The computing giant IBM is reinventing itself as the world’s environmental and ecological saviour with its “smarter planet” initiative – and the Middle East is a major focus for the new strategy. Dismissed by many industry watchers as an IT dinosaur that has been overtaken first by Microsoft and then by newer rivals such as Apple and Google, IBM is now using its tremendous supercomputing power and systems management skills to solve problems such as the desalination of water and predicting sandstorms. It is also addressing local government issues and transportation, along with the interconnection of city services. A key element in IBM’s drive to help to build a smarter world is its smarter cities initiative, aimed at more effective management of urban resources, and which is already being introduced in Dubai. According to Dr Colin Harrison, IBM’s director for strategic innovation, much of the inspiration for the initiative came from Masdar City, the sustainable energy-efficient development on the outskirts of Abu Dhabi. “We were talking to the leaders of Masdar as early as 2007, when they visited our labs in Zurich,” said Dr Harrison. He thinks this vision helped to develop IBM’s new approach towards making its business-oriented software relevant to urban planning and development. “What we have developed is essentially enterprise resource planning for cities to enable them to function more effectively,” said Dr Harrison. “Too often people can be working along similar lines in a city within a kilometre of one another and be totally unaware of each other’s existence, which is somewhere we can help. “We are already helping Dubai become a smarter city and have ambitions to do the same for Abu Dhabi.” Technologies being developed by IBM across the Middle East include the use of massive data-crunching systems to predict weather conditions. “One problem we are considering is the effects of sandstorms and trying to predict, for example, the likely impact of a sandstorm hitting Dubai airport or the Sheikh Zayed Road,” said Dr Harrison. Last Sunday IBM held its annual company information officer conference for the MENA region in Dubai to explain the relevance of its initiative.
Despite having many of its roots in the Middle East, IBM considers its initiative a global strategy, also embracing urban environments in the US, Europe and beyond. The company thinks that while more than 50 per cent of the world’s population now lives in urban areas, almost 70 per cent of the world’s population will live in cities by 2050, many of them in cities of more than 10 million people.
IBM is betting the farm on making the shift from IT software company to a new role in building a smarter planet. According to some estimates, it has already spent about US$50 billion (Dh183.65bn) on making company acquisitions and on the research and development needed to implement its strategy.
“The new saving-the-planet strategy is a very promising one for IBM, as every person in the world is affected by environmental issues. Big corporations and national governments represent a massive global client base,” said Alan Rodger, an analyst at the research company Ovum.
“IBM seems to have made its move in this area well ahead of other companies. Higher-profile tech companies such as Apple, which has a consumer-facing strategy, are not going to change the way in which the big corporations run their global operations.”
For several years, IBM has been beefing up its business-level consultancy base to prepare for the implementation of its ambitious new global strategy.
“When IBM sold its PC and laptop manufacturing division to Lenovo about five years ago, the industry was astounded but it proved to be the correct strategy,” said Mr Rodger.
“Similarly, IBM was ahead of the pack when it bought PricewaterhouseCoopers consulting almost a decade ago. The acquisition brought IBM 30,000 business-level consultants … IBM is now the largest business services organisation, with 180,000 business and technical-level consultants around the globe.”
The timeliness of IBM’s new strategy is evidenced by a rush to emulate it by some of its rivals.
“Other IT companies have since followed in IBM’s footsteps and acquired consultancy firms of their own,” said Mr Rodger. “Hewlett-Packard has taken over Electronic Data Systems, for example, and Dell has acquired Perot Systems.”
Many of the smarter planet technologies being developed by IBM have particular relevance to the Middle East. For example, last spring IBM and the King Abdulaziz City for Science and Technology, Saudi Arabia’s national research and development organisation, unveiled a research collaboration aimed at creating a water desalination plant powered by solar electricity, which could significantly reduce water and energy costs.
The technology at the core of the scheme is a new nanomembrane, based on the microtechnology used to develop computer chips that can provide low-cost desalination. IBM is also involved in a range of sectors such as health care, education, transport and government.
“IBM has made a massive investment in building a vertical sector strategy where it can consult on all areas including transport, defence, government and manufacturing. This offers a number of routes for IBM to have boardroom conversations on world issues,” said Mr Rodger.
Analysts are also impressed by the innovative ways IBM is marketing its strategy to businesses and consumers through a new free computer game, City One, aimed at educating governments, business and consumers about the initiative.
“It’s a powerful tool for a business-to-business company like IBM to market its products and services in a way that engages the customer,” said Tom Grant, an analyst at the research company Forrester.