IBM and the Smarter Planet

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By: Dr Fern Halper, Partner, Hurwitz & Associates
Published: 23rd November 2008
Copyright Hurwitz & Associates © 2008

I was at the IBM software analyst meeting this past week and got the opportunity to hear about IBM's impressive new initiative called Smarter Planet. This is big, bold stuff; perhaps even bigger than the company's eBusiness initiative. The idea behind the effort is to use technology to make the world smarter.

What does this mean? On November 6, 2008, IBM CEO Sam Palmisano spoke to the Council of Foreign Nations in NYC about Smarter Planet. He described how the world is becoming more instrumented, interconnected and intelligent. He cited projections that by 2010, there will be 30 billion RFID tags and 1 billion transistors per person. These devices help to make our world interconnected. These devices can also communicate with each other and the information from them analyzed for better outcomes.

In short, if done properly, all of this instrumentation, interconnectedness, and intelligence can be used to help make the world a better place. IBM has collected a series of mind-boggeling statistics about the amount of waste that happens in the world. For example, $11.5 b/yr in food is wasted in India, post harvest. The consumer and retail products industry waste $40 b/year in the supply chain, countries around the world lose anywhere from 40–60 percent of their energy because of outdated energy grids.

IBM's vision is to make the world work better. At the analyst meeting, Sandy Carter and John Kennedy described how IBM is mobilizing for a smarter planet. They outlined three major elements from the IBM software side:

Dynamic Enterprise. This part of the equation is about creating a dynamic, agile business model. It includes a dynamic infrastructure, connected customers, and dynamic business process
New Intelligence. With an instrumented data explosion, powerful software will be needed to manage this information, analyze it, and act on it.
Green and Beyond. Finally companies are beginning to take green seriously. Countries like Japan are imposing penalties for companies that exceed their allotted carbon footprint. Technology can help reduce the carbon footprint and it can also help monitor that footprint.

In keeping with IBM's new industry vertical strategy, Smarter Planet solutions will be algined with various industries. Here are just two examples of Smarter Planet at work:

Smart Utilities. IBM is helping to make energy grids smarter. These grids use sensors, meters, digital controls and analytic tools to automate, monitor and control the two-way flow of energy across operations. This means that power companies can optimize their performance better and allow individual consumers to manage their energy consumption smarter, even down to the applicance level (if the appliance is part of the network)
Smart Transport. RFID is being used to track poultry and meat from the farm to the supermarket. This means, for example, that factors such as temperature and humidity can be monitored while the meat and poultry is in route, so if the temperature becomes too hot, someone is notified. This can dramatically cut down on waste.

Clearly, the impact of this can be enormous.

At the event, I got excited about the Smarter Planet iniatitve. With all the bleak and dismal news out there today, it was refreshing to hear something positive. Frankly, it was hopeful. Here's what Sam Palmisano said toward the end of his speech that I found quite insightful:

"That's why a period of discontinuity is, for those with courage and vision, a period of opportunity. Over the next couple of years, there will be winners, and there will be losers. And though it may not be easy to see now, I believe we will see new leaders emerge who win not by surviving the storm, but by changing the game."

There is a big opportunity here. Sure, companies are hunkering down now. The reality, though, is that the organizations that bury their heads in the sand will not be well positioned once we come out of this crisis. Plus, it makes sense to work for a better world.

Reader Comments

Do you agree with what Dr Fern Halper, Partner, Hurwitz & Associates is saying? Perhaps you feel, or even know, different? Why not post your opinion on this issue?

24th November 2008: 'M.J. Martin' said:

Sam Palmisano has the right perspective in two regards.

First, we need to fight our way out of this recessionary time and seek new opportunities to grow, mature, and advance our businesses and industries. Many of these new opportunities will result directly from the recession. Therefore, the recession is in fact the catalyst for these changes.

Second, connectedness is already happening, but in a very limited way. Sam sees this trend and wants to accelerate it to drive the clear benefits resulting from it. This makes immense sense. It is not just a matter of harvesting data, nor will new information satisfy the quest. We now need knowledge and wisdom derived from the data. This can only be achieved by making sense of the data and putting it into a real-time context. Once this goal is achieved, we can move from a reactionary mode to a predictive mode, which is where the real amplified power of Sam's vision lies.

Reply to M.J. Martin?