IBM takes aim at Smarter Commerce

IBM is putting its expertise in data analysis and business process to work under a new initiative called "Smarter Commerce" to help make sense of what consumers want and help vendors to better target offers.

"Smarter Commerce" is a reaction to the shift in the dynamics of commerce as a whole, with the customer leading the path to sales, according to Yuchun Lee, VP of enterprise commerce for IBM. The newly packaged offerings are designed to help businesses engage customers with a higher level of relevancy, putting the customer back to the center of the business with a holistic view of the entire process.

Lee joined IBM via the acquisition of Unica, a marketing analytics firm he founded. Lee told CNET that the Smarter Commerce initiative is a way for companies to buy, sell, and market their products by integrating operations and interacting through community, collaboration, process, and analytics--all within an industry context. This initiative came out of the need to rethink the way that businesses interact with customers.

In a recent interview, Craig Hayman, general manager of Industry Solutions for IBM Software Group, suggested that this shift, including the integration of social media into buying and selling processes "brings profound consequences-redefining the term commerce:"

What used to be seen as a flow of goods from manufacturers through a distribution chain to customers has become an interactive feedback loop, where consumers, producers, distributors, the media, and marketers all have new roles to play.

The software business as a whole continues to grow dramatically for IBM. In a recent investor briefing (PDF), the company predicted that software revenue would reach $17 billion by 2015, up from $9.5 billion in 2010.

The broad-based market approach of Smarter Commerce is something that IBM has honed over the past 10 years or so, which we saw with Linux, SOA, and Smarter Planet; marketing a large vision that is made up of a variety of IBM provided components, including packaged software and solutions, business services, industry-specific best practices, and partner and training programs.

What's a bit different this time (at least in terms of what we publicly know about how IBM software works) is that Smarter Commerce, as a newer initiative, is reaping the benefits of a great deal of other IBM R&D, for example leveraging the open-source Hadoop platform for big data analysis.

This is a multi-year vision and process, Lee said. There were a number of acquired companies and companies that had integrated with IBM software, but the trick was to create a fully integrated suite of software and services and offer them both on-premise and in the cloud.

The bigger trend that is evident in this new initiative is how IBM is applying its strength in data analysis to define markets. This is a theme that I reported on from IBM Software Chief Steve Mills as well as from IBM Entity Analytics chief scientist Jeff Jonas, both of whom mentioned the business necessity of not just finding patterns in data but making it easier for businesses to react to the data.