Supplying the World’s Thirst for Data… Storage
As consumers and enterprises demand more data and subsequently data storage, IBM is in a prime position to be the leader as a solutions provider.
As a long-standing leader in technology, International Business Machines Corporation (IBM) has an extensive legacy as a trusted expert to consumers and enterprises alike. Some important products that IBM has introduced to the world includes: Keypunches, Calculators, Computers, Data Storage Devices, and Point of Sales Machines. The full list is much more extensive; however, the point is that IBM has always been a leader and key component in the advancement of technology.
As you go through your normal day, it’s difficult to go a day without being impacted by something basic, but so important to most aspects of our lives – data.
Data can be defined as, “a set of values of qualitative or quantitative variables.”[1] There is a straightforward way to classify data – data we are aware of and data we are unaware of. An example of data we are aware of can be as simple as the PDF file on our laptop. Data that is more discrete and that we may not be aware of is the log file that is collected by commercial aircraft engine manufactures every second of the day. Cash is always going to be King, but Data is slowly becoming just as important. Just as banks store our money securely, there needs to be a place to store our data securely.
The demand for data storage has been recently growing at a rapid pace from three major trends:
- Consumers utilizing more storage more frequently (larger size files being uploaded and shared more often)
- Enterprises investing in big data projects to capture value
- The start of the Internet of Things (IoT) era (connected machines and devices)
With the projected growth in demand for data storage that outpaces the rate of supply[2], there is a huge opportunity for a technological leader like IBM to capitalize on its well-trusted position. With many projections, there is always the risk of initial assumption turning out to be incorrect. With the IoT era just beginning, there is a strong risk of the demand projections be understated.
The implications of the IoT growth are immense, and there will be strains on many other things besides the data storage such as internet connectivity speeds and data security. [3] However, this isn’t slowing down the clear increase in the number of devices in both the consumer and enterprise space.
Ultimately, there is a clear need for data storage management, both solutions and hardware. IBM is uniquely positioned to capitalize on this megatrend (digitization).
IBM is known for its expertise in this field, but has been competing with other firms to be the provider of hardware required to satisfy the need storage. A few data storage firms include Western Digital, Micron Technology, Seagate Technology. These firms supply components that are required for our ever-important devices to perform – computers, phones, televisions, powerplants, manufacturing plants to name a few. As you can see, the breadth of the impacts of this increase in data storage requirements is very wide.
An opportunity exists for IBM to become premier provider of solutions and hardware for this new data hungry world. Currently, IBM advises many large enterprises on their shift to utilizing big data as a value creator in their respective businesses. For example, United Technologies Corporation’s Aircraft Engine Division, Pratt and Whitney (PW), is taking advantage of big data to predict aircraft engine maintenance for its customers all around the world. This new project not only serves PW’s financial and operational goals, but also helps their customers’ aircraft fleet stay in the air longer.[4]
With these big data projects that provide immense value to their customers that also grows IBM’s reputation for data expertise, I would recommend that IBM aggressively sell their advisory services to capitalize on established relationships in the future as the expansion of IoT devices and, subsequently, increase in data storage takes place. Another recommendation would be to acquire and data storage manufacturer. This action would complement the strength that IBM has in its data solutions service.
As I researched this topic two questions continued to spark my curiosity:
- Is there an opportunity to clean-up (purge or delete) our current data storage to support the rapid growth in demand?
- Is there an opportunity to retrain and develop America to be a strong data storage manufacturing country?
(710 words)
1. Data: https://en.wikipedia.org/wiki/Data
2. Digital Data Storage is Undergoing Mind-Boggling Growth: https://www.eetimes.com/author.asp?section_id=36&doc_id=1330462
3. Internet of Things Infographic: https://www.sas.com/en_us/insights/big-data/internet-of-things.html#m=the-internet-of-things-infographic
4. Pratt & Whitney’s ‘Big Data’ Projects Advancing Analytics Efforts in Aftermarket: http://www.utc.com/News/PW/Pages/Pratt-Whitneys-Big-Data-Projects-Advancing-Analytics-Efforts-in-Aftermarket.aspx
It’s interesting to learn about the hardware side and how IBM is pursuing opportunities. There are also large opportunities for service providers in data. Many traditional companies struggle with the new demands of managing and using data. One example is electric utilities. These companies haven’t had large data analytics functions and must now cope with 1.6 billion data points per day from 65 million smart electricity meters in the US [1].
The first major opportunity was in providing data storage services. Amazon, Microsoft and Google are the top three in this space. But this is a very competitive and increasingly commoditized industry and margins are very slim. Now, a lot of the value is in developing analytics tools to unlock value in company data on the cloud – many companies are looking at the potential for artificial intelligence and machine learning to optimize data analysis. Change will likely be driven by third-party data services providers and not by companies in traditional industries.
[1] US Energy Information Administration https://www.eia.gov/tools/faqs/faq.php?id=108&t=3, accessed November 2017
I find it interesting to see how IBM has the opportunity to capitalize on its existing position to further establish itself as a specialist in large data storage. I think that you are right in advising IBM to aggressively sell their advisory services on data management and they should develop an complete solution package of hardware, software and maintenance services. I believe that industrial companies that are expanding into IOT will not find cloud data storage solutions attractive, due to the volume of data they will be producing as well as the risks of being hacked. I think thus that IBM can position itself as a trusted partner, bringing a global, integrated solution.
I completely agree that data will become an increasingly important part of the corporate ecosystem as technology continues to progress. As another commentator already mentioned, I believe that the advancement of artificial intelligence / machine learning software will be a primary driver of this acceleration. What I am curious to learn more about is:
1) what options currently exist for enterprise data storage (ie. data centers, cloud, etc)
2) what are the current primary drivers influencing how corporations choose between those options today (ie. price, access, value-add services, etc)
3) why IBM is particularly well suited versus competitors to meet the data storage needs of the future
Another interesting variable in this equation is the role that blockchain technology could play. For example, a number of companies have already begun emerging whose business model is paying individuals for their computing power while they are not using their computers – if this solution becomes technologically viable on a large scale, I am curious how that would impact the supply / demand economics of IBM’s data storage business.
Peter,
Fascinating article. While I would agree that on the surface, the current outlook on data storage supply vs. demand implies that there will be a large opportunity for a hardware storage, this projected gap could shrink dramatically with innovations in data compression.
For example, researchers in the area of clinical genomics have struggled with the high costs of data storage, because the large size of human genome sequence files. Further complicating matters, the privacy of this data is a significant concern. To combat this issue, researchers developed a new method of encrypted data compression known as SECRAM that, at the time of its development last year, improved upon the existing primary compression method by over 30%.
[1] Huang, Z., Ayday, E., Lin, H., Aiyar, R. S., Molyneaux, A., Xu, Z., … Hubaux, J.-P. (2016). A privacy-preserving solution for compressed storage and selective retrieval of genomic data. Genome Research, 26(12), 1687–1696. http://doi.org/10.1101/gr.206870.116