IBM banks on analytics, cloud for growth

IBM has been making acquisitions and other investments to build its analytics and cloud computing business.

IBM Corp.’s focus during the past year has been on its business analytics practice. And the next year is expected to be more of the same as the company makes acquisitions and opens analytics centers.

The company, based in Armonk, N.Y., is also focusing its expertise on cloud computing, which the Obama administration has made an important technology initiative by urging agencies to launch pilot projects to test the software-as-a-service technology. Cybersecurity is another market Big Blue is targeting.

IBM's focus on adapting to changing customer needs helped land the company at the No. 17 spot on this year’s Top 100 list. The company posted $1.8 billion in federal prime information technology contracts.

IBM established a Business Analytics and Optimization Service for government in early 2009. The technology has the potential to help agencies deploy smarter systems that can analyze data and enable faster, more accurate decision-making. The company opened its first U.S. analytics solutions center in New York in October 2009.

“The ability to help agencies leverage advanced analytics will be an important driver,” said Todd Ramsey, general manager of IBM’s U.S. federal division. “These smarter systems require advanced analytics to turn data into predictive intelligence, which enable these new digital infrastructures to improve the speed and quality of decision-making.”

The company put its analytics expertise to use when it won a $20 million contract from the Special Operations Command in October 2009. IBM will use analytics and reporting capabilities to speed access to information and improve the command’s business enterprise.

In summer 2009, IBM further built its analytics practice with the acquisition of Chicago-based SPSS Inc. IBM said the $1.2 billion merger will enable various new industry-focused solutions, including crime prevention for the public sector.

Cloud computing — which takes IT resources, such as services, applications, storage devices and servers, and makes them available via the Internet — is another area of focus for the company. The Air Force hired IBM earlier this year to design and demonstrate a secure cloud computing infrastructure that could support defense and intelligence networks. The 10-month project will introduce cybersecurity and analytics technologies into the cloud architecture.

The cloud computing industry is expected to become competitive as services integrators figure out their niches, said Shawn McCarthy, a research director at IDC Government Insights.

“There’s a big interest in cloud computing and what it is going to do for my company and how can I be competitive and make money," McCarthy said. “The large services integrators are in a situation where, from a pure price standpoint, it will be difficult to be competitive.”

The Federal Aviation Administration is working with IBM on a prototype system for cybersecurity. It will be able to correlate historical information on traffic patterns with dynamic data from monitors, sensors and other devices that capture information about network traffic and user activity in real time.

“Through this collaboration with the FAA, as well as others under way in government and the private sector, we hope to develop comprehensive solutions for protecting the digital and physical infrastructures of critical national networks and enterprise systems,” Ramsey said.

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