Three weeks ago, IBM played host to the world's IT analysts at its plush conference center in Palisades, New York. While Big Blue's event had the usual impressive trappings, the real purpose of the meeting was to give analysts an inside look into what IBM is doing to transform its On Demand strategy from marketing statements into real-world IT solutions.

Before I explain what I learned from the two-day event, let me tell you something about the On Demand strategy that much of the IT community does not understand. On Demand is not so much an IT strategy as an IBM statement about what it sees as the next evolution of business. You've probably understood this intuitively if you've watched any of IBM's On Demand commercials lately. Remember the business executive who keeps dreaming that he's being chased by angry customers wearing masks? Those customers weren't chasing him because his company hadn't upgraded to the latest version of WebSphere Application Server (WAS). They were chasing him because he wasn't meeting their demands.

IBM's Vision in Its Own Words

As IBM sees it, those demands can be summed up in four adjectives that embody the On Demand qualities that customers want from their businesses:

• Responsive--Able to provide customers with exactly what they want as rapidly as they need it
• Resilient--Able to quickly and gracefully deal with unforeseen problems, threats, and failures
• Focused--Ready to outsource any function that is not central to core competencies, including whole business processes
• Variable--Having a cost structure that can quickly contract or expand in response to sudden changes in business volume

The problem as IBM sees it is that most IT infrastructures inhibit companies from being On Demand enterprises. Their lack of integration inhibits corporate responsiveness. Their complicated and failure-prone management systems make them far from resilient. They are difficult to outsource in part or in whole because they are monolithic rather than modular and proprietary rather than open. Finally, most IT infrastructures impose heavy fixed costs that cannot change in response to rising or falling transaction volumes.

To fix this problem, IBM intends to orchestrate its products and technologies into an "on demand operating environment" (it is IBM's idea to make this lowercase, not mine) that enables businesses to embody the four On Demand qualities. This operating environment will have four characteristics that make such enablement possible.

• Openness--The on demand computing environment will utilize a modular architecture based on open standards, allowing companies to migrate or outsource elements of their IT infrastructure to whatever platforms make the most technical and financial sense.

• Integration--It will seamlessly integrate people, business processes, and information to accelerate responsiveness.

• Automation--It will use autonomic, policy-based management systems to create IT infrastructures that are consistently responsive with little or no human intervention.

• Virtualization--It will transcend the physical boundaries of servers, storage, and networks, allowing companies to instantly acquire or divest themselves of IT capacity and only pay for what they need.

Over two days of non-stop presentations to analysts, IBM explained how it will realign and optimize its products so that they embody these characteristics. While IBM wants all of its products to be open, it sees some products as promoting one of the other three qualities more than others. When it comes to integration, for instance, Lotus solutions excel at integrating people while WebSphere majors in business processes. On the automation front, Tivoli's tools step to the fore. As for virtualization, think of technologies such as the iSeries' new On/Off Capacity on Demand feature, storage area networks, and grid computing.

IBM's end game for its on demand computing environment is, put simply, the transformation of IT infrastructures into highly efficient computing utilities. This does not mean that IBM will encourage everyone to outsource all their IT capacity to utilities. It does mean that IBM wants your IT infrastructure--whether it runs in-house, offsite, or in both places--to be as flexible and virtualized as today's electrical power grids. To put it another way, IBM wants your IT systems to be capable of grabbing extra capacity from a standby processor in your iSeries, a UNIX server at your software provider, or a mainframe inside IBM. Moreover, IBM wants you to not really care where the capacity came from as long as it was the cheapest capacity you could get.

To transform its customers' IT infrastructures into computing utilities, IBM is launching several ambitious projects to integrate its software and hardware platforms using open-computing standards. I don't have space to discuss these projects right now, but I will discuss them in future issues. In addition, the computer giant is developing what it calls "Get Ready" and "Get Started" offerings. These offerings will be packages of IBM products and services designed to transform IT infrastructures. The "Get Ready" offerings will include assessment services that identify where your IT infrastructure needs improvement in the integration, automation, or virtualization areas. The "Get Started" offerings will deploy the improvements using the necessary IBM solutions. Both sets of offerings will be delivered via IBM Global Services and IBM Business Partners.

IBM's Vision--My Take

As I sat through IBM's analyst briefing, I was struck by the enormous effort that went into developing a strategy that realigns virtually all of an $80 billion dollar company's products under a single set of clear and relatively simple concepts. No matter what else it does, On Demand makes it clear to us analysts, not to mention the press and customers, that IBM has a coherent vision that it is following.

As I think about that vision, however, I wonder whether it is one that will seize the imaginations of mid-size companies--and particularly iSeries customers--to the same degree as larger enterprises. On Demand is a solid business vision, but IBM's articulation of that vision often has an ivory tower, MBA-speak tone to it that mid-market managers tend to view with suspicion. If IBM wants to sell its vision to the mid-market, I suspect it will have to translate On Demand into more down and dirty operational terms. Sure, mid-size companies want to be resilient and have variable cost structures, but only if IBM can reduce those qualities to measurable improvements, show them how it will make those improvements, tell them what the improvements will cost, and prove they'll recoup those costs in six months or less. That tall order will take time for IBM to fill.

Another obstacle IBM could face is its delivery mechanisms for On Demand offerings. Since IBM's route to most mid-size companies goes through a Business Partner, IBM has to get thousands of its channels to understand and support On Demand, then receive training in On Demand offerings. While that will take time, what could take even more time is getting Partners to adjust their own solution delivery and pricing structures so that they support On Demand.

To understand how difficult this task could be, let's just consider one On Demand enabler...the iSeries' On/Off Capacity on Demand feature. Currently, there is no mechanism in this feature that notifies anyone (except IBM) when a customer turns on a processor. Without such a mechanism, software vendors cannot know usage levels for their products, much less determine an appropriate charge for that usage. Until IBM solves this and a host of similar problems, On Demand is just as likely to cause confusion and concern among its Partners as enthusiasm and endorsement.

As you can see, IBM's On Demand vision is just that...a vision. It will take years to turn it into a reality, and there will be many issues to address along the way. Still, much of the vision will likely become reality for two reasons. First, it does address genuine business problems. Second, it is a vision that IBM's competitors are also espousing. Just look at Hewlett-Packard's Adaptive Enterprise or Sun's N1 strategies and, you'll see more similarities to On Demand than differences. These and other vendors are driving IT infrastructures toward utility-like models, and their combined influence will likely take the rest of the market with them.

In short, On Demand is a journey that will involve not only IBM, but thousands of customers and Business Partners, making millions of changes in the way they do business. And despite the fact that On Demand makes sense, those decisions won't be made on demand. They'll be made slowly, incrementally, and with plenty of politics and horse-trading. It will be fun to watch, but it won't be nearly as clean or pretty as the charts IBM showed me in New York.

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With a light heart and no regrets, I want you all to know that when you open up next week's issue of this magazine, you will not find an article from me. That's because my wife and I are headed off on a glorious vacation to...hold it, why tell you when I could make a game of this? Tell you what...in my absence, I'll let you puzzle over the following clues to find out where in the world we've landed. Here are four clues.

1. The small and mid-sized businesses in the country we're traveling to have a long history of buying S/3X, AS/400, and iSeries servers.

2. For part of our trip, we'll be staying by a lake that made a cameo appearance in a Star Wars movie.

3. We'll also be traveling through the only province in this country that is both land-locked and shares no border with another country.

4. Last but not least, we'll take some road trips through a province that is famous for its tufa rock formations and edible delicacies such as sheep cheese.

So here's the deal. Guess the country in which we're vacationing, plus name the lake and the two provinces in my questions. If you get them all correct, you will achieve everlasting glory and honor among your peers.... OK, you'll get your name published in my next article, which will appear three weeks from now. Entries from employees of MC Press and any of its contractors, cronies, and lackeys will not be considered. See you in June!

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at This email address is being protected from spambots. You need JavaScript enabled to view it..