quality, regulatory compliance, and innovative capabilities. In sum, Five key points IBM has the largest service research organization in the world (over 550 service researchers world wide) - In 2002, we had about 50 out of 3000 researcher, so this represents an 11x increase in five years IBM is and will increasing use advance science and engineering of service to differentiate from competitors IBM scientist and engineers (service scientist and service system engineers) are being given new tools IBM is a thought leader working with universities, governments, and industry around the world to advance service science, management, and engineering (SSME) These are early days, and the best is yet to come! Source ================== Moore’s Law http://news.com.com/i/ne/p/photo/microprocessor_400x534.jpg Physical system that performs computations Service system ecology = business &amp; societal system that creates value We define a service systems as a value coproduction configuration of: 1. people (division of labor, multi-tasking, social networks, identity, etc.) 2. technology (cost of communication, storage, processing, fidelity of models, etc.) 3. internal and external service systems connected via value propositions (pricing, risk sharing, value networks, supply chains, etc.) 4. shared information (language, laws, measures, models)
  • IBM has unveiled plans for “Blue Cloud,” a series of cloud computing offerings that will allow corporate data centers to operate more like the Internet by enabling computing across a distributed, globally accessible fabric of resources, rather than on local machines or remote server farms. IBM is currently collaborating on cloud computing initiatives with select corporations, universities, Internet-based enterprises and government agencies, including the Vietnamese Ministry of Science and Technology, which this week announced a cloud computing project with IBM.  See the press release for more information.    Also see the IBM Press Kit Cloud computing is an emerging approach to shared infrastructure in which large pools of systems are linked together to provide IT services.  The need for such environments is fueled by dramatic growth in connected devices, real-time data streams, and the adoption of service oriented architectures and Web 2.0 applications, such as mashups, open collaboration, social networking and mobile commerce. Continuing advances in the performance of digital components has resulted in a massive increase in the scale of IT environments, driving the need to manage them as a unified cloud.  
  • Transcript of "Building a Service Research and Innovation Community"

    1. 1. Service Research & Innovation: Staying Competitive Kris Singh President Service Research & Innovation Institute Service Science Research IBM Almaden Research center
    2. 2. Agenda <ul><li>IBM Research Focus Areas/Priorities </li></ul><ul><li>Major Technology/Business Trends </li></ul><ul><li>Service Research & Innovation Institute: Strategy/ Alignment </li></ul><ul><li>What & How about “Service Research & Innovation” </li></ul><ul><li>Open discussion </li></ul>
    3. 3. IBM Research Worldwide Watson Zurich Almaden Austin Haifa Tokyo India China
    4. 4. Evolution of Research focus/strategy: Work on client-specific technology, business problems <ul><li>Corporate funded research agenda </li></ul><ul><li>Technology transfer </li></ul>Centrally funded 1970's 1980's 1990's 2000's <ul><li>Collaborative team </li></ul><ul><li>Shared agenda </li></ul><ul><li>Effectiveness </li></ul>Joint programs <ul><li>Work on client problems </li></ul>Research in the marketplace <ul><li>Create business advantage for clients </li></ul><ul><li>Industry-focused research </li></ul>On Demand Business Research
    5. 5. Diversity of Disciplines at IBM Research Chemistry Computer Science Electrical Engineering Materials Science Mathematical Sciences Physics Service Science Behavioral Sciences Business Innovation Technology Innovation Social Innovation Demand Innovation Science & Engineering Business & Management Social & Cognitive Sciences Economics & Markets
    6. 6. IBM Game Changing Technologies for 2009 Smarter Planet Cloud Computing & Virtualization Services Science Innovation Open Collaborative Research <ul><li>Software Quality </li></ul><ul><li>Privacy & Security </li></ul><ul><li>Accessibility </li></ul><ul><li>Artifact-Centric Models </li></ul>Multi-Core / Cell Processors <ul><li>Clinical Decision Support </li></ul><ul><li>Managing Business Integrity </li></ul><ul><li>3D Multimodal Mobile Platforms </li></ul><ul><li>Dynamic scripting Languages </li></ul>
    7. 7. Technological Disruptions 1939 First Cash-dispenser In New York by Bank of New York But removed after 6 month due to low customer acceptance 1980 mag-stripe or carbon radiation Voucher 1967 Barclays Bank, London John Shepherd-Baron PIN Card 1965 James Goodfellow Network 1880 Modern networked ATM 1968 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 1982 Analog / Digital Divide Sony Walkman 1979 Capacity 20 Songs 1969 Internet 1888 First AC Motor 1873 First DC Motor First iPod 2001 1000 Songs Business Model iPod 2007 40000 Songs iPhone 2007 Cellphone Replaces need for ATM ??? 1999 1979 First Cell network in Japan MP3 1989 patented Bank's view of the consumer Music consumer's demand Electro Mechanical Computers Emerge Digital Age 4 minutes one side 1983 PC Banking 1876 Bell Telephone Patent Internet Banking Update Speaker Notes
    8. 8. Creating new industries and scaling them rapidly 0 25 50 100 125 150 Automobile 75 Years 50 100 Telephone Electricity Radio Television VCR PC Cellular Internet % Adoption
    9. 9. The traditional IT industry is undergoing fundamental shifts Traditional IT Industry High Business Value Individual/ Consumer Focused Enterprise Focused Lowest Cost IT Producer
    10. 10. IT –Total Cost of Ownership Source: Intel, Gartner. IDC People + Processes IT Services (TCO) = <ul><li>Capability </li></ul><ul><li>Quality </li></ul><ul><li>Availability </li></ul>$50B + $450B $600B = ~$1.1T Systems Utilities HW ($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 $300B Prof. Services $300B
    11. 11. IT Services E2E Performance Measurement Up/Down Detection Performance Monitoring Service Level Monitoring Recovery Actions Root Cause Analysis Service Level MGMT Business Service MGMT VALUE Business Process Oriented Service Application Oriented Infrastructure Technology Silo Oriented CHAOTIC REACTIVE PROACTIVE PREDICTIVE We Are Here
    12. 12. 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 <ul><li>Costs to manage systems has doubled since 2000 </li></ul><ul><li>Costs to power and cool systems has doubled since 2000 </li></ul><ul><li>Devices accessing data over networks doubling every 2.5 years </li></ul><ul><li>Bandwidth consumed doubling every 1.5 years </li></ul><ul><li>Data Doubling every 18 months 1 </li></ul><ul><li>Server processing capacity doubling every 3 years 2 </li></ul><ul><li>10G Ethernet ports tripling over the next 5 years </li></ul>Source: IDC, 2008 1 WW TB Capacity Shipped on Enterprise Disk Storage Systems 2 Server processing consumption doubles every 3 years 0 5 10 15 20 25 30 35 40 45 50
    13. 13. Data Explosion <ul><li>High usefulness density </li></ul><ul><li>Simple analytics </li></ul><ul><li>Well defined event </li></ul><ul><li>High speed (million events per sec) </li></ul><ul><li>Very low latency </li></ul><ul><li>Lower usefulness density </li></ul><ul><li>Complex analytics </li></ul><ul><li>Event needs to be detected </li></ul><ul><li>High volume (TB/sec) </li></ul><ul><li>Low latency </li></ul>text and transactional data news broadcasting digital audio, video and image data RFID financial data network packet traces instant messages satellite data phone conversations web searches ATM transactions pervasive sensor data click streams Large spectrum of data Unknown data/signal Unstructured data Structured data
    14. 14. Information On Demand Unlocking the Business Value of Information for Competitive Advantage Manage data and content over its lifetime and as part of processes Better Business Outcomes Customer & Product Profitability Workforce Optimization Dynamic Supply Chain Multi-Channel Marketing Financial Risk Insight Business Optimization Establish and maintain an accurate, trusted view of information Plan, understand and optimize business performance Flexible Architecture for Leveraging Existing Investments Other Information Sources End-to-End Capabilities 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
    15. 15. Business Intelligence/Analytics Automated Data Loaders ROOs ODS Records of Origin ODS ODS Records of Origin Extract Transform Load OLAP Cubes Reporting Database Enterprise Data Warehouse Static Managed file Manual Data Entry Business Level Analytical Reports Canned Drill down Operational Analytics Operational Indicators
    16. 16. Focus on Business Optimization is Accelerating Creating an Information Agenda Now is Critical for Sustained Competitive Advantage Business Optimization Growth is 2 Times Faster than Business 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* 2008 Application Agenda Information Agenda
    17. 17. Cloud Computing Operational Cloud R&D Cloud Sales Cloud Product Mgmt Code Unit Test Lead Gen System Test Awareness Business Practices Sales Hardware, Network, Power, Building Change Management Security Management Availability Management Performance Management
    18. 18. Moore’s Law for Software $100/user/ Month $10 $1 Traditional SaaS Internet
    19. 19. Mobile Cloud ? Transactions Per Day NYSE 10M VISA 100M Google 200M Mobile ????
    20. 20. Projected U.S. Employment Growth, 2004 - 2014 U.S. Bureau of Labor Statistics. http://www.bls.gov/opub/ooq/2005/winter/art03.pdf
    21. 21. Global Service Economy Ten Nations Total 50% of World Wide Labor A = Agriculture, G = Goods, S = Services 1980-2005 PC Age 2005 United 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 International Labor Organization 53% 66 30 3.4 Spain 30% 26 11 63 Bangladesh 30% 20 10 70 Nigeria 40% 70 25 5 Japan 38% 65 23 12 Russia 20% 53 24 23 Brazil 35% 39 16 45 Indonesia 21% 70 27 3 U.S. 28% 23 17 60 India 191% 35 15 50 China Service Growth S % G % A % Nation
    22. 22. Moore’s Law for “Services”? Service System/Network 1. People 2. Technology 3. Shared Information 4. Organizations connected by value propositions Computational System More transistors, more powerful Requires investment roadmap
    23. 23. Service Research & Innovation Institute <ul><li>Mission: </li></ul><ul><li>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 </li></ul><ul><li>Strategy: </li></ul><ul><li>Build Service SIGs around: </li></ul><ul><li>-- Major Service Industry Verticals </li></ul><ul><li>-- Major Domains/Disciplines </li></ul><ul><li>Align existing Service Research Organizations/SIGs under SRII Umbrella </li></ul><ul><li>SRII Membership Model: </li></ul><ul><ul><li>Industry (large, medium, small), Institutions, Individual professionals </li></ul></ul><ul><li>University Program/Partnership: Research, Curriculum development </li></ul>Almaden Research Center IBM Service Science Research
    24. 24. Service Industry Verticals <ul><li>Heath care </li></ul><ul><li>Financial </li></ul><ul><li>Energy </li></ul><ul><li>Education </li></ul><ul><li>Government </li></ul><ul><li>Telecom </li></ul><ul><li>Transportation </li></ul><ul><li>Retail </li></ul><ul><li>Etc.. </li></ul>Almaden Research Center Almaden Service Science Research © 2007 IBM Corporation
    25. 25. Major Domains/Disciplines <ul><li>Technology (Architecture/Platform, Hardware, Software, Infrastructure) </li></ul><ul><li>Service Business--Process/Tools/Models </li></ul><ul><li>Service Operation management </li></ul><ul><li>Service Management/Leadership </li></ul><ul><li>Service Marketing </li></ul><ul><li>Human Factor Engineering/ Skill sets </li></ul><ul><li>Professional Services (IBM, Accenture,..etc) </li></ul>Almaden Research Center IBM Service Science Research © 2007 IBM Corporation
    26. 26. Special Interest Group (SIG) <ul><li>SIG Name: </li></ul><ul><li>Background: </li></ul><ul><li>SIG Lead/SIG members: </li></ul><ul><li>Define Strategy: “what” & “how” </li></ul><ul><li>Define Roadmap/Deliverables/Goals: </li></ul><ul><ul><li>--- “when” & “measurement metrics” </li></ul></ul><ul><li>Define SIG Communications Process/Tools: </li></ul><ul><ul><li>--Meetings, Web site, Research papers, Conferences </li></ul></ul>Almaden Research Center IBM Service Science Research © 2007 IBM Corporation
    27. 27. Service Organization/SIG Partnership <ul><li>INFORMS Service Science SIG </li></ul><ul><li>AMA Service SIG </li></ul><ul><li>IEEE Service SIG </li></ul><ul><li>ACM Service SIG (proposed) </li></ul><ul><li>SSPA/ TPSA </li></ul><ul><li>ITRI </li></ul><ul><li>CISRO/ICT- Australia </li></ul>Almaden Research Center IBM Service Science Research
    28. 28. Today’s Overarching Realities 21 st Century Drivers of Change The Rising Tide of Globalization Economics, Expertise, Openness Innovation Combining technology with insight to create new value Network Ubiquity More than a billion Internet users and three billion wireless subscribers worldwide <ul><li>Cross-disciplinary programs and degrees </li></ul><ul><li>Fusing technical competency with industry-specific knowledge and business-process expertise </li></ul><ul><li>Success requires open collaboration among academia, government and industry </li></ul>The 21 st Century Demands Uniquely-Skilled People
    29. 29. SRII--- Platform to drive Service Innovation <ul><li>Get Involved! </li></ul>
    30. 30. Open Discussion Visit us in San Jose, CA USA IBM Almaden Research Center Email: [email_address]
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