This week, the talk will be about Cisco boldly entering the blade server market and the end of co-opetition as we know it:
“Cisco’s chief technology officer, Padmasree Warrior, says the company has moved boldly in the past, and suggests the old rules are changing. “We’re going to compete with H-P. I don’t want to sugarcoat that,” she says. “There is bound to be change in the landscape of who you compete with and who you partner with.”
Battles are breaking out across the industry. Within the past year or so, H-P has fueled a new rivalry with IBM in tech outsourcing by buying services giant Electronic Data Systems Inc. Microsoft set its sights on Internet-search giant Google Inc. by attempting to buy Yahoo Inc. Sun Microsystems Inc. is moving beyond its core market in servers and software to take on database-software leader Oracle Corp. Later this month, Dell Inc. says it plans to introduce new data-center management software that will compete with existing offerings by H-P, IBM and others.”
Of course, that is interesting and important news. And I completely get the drivers of wanting to win in the data center and the convergence of data center technology – compute, networking and storage.
However, I find myself interested in what I’d categorize as ‘recessionary moves of giants with cash, guts and (relatively) decent stock prices’. Namely, recent adjacent market moves by Walmart and IBM.
On March 12, the WSJ reported that Walmart will start selling electronic medical records software, installation and maintenance, to single physicians and medical practices via Sam’s Club:
“Wal-Mart said it is forming a partnership with computer maker Dell Inc. and closely held software maker eClinicalWorks to offer a lower-priced medical records system, plus installation and maintenance, through its Sam’s Club membership warehouses. Sam’s Club would be the one-stop contact for any physician follow-up questions about the system. The questions would then be routed to the appropriate person at Dell or eClinicalWorks.
“Whether it is a single physician or a physician’s group who comes to us, we can offer a system that enables them to electronically prescribe medication, set appointments, track billings and keep records,” said Gregg Rossiter, a spokesman for Wal-Mart.
The system, expected to be available at the clubs in the spring, will cost $25,000 for the first installed system, and $10,000 for each additional system, plus $4,000 to $5,000 a year in maintenance costs.
The more complex systems cost about $40,000 for the first installation in a small physician group, said Kent Gale, founder of Klas Enterprises LLC, a research company for health-care technology.”
As I shared via Twitter, this is an installed offering, not a cloud offering, like the patient oriented Google Health. That tweet led into an interesting discussion on compliance in the cloud, which is exactly why companies such as Sonoa Systems exist. But, I digress.
In what’s nothing more than conjecture, I’d speculate that Walmart’s investment in EMR software is related to its in-store health clinic initiative. If so, it’s a good way to capitalize on an internal investment — something more organizations should consider. If not, then it’s possibly a harbinger of software offerings to come.
On March 13, the WSJ (amongst others) reported that IBM is “embarking on a new business venture in which it will help manage water resources, an attempt by the technology giant to further expand its footprint outside traditional computer services.”
“The new business…will design and install systems of sensors and back-end software to monitor water pipes, reservoirs, rivers and harbors, according to Sharon Nunes, who heads the Big Green venture.
IBM has been touting its ability to help create a “smarter planet” by designing systems to monitor physical world activities such as electricity flows and traffic patterns. “There’s a lot of stress on water systems around the world. With a limited supply, you’d better be able to manage it,” said Ms. Nunes. She estimates that information technology for water management could become a $20 billion market.”
Sure, you could say that IBM selling IT for water management is business as usual, but the truly interesting part of this announcement is the research development:
“In a related development, IBM researchers said they have created a new desalination-membrane technology that goes beyond current systems and removes arsenic and boron salts from contaminated ground water, making it safe for humans. Desalination membranes filter out salts, allowing clean water to pass through.
Robert Allen, a chemist at IBM’s Almaden, Calif., lab said that his team found a way to put a polymer designed for immersive lithography — a technique for making semiconductors — into membranes that reject the toxic salts. He said arsenic contamination is a problem in some water supplies in Texas, Turkey, Bangladesh and China. IBM expects to license the technology rather than make desalination plants itself.”
For a quick overview of the breakthrough, check out this youtube video.
This move comes days after CEO Samuel J. Palmisano addressed, in the chairman’s letter of IBM’s 2008 annual report (pdf), the economic climate:
“We’re not looking back, we’re looking ahead. We’re continuing to invest in R&D, in strategic acquisitions, in growth initiatives—and most importantly, during these difficult times, in our people.
In other words, we will not simply ride out the storm. Rather, we will take a long-term view, and go on offense. Throughout our history, during periods of disruption and global change, this is what IBM has done. Again and again, we have played a leadership role. We have imagined what the world might be, and actually built it.
We find ourselves at such a moment now. This is an inflection point—both in the course of modern technology and economic history, and in the nearly 100-year journey of IBM. As someone who has been here for more than a third of that journey, I can tell you that it presents the best opportunity I have seen in my IBM career to align those two trajectories in very powerful ways.”
What else does this “inflection point” have in store for us? Who will our primary IT providers be? And will IT be their primary business? Curse or not, we d
o live in interesting times…
Illustration: Since the market collapse, Walmart & IBM have consistently outperformed the Dow.
[Click on Chart to enlarge]
[Disclosure: None of the companies mentioned in this post are direct clients of my company, Elemental Links. However, Cisco, IBM, HP & Sun are sponsors of the SOA Consortium, which is a client of Elemental Links.]