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IBM on 'Open for E-Business'

Kilroy, IBM Canada's President, gave a keynote address entitled "Open for E-Business on Demand: An Executive Perspective." Kilroy said that Linux has become mainstream and that IBM supports Linux because it brings real value to both IBM and to its customers.

Kilroy thanked customers who have remained with the company for a while, adding jokingly: "Non-IBM customers, we'll get you on the way out."

After years of cutbacks and corporate trimming, companies are back to considering growth. Companies, Kilroy said, have become very good at cutting costs over the past few years, and they are looking to start moving forward again.

Eighty percent of chief executive officers are going into 2004 with growth on their minds, he said. Eighty percent of CEOs are concerned about agility in response times to their customers' needs, and 60% of companies need corporation-wide transformation in the next 2 years, Kilroy said.

With this changed business environment, many companies are looking to revamp themselves and their systems to meet their customers' needs. Kilroy said it is time to push IBM's on-demand business model, which integrally involves Linux.

On-demand, he explained, means a lot of things . A company that is on-demand is a company that can react quickly to rapidly changing circumstances.

Some of Kilroy's key points:

• In order to be a company capable of business on demand, the company needs to have all its processes integrated from one end to the other.
• The company needs to operate as a unit.
• On-demand business is one that can rapidly react to internal and external threats.

IBM Canada president Ed Kilroy gives his keynote speech.

The result -- and the part of it that falls under IBM's definition of on-demand -- was that the risk was neither taken, nor was the conference cancelled. IBM instead moved the entire conference into a two-day long series of Webcasts, eliminating the need for a good deal of human contact.

Companies cannot count on improving indefinitely. Eventually the way they are going will cease to be efficient or competitive. Companies must concentrate not on getting better, but, as he put it, getting different. Those businesses need to be willing and able to evolve, and their processes and infrastructure need to evolve together, in concert, to maintain the best value.

Because Linux is open, Kilroy said, is it a cornerstone of IBM's vision of on-demand business. It enables companies to choose platforms appropriate to the jobs they are intending to do. It is cost effective, and it is secure. Linux, he pointed out, is used in everything from the smallest embedded devices to laptops, to game consoles, and on up to the largest mainframes and supercomputing clusters.

IBM, Kilroy said, contributed $1 billion in value to Linux in the year 2000 and now has 7,000 employees around the world whose jobs are dedicated to it. He told us that Linux is used in mission-critical applications across the entire company.

Kilroy told us that IBM uses, excluding research and development (R&D) servers, more than 2,100 Linux servers across the company. Among the uses he listed for the Linux servers was:

1. An intranet server for the company with 100,000 users, running on a zSeries system
2. Security assessments
3. E-mail and anti-virus scanning
4. Hosting services for clients - what he termed e-hosting - and network management.>
5. IBM's Standard Software Installer (ISSI), a process that builds images for the company's 320,000 employees
6. Microelectronics 300-milimetre wafer manufacturing.

IBM's power technology processor

The 300mm wafer is for IBM's "power technology" processor, he said, and it is used in all sorts of applications, including Microsoft's X-Box game console. The assembly line is fully automated, start to finish, with no human intervention. It is controlled entirely by Linux computers and has been running 25 months without any failures or outages.

He spent the next few minutes briefly outlining some Canadian companies whose Linux migrations had been done using IBM hardware. Among them, he said, Nova Scotia's Chronicle Herald print newspaper adopted Linux in 1997. The whole shop is running, he told us, on IBM blade servers. The newspaper benefits from lower maintenance and licensing costs for their systems.

Mark's Work Wharehouse, a clothing store, needed to update its aging inventory and point-of-sale systems. The old system, he explained, was run independantly at each store, and at the end of the day a mainframe at headquarters would take all the information from all the stores and figure out how much inventory would be needed to be sent to each store based on the sales.

Instead of continuing down that path, their company set up Linux- and Web-based point of sale terminals which maintained real-time information on the head office's computers. This resulted in a 30 percent reduction in total cost of system ownership for the company.

One of the more interesting points Kilroy made during his keynote was near the end, when he told of the U.S. Open Tennis tournament's Web site. It ran on Intel servers and peaked and troughed heavily over the playing season, depending on weather, who was playing, and so forth. To have a server capable of always handling the highest load that could occur, he said, would be uneconomical, because most of the time the server is not used at its highest level.

What they did, instead, was share a computer cluster with a cancer research group. As traffic to their site increased, more processor time was allocated to the Web site hosting and less to the cancer research. As the traffic tapered off, the computers returned to the task of researching cancer.

He emphasized that a switch to Linux can cut a company's costs and allow it to reinvest the savings into its business transformation and IT infrastructure. In essence, he said, an upgrade to Linux can pay for itself.

The moral of his presentation, according to his final slide, was the comment: "Don't fear the penguin."

He also urged those present to take advantage of the information IBM offers free on its website about using Linux.

In the brief Q&A session that followed, a member of the audience asked if IBM's SmartSuite would be released under the GPL. A fellow IBM employee said that IBM would like to do so but that components of SmartSuite are licensed but not owned by IBM, so making it public may take some time.

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