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Steve Hamm in
Intel’s purchase yesterday of security software maker McAfee, detailed in this News.com story, signals a shift in the tech industry’s view of how to better secure computers, networks, and software programs: Security has to be built in, rather than added on later. It’s the concept of “secure by design.”
At IBM, the secure-by-design concept extends to encompass our Smarter Planet agenda. These days, its not enough to secure the traditional computing infrastructure. You’ve got to protect all of the devices and networks that are now being used to monitor, manage, and analyze everything from smart electrical grids to health care systems. “All of the physical assets of the world are becoming digitized, instrumented, interconnected and intelligent,” says Kristin Lovejoy, head of IBM security strategy. “But the sad reality is that as people develop and design these new technologies they’re not thinking enough about the issue of security. These devices are so critical that if they’re unavailable or if they’re tampered with, it could have a significant negative impact on an individual or a large population.”
When security is an afterthought, it tends to be expensive and not that effective. Plus, organizations typically find out about a vulnerability after it has already been exploited by malicious software programs.
We believe that only by designing products to be secure can organizations gain the protection they need at a reasonable price. With that principle in mind, IBM has established what we call a secure engineering framework. It’s a set of specifications that we are beginning to use in all of our design processes, for hardware and software alike.
Now that the world’s critical infrastructure is being wired and networked, security is becoming more important than ever before. Business-as-usual in the tech industry isn’t good enough any more.
Posted by
Steve Hamm in
Source: Wikimedia Commons
In Namibia, they have a completely different understanding of the phenomenon of “mobile banking” than we do in the United States. For the past two years, the First National Bank of Namibia has been dispatching small trucks–really, banks on wheels–to make the rounds of far-flung settlements in the vast Kalahari Desert, in southeastern Africa. The vans are equipped with computers and connected to the bank’s network via a satellite data communications hookup. It’s the old bookmobile idea transplanted to Africa and banking.
This intriguing bit of news comes from Stephen Lloyd van Rhyn, the bank’s head of information technology, who late last year installed an IBM mainframe at the bank’s headquarters. van Rhyn spoke at yesterday’s launch of the zEnterprise mainframe in New York City. Thanks to the reliability of the computer, he said, “we can set up accounts for bushmen in the Kalahari.”
- Source: Wikimedia Commons
Posted by
Steve Hamm in
Credit: Luca Galuzzi Wikimedia Commons
One of the notable messages to come from IBM’s quarterly earnings report today was the strength of demand for technology in developing markets. Revenues in our growth markets represented 20% of overall revenues and they’re growing faster–expanding by 14% compared to 2% for overall revenues.
While the lion’s share of the demand comes from large, fast-growing economies such as China, India, and Brazil, the entire developing world is starting to take advantage of the transformative potential of information technology. Africa, too.
Consider Namibia. Late last year, the First National Bank of Namibia bought and installed an IBM mainframe computer. That may sound like overkill until you realize why the bank went that route and what it plans to do with the big machine.
Namibia is a desert country in southeastern Africa, with a population of just 2 million. Previously, the bank, which is the largest in the country, had its computing done by its parent company in neighboring South Africa. But that caused problems: outages and latency. So the bank decided to buy its own machine to better serve its network of 50 branches and 200 ATMs. “You’re in a developing nation, so your infrastructure isn’t as sound as elsewhere, but you still want to provide superior service to your clients,” says Stephen Lloyd van Rhyn, the bank’s Head of Information Technology. He says the mainframe has done the trick: “It’s super reliable, like the old diesel engines. It just runs and runs. And it’s energy-efficient, too.”
So far, van Rhyn says, the bank is only using about 10% of the capacity of the mainframe, but that’s going to change. He’s gradually moving additional computing applications to the machine, with the goal, potentially, of achieving a bank in a box. At the same time, the parent company, First Rand Ltd., is expanding in neighboring countries. Currently, they have operations in Botswana, Zambia, Lesotho, Swaziland, and Mozambique. They’re considering using the mainframe in Namibia to support the expansion strategy.
What FNB is doing illustrates the potential for bringing advanced computing capabilities to places that have very little now. Some of southern Africa’s economies are perking up, and computing can help sustain and even accelerate that momentum. The goal: A smarter Africa.
Posted by
Steve Hamm in
W. Brian Arthur explains agent-based modeling.
What if legislators could foresee how people might find loopholes in the bills they’re working on–and head it off? That was one of the themes in a fascinating presentation made by the Santa Fe Institute’s W. Brian Arthur at IBM’s Smarter Health Through Modeling and Simulation conference last week in San Jose, Calif.
Arthur, an external professor at the institute, which focuses on the study of complex systems, said that by using agent-based modeling, researchers could have been able to identify some of the unintended consequences of the partial repeal in 1999 of the Glass-Steagall Act, which had prohibited bank holding companies, whose accounts are insured by the federal government, from owning securities businesses. Some economists have blamed the repeal of the act for worsening the effects of the global financial crisis.
The techniques could have headed off some of the problems that arose with Massachusetts’ health care reforms, as well. One of the problems with the the Massachusetts system, he said, is that too many people signed up for health insurance only when they anticipated they would need it in the not-too-distant future, so they took benefits from the system but didn’t contribute their fair share to the insurance pool. Arthur said agent-based models could have spotted this loophole ahead of time and allowed legislators or the insurance industry to put in place rules that could close it.
In this video clip, Arthur explains the magic of agent-based modeling.
Watch VideoI recently moderated a panel at a private event we hosted in London and the biggest takeaway for me: the speakers seemed to have accepted the fact that things can not go back to the way they were. Reform – for better, or for worse – is in the air.
The event was focused on ‘Smarter Banking’ and we had two industry luminaries – Lindsay Tomlinson (former BGI CEO, currently BlackRock Managing Director) and Bill Winters (former co-CEO of JP Morgan Investment Bank) debate the future of the industry. Several themes emerged from this debate:
- The purpose of the industry: The government and the industry have yet to define the industry’s purpose, its raison d’etre – and as a result there are many different opinions on what the new era will look like
- Shrinking industry returns (for now): The expectation is around 10-11% (down from around 25-30%)
- A need for more trust: There is a “crisis of legitimacy” – the industry has historically managed its own interests versus those of its clients – this will be reversed going forward
- Compensation fixation: It will come down, but only to a point – even in the Bible, people griped about how much money lenders were paid
- Role of government: Governments need both strategic vision and purpose otherwise they’ll go too far – it’s not about new rules it’s about new behavior
My biggest question going into the session was which ‘stage of grief’ is the industry currently in. Our research plots the stages that firms in the mature* markets are currently going through:
- Denial (this isn’t happening to me!)
- Anger (why is this happening to me?)
- Bargaining (I promise I’ll be a better person if…)
- Depression (I don’t care anymore)
- Acceptance (I’m ready for whatever comes)
When we asked participants ‘what keeps you awake at night’ 85% stated business model uncertainty. As the industry moves through the stages from denial to acceptance, the industry must solve its business model identity crisis. Although there seems to be a nearly universal nostalgia for the past, 90% of executives agree that both the past – and the returns that come along with it – are over (at least for now until we do it all over again).
While the debate is far from over, we will continue to explore these themes with our clients and partners as we determine what we should research next.
What are your views on the future of the industry – has the industry really accepted the new normal or is it still in denial?
*Note that the most often cited quote from our interviews in the developing economies goes something like this: “I’m not so sure they’re mature. In my opinion we’re all developing economies and we’re all just starting or starting over.”
Editor’s note: In this blog’s focus on building a smarter planet, we put a lot of “ink” about macro industry issues. We also want to help readers understand that beneath all of this is a critical technology infrastructure. To that end, we asked IBM’s Bernie Spang to contribute his perspective on the topic while he is attending the “Smarter Systems for a Smarter Planet” event in IBM’s Almaden Research Labs. Following is his blog post:
There is an increasing sense of urgency we hear from clients who want to get more value from their IT systems. More value in two dimensions – greater value from the information they manage and greater efficiency of the systems themselves.
They have surely obtained value from the investments they’ve made in managing information to execute business processes. But they don’t feel as if they have a consistent view of all their information and enough visibility into the current state and changing conditions of their organization and the markets they serve. They believe that they can better use computing systems to analyze their information to discover hidden insights. Insights that can help them optimize the way their business operates, to optimize the way they interact with their customers and to find new opportunities that they couldn’t see before.
With greater analysis of existing information, they could better serve their citizens or patients, or gain competitive advantage and sell more products and services. This is propelling businesses around the world to not just continue to invest in analytic-based solutions but to increase their investment.
But how does an organization increase such investment at a time when most budgets are at best flat? And when the majority of those budgets go to maintaining existing systems with the capacity needed to support business as usual growth?
That is where the value of greater efficiency comes in. And why IBM is accelerating delivery of systems that are optimized for specific application workloads. Systems that are the right size and balance of finely tuned resources and easily expanded as needs of the business dictate. A new generation of software, servers and storage technology has opened the way for much greater efficiency. Freeing clients to shift investment from maintaining to excelling.
IBM Systems z clients have known for years that running multiple workloads on a single system, each running in its own virtual image, maximizes system utilization and delivers the lowest cost of computing per application user. Innovations such as POWER7 processors, eX5 systems and DB2 pureScale have opened the door to using this “virtual scale-out” approach to dramatically increase the efficiency of Unix and x86-Linux computing environments.
At today’s Smarter Systems for a Smarter Planet event at the Almaden Research Center, IBM client AfriSam and business partner Synopsis shared how they are optimizing IT to improve business results.
AfriSam is the #1 building supply business in South Africa. They play an active role in building the core infrastructure such as airports, roads and harbors. AfriSam’s CIO shared how they recently moved their SAP environment from an Oracle Database running on HP Servers to an optimized IBM Power and DB2 system in one weekend, and have been able to reduce storage space by approximately 35 percent. This has translated into significant cost savings.
Latin American-based business partner Synopsis recently worked with Banco de Credito del Peru to move its banking application, Credipago over to an IBM optimized system in just a matter of days. The banking system is now running IBM DB2 software on Power System that is performing transactions 30 percent more efficiently and had reduced ongoing software costs. The bank is able to shift investment to analyzing information to gain new insights regarding trends in customer services to better serve their clients.
These are just two of the many stories I have heard recently from clients and partners that all echo the same theme. Around the world and in all industries the top priorities are driving down cost though more efficient systems, and accelerating growth by investing in analytic systems to uncover new insights. And that in a nutshell is what we mean by Smarter Systems for a Smarter Planet.
Bernie Spang is the director of product strategy in IBM’s Software Group.
Posted by
George Faulkner in
As you may have noticed from the last post, IBM’s Sam Palmisano visited the Chatham House stage in London today having delivered a speech titled ‘Welcome to the Decade of Smart.’ Throughout tonight (and over the coming days) we will be posting content and links to images and video from the event here, as they become available.
From the post-event materials being distributed:
On January 12, 2010, Samuel J. Palmisano, IBM Chairman of the Board, President and Chief Executive Officers, addressed business and civic leaders at Chatham House in London. In his remarks, he described how forward-thinking leaders in business, government and civil society around the world are capturing the potential of smarter systems to achieve economic growth, near-term efficiency, sustainable development and societal progress.
Links:
Launch a video of the speech: Sam Palmisano at Chatham House
Launch a video of the Q&A from Chatham House: Q&A from Chatham House
Today, Steve Lohr of the New York Times published a brief article about the speech that takes a look at the past year of Smarter Planet work from IBM.
Paul Glader of the Wall Street Journal published an article today as well that examines aspects of IBM’s Smarter Planet initiative.
Posted by
Adam Christensen in
Download the Building a Smarter Financial System Podcast (mp3)
It can’t be a good sign that complex financial topics have begun to dominate dinner-table conversations. But the dire situation in which we find our economies extend far beyond the inner circles of the finance elite.
In this episode of the Building a Smarter Planet podcast series, we focus on the financial services industry and interview Stephen Hsu, professor of physics at the University of Oregon, Jeanne Capachin, an analyst at Financial Insights, Carl Abrams, financial services business manager within IBM Research, and Keith Saxton, global director in IBM’s financial markets industry.
In the podcast, we try and probe our experts to understand more clearly some of the causes of the current financial crisis and get some ideas on how we can build a system smarter than the one we have today.
During the course of the interviews, it became clear to me that there’s consensus on a number of areas:
First, it’s clear that the current regulatory environment isn’t well equipped to appropriately manage risk in an incredibly complex interconnected financial system. This leads to big questions around how to coordinate regulations that extend beyond country borders, as well as what powers, authorities and policies should be in place to avert future calamities.
Second, transparency – everybody’s favorite word – is easier said than done. We need more transparency across many parts of the system – particularly the shadow banking system – but we also need better tools to actually understand the data that is being reported. In fact, the intelligent analysis of data is perhaps the biggest gap in the system today.
Third, while it’s certainly true technology has played a role in increasing the complexity of the system, there’s no getting around the fact that technology will play a huge role in getting us out of it. Technology that helps to make sense of complexity, that detects growing concentrations of unknown risk, and that interprets and analyzes massive piles of unstructured data in real time, holds the key to a smarter system in the future.
And fourth, despite restructuring of regulations, transparency and technology, human behavior also needs to change to make the system smarter. Consumers and shareholders need to understand their financial institutions better before they will begin to have trust in the system. And incentive structures throughout the financial services industry need to be realigned with the long-term benefits of the institutions, and economies in which they operate.
But those are just some of the thoughts of the experts on this podcast. As you look at the system around us, how would you build a smarter financial system?
Posted by
George Faulkner in
“A butterfly flaps its wings in China, and sometime later a thunderstorm drenches Chicago . . .” These words open video below “The Tale of a Smarter Planet.” This is a story that touches upon aspects of so many of our lives as we enter into this era of change. The bottom line? We now have the tools to literally change the way the world works.
The challenges and opportunities ahead of us are far too large, various and inherently global for any government, industry or nation to tackle alone. It will take all of civil society to transform the way the world works. And the good news is, we can. This goes far beyond repairing the old economy. We can now prepare a new one, for the 21st century. Computational power is being put into things we wouldn’t recognize as computers — phones,cameras, cars, appliances, roadways, power lines, clothes. We are interconnecting all of this through the Internet, which has come of age. There is a tremendous mandate today for positive change, and this moment will not last forever. Let’s seize it — not simply to fix a flawed past, but to build a smarter future.
