1 00:00:00,000 --> 00:00:06,660 Hello, everybody. Here we are at RSC 2009, the Rational Software Conference, and I've 2 00:00:06,660 --> 00:00:08,700 got another guest here. Would you like to introduce yourself? 3 00:00:09,320 --> 00:00:14,220 Hello. My name is Neeraj Chandra. I'm the Vice President for Worldwide Strategy at Rational. 4 00:00:14,480 --> 00:00:18,920 And this is, I guess, actually the third time you've been on Redmonk TV, if I can count 5 00:00:18,920 --> 00:00:19,400 correctly. 6 00:00:19,580 --> 00:00:20,800 That's true. That's true. 7 00:00:21,200 --> 00:00:26,520 And so, I mean, getting right into it, I mean, there's plenty of other things we've talked 8 00:00:26,520 --> 00:00:29,980 about, I guess, that people can look through the archives to see. But the, the, the, the 9 00:00:30,000 --> 00:00:33,240 thing that I was interested in talking with you about today, especially since you do 10 00:00:33,240 --> 00:00:40,480 a lot of strategy stuff, as I would put it, is, is what narrowing down the overall IBM idea 11 00:00:40,480 --> 00:00:45,720 of smart planets and things like that. A lot of what Rational is focusing on in that sort 12 00:00:45,720 --> 00:00:50,320 of silo of strategy, if you will, is talking about smart products and things like that. 13 00:00:50,420 --> 00:00:55,600 And I'm curious, like, at this point, like, what, what exactly smart products are? And 14 00:00:55,600 --> 00:00:59,520 I mean, I guess I'm curious to hear the whole story, but, but what, what exactly is a smart 15 00:00:59,520 --> 00:01:02,320 product and how does that fit into, uh, other smartness? 16 00:01:02,320 --> 00:01:09,520 Smart product is, is, is our way of starting a conversation with our customers to bring 17 00:01:09,520 --> 00:01:16,060 into perspective the reality of what's happening in the marketplace, as well as a compelling 18 00:01:16,060 --> 00:01:22,160 need to move now to make the changes which are necessary for their growth and, and survival 19 00:01:22,160 --> 00:01:27,360 and happiness and so on. So in that context, uh, let's take our everyday experience, right? 20 00:01:27,360 --> 00:01:33,700 Uh, most of the products, uh, we, we deal with, we find they are becoming more intelligent, 21 00:01:33,700 --> 00:01:40,480 because smarter, uh, our, uh, cell phone is no more just a phone. You can play music on 22 00:01:40,480 --> 00:01:47,800 it. So what was a product became smarter. Our cars now are completely customizable. They 23 00:01:47,800 --> 00:01:55,600 even talk to us. So what was a vehicle became smarter. So you can see these kind of, uh, smartness 24 00:01:55,600 --> 00:02:02,560 in devices all around us. The interesting aspect of the smart product is in two ways, uh, which 25 00:02:02,560 --> 00:02:08,560 I'd like to just, just elaborate on. One, the smart product is unique because it crosses the 26 00:02:08,560 --> 00:02:15,440 boundary between consumers and the business side. So the products are smarter both on the business 27 00:02:15,440 --> 00:02:22,400 aspect of it as well as we, what we experience on, on, uh, in our day to day life. The, the second 28 00:02:22,400 --> 00:02:32,160 aspect of, of smarter products is that this is the building block of the larger initiative around the 29 00:02:32,160 --> 00:02:40,400 smarter planet. And that's really to, to draw attention to an important fact in today's, uh, environment of 30 00:02:40,400 --> 00:02:48,800 economic downturn. Uh, and that important aspect is that call for leadership in this time when there 31 00:02:48,800 --> 00:02:57,360 is a natural and widespread tendency to hunker down. Look, the reality is this recession, like every 32 00:02:57,360 --> 00:03:05,360 other recession, will come to an end when we don't know, but it will. And therefore, it is necessary for the winners 33 00:03:05,360 --> 00:03:13,280 and the leaders to use this crisis to its maximum opportunity and show leadership and using this, 34 00:03:13,280 --> 00:03:20,080 this crisis to their own advantage to make themselves more efficient, more productive, 35 00:03:20,640 --> 00:03:27,520 and more innovative. And that's all the parameter of the conversation around smarter products. 36 00:03:27,520 --> 00:03:33,600 It seems like starting at the beginning of, of, of, of what you're talking about there is the smart and 37 00:03:33,600 --> 00:03:39,200 smart product is, is about not so much making something a multifunctional device, if you will, 38 00:03:39,200 --> 00:03:43,520 but adding a lot more function to it than just sort of a singular sort of thing. So like with a car, 39 00:03:43,520 --> 00:03:48,560 it doesn't just drive you from point A to point B. It has all this other functionality that might do 40 00:03:48,560 --> 00:03:52,880 something for you or with a phone. It, it doesn't just make a phone call for you. It might have these 41 00:03:52,880 --> 00:03:57,520 other sorts of things going on there. So it's layering in this functionality, if you will. 42 00:03:57,520 --> 00:04:02,320 Absolutely. In fact, that is exactly, you're right. That's exactly where rational comes into play. 43 00:04:03,840 --> 00:04:08,480 In, in any of the smarter products, majority of the smartness, so as to speak, 44 00:04:08,480 --> 00:04:14,000 is delivered through software. Because hardware, as you know, has, it tends towards commoditization. 45 00:04:14,560 --> 00:04:21,200 And major portion of, of the products today, either their value or differentiation is increasingly in 46 00:04:21,200 --> 00:04:27,840 software. So software is what makes the product smarter. And software is what we are all about. 47 00:04:27,840 --> 00:04:32,640 So that's the connection why rational is driving the agenda and the conversation around smarter products. 48 00:04:32,640 --> 00:04:37,920 When I react and, and meet with the various stakeholders, especially the number of customers, 49 00:04:37,920 --> 00:04:43,920 which I do quite extensively, we find that there are three different reactions in terms of the 50 00:04:43,920 --> 00:04:49,360 opportunities, which is brought to bear by today's evolution of, of these smarter products. 51 00:04:50,240 --> 00:04:55,120 One is the transformation of their products themselves. In other words, you know, as I said, 52 00:04:55,120 --> 00:05:02,320 you know, you can take a, a medical device, which may be an imaging device, and now you can connect it 53 00:05:03,200 --> 00:05:12,080 through access over the web to a number of handheld devices. Now the same data and that, that asset is 54 00:05:12,080 --> 00:05:18,160 multiplied in value by an order of magnitude higher because the same information can be accessed by 55 00:05:18,160 --> 00:05:22,800 a number of different people in real time quickly. So you don't have to repeat the same test twice, 56 00:05:22,800 --> 00:05:31,680 right? So for instance, if, if my MRI is in the central database and I am traveling and I, I, I need to go and get 57 00:05:31,680 --> 00:05:38,320 something checked, then instead of doing another test by my doctor, which would be the normal case. So another test, 58 00:05:38,320 --> 00:05:46,320 another cost, another opportunity of getting something wrong. Now with this capability, you can access the same data. 59 00:05:46,960 --> 00:05:54,320 So compression of time to market, increased quality, higher quality of healthcare. What was smart became smart. 60 00:05:54,320 --> 00:05:59,280 These customers that you, you talk with, I mean, what, I'm sure there's a variety of different sort of 61 00:06:00,560 --> 00:06:06,960 reactions and plans and ways they can adapt these ideas that they go through. But, you know, if, if, if you looked at, um, 62 00:06:07,840 --> 00:06:16,400 whatever an unsmart product would be, a simple product, I guess. I, I mean, it seems like there's quite a lot as a business that you have to do to get to the point where you can 63 00:06:16,640 --> 00:06:38,600 add in this extra smartness, this extra functionality. And, and I wonder, I mean, from rational and then IBM in general, I mean, what that process kind of comes like, you know, evolves to be where using your example, you know, you have this sort of standalone MRI device or something. And then you actually get to the point where you can have networked handheld devices. I mean, that's a pretty complicated process to go through. 64 00:06:38,600 --> 00:06:47,640 I mean, that's the second area of business transformation where we add value. One was the smart products becoming smarter. It's not that they were not smart. It's just they become smarter. Right. Right. 65 00:06:48,040 --> 00:06:58,760 The second area, exactly as you, as you picked up is that in order to develop the products, which are smarter, there is a major implication on how you develop those products. 66 00:06:59,000 --> 00:07:05,640 In other words, the process of software and systems delivery today becomes a business issue. 67 00:07:06,280 --> 00:07:27,680 And therefore we have to mature that process as an enterprise wide business process with the same amount of robustness, predictability and an ability to continuously improve in it, which we have with other enterprise wide processes like the ERP, like the customer relationship management, like the supply chain management. 68 00:07:27,680 --> 00:07:37,920 The process of system and software delivery, which tended to be historically quite artistic, you know, people used to think I'm an artist, therefore I do software. 69 00:07:38,380 --> 00:07:52,780 But because of the importance of the smarter products in our lives and its impact in the society in general, it is imperative for our customers to start treating and leveraging that activity as a business process. 70 00:07:52,780 --> 00:07:57,880 So that's the second part of the transformation. And that's where rational, obviously, that's our backyard. 71 00:07:57,880 --> 00:08:01,440 That's exactly what we live, breathe, eat and dream about. 72 00:08:01,440 --> 00:08:18,820 The third area of transformation is the transformation of the entire business model, where people can use the opportunity provided by smarter products integrated in a systems of systems to create new values and create new business arrangements and new business models. 73 00:08:18,820 --> 00:08:30,480 So that business transformation also, IBM is well placed to help our customers take advantage of that business transformation and the tremendous amount of growth and value that can provide. 74 00:08:30,480 --> 00:08:34,420 We were getting into the point where sort of rational is backyard and what you guys dream about and everything. 75 00:08:34,420 --> 00:08:49,160 And it seems like a lot of what the getting to the smarter products, if you will, or smartening up your products is basically treating the software process more of like a tool instead of like you're saying a craft or something like that. 76 00:08:49,240 --> 00:08:49,600 That's right. 77 00:08:49,820 --> 00:09:00,880 And it seems like the other side of that is getting the business side to sort of, I don't know, be a little more friendly or just not friendly to software, but just be more involved in the software process. 78 00:09:00,880 --> 00:09:14,340 I mean, one of the implications of what I said about treating the activity of system and software delivery as a business process is exactly that point, that this is a major and a critical business issue. 79 00:09:14,820 --> 00:09:23,640 If you don't get your effective software and system delivery in place, then your business is either exposed or is missing opportunity. 80 00:09:24,380 --> 00:09:32,220 By the reverse token, if you do get it, then you have tremendous amount of leadership potential and all the growth and the benefits that grow. 81 00:09:32,280 --> 00:09:41,520 That would seem to imply that there's sort of new end users of rational products, if you will, who previously wouldn't really touch the software process at all. 82 00:09:41,580 --> 00:09:46,020 But now they're somehow involved with whatever's going on in that crazy software world. 83 00:09:46,080 --> 00:09:49,800 And they have a lot more intimate like day-to-day or maybe week-to-week relationship. 84 00:09:49,800 --> 00:09:50,980 There are two aspects of it. 85 00:09:50,980 --> 00:10:00,680 One is we extend the value we provide of our solutions across both the development domain and the business domain. 86 00:10:01,060 --> 00:10:02,720 And uniquely, we connect them. 87 00:10:03,020 --> 00:10:03,980 Nobody else does that. 88 00:10:04,320 --> 00:10:05,800 And that's a tremendous amount of power. 89 00:10:06,280 --> 00:10:15,340 That's what we mean by, you know, that's the kind of new capability we'll infuse in our customer's enterprise through the JAS platform. 90 00:10:15,540 --> 00:10:32,260 That really is the compelling promise of JAS, where you have a collaborative platform which enables real-time collaboration in the context of a particular process between different constituencies across different domains, across different geographies, across different timeframes. 91 00:10:32,260 --> 00:10:47,020 It does seem like, when you mentioned, you know, the different constituency, that is sort of the difference that hopefully you would have is it's not tools that are just built for the development organization, but tools that are built for the business side to be able to use as well. 92 00:10:47,200 --> 00:10:47,560 Absolutely. 93 00:10:47,820 --> 00:10:49,780 Not only just tools on the practitioner side. 94 00:10:49,780 --> 00:10:58,320 In fact, let me take that question and answer it in a broader context to illustrate, draw a word picture, if you would, of the different levels of value we provide. 95 00:10:59,060 --> 00:11:02,140 So traditionally, as you know, we provided value at the developer level. 96 00:11:02,260 --> 00:11:04,360 If you're doing development, we were the number one. 97 00:11:05,200 --> 00:11:11,580 On top of that, we provide the second layer of value, if you will, at the management level. 98 00:11:11,580 --> 00:11:30,000 We enable you to manage the entire lifecycle, the application lifecycle, from ideation through test, requirements, design, detailed design, implementation, test, the whole Jing Bang lot, with the underpinning of the capability of configuration and change management. 99 00:11:30,720 --> 00:11:30,760 Right. 100 00:11:30,760 --> 00:11:37,880 So you've got an end-to-end traceable process enacted across the organization. 101 00:11:37,880 --> 00:12:02,800 Then the third value we provide, which is where the business part comes in even more into the spotlight, is the value of optimization, where we provide the analytics and the data we have collected from the development activity through the management and are able to collect them in real time, be able to present them in the dashboard, turning data into real information to the various stakeholders. 102 00:12:03,040 --> 00:12:08,200 That's the optimization, that's the optimization, and you use that information to be able to continuously improve your process. 103 00:12:08,200 --> 00:12:21,200 So you have a wider set of return on your investment consumed by a much larger audience, and therefore you get a higher return on your existing assets. 104 00:12:21,200 --> 00:12:41,740 In sort of making the business side smarter, I guess, to continue that, the usage of smart and smarter there, it seems like there's some new additive processes that the business side has to use to sort of engage with the software development process, or whatever you want to call it. 105 00:12:41,740 --> 00:12:57,980 And I wonder, you know, in looking at some of the stuff that's been talked about at RSC this week, there's like MCIF and sort of best practices and things like that, and a lot of the focus, of course, tends to be, or at least a lot of how I interpret things tends to be on the development side and things like that. 106 00:12:57,980 --> 00:13:05,660 But in the context of this conversation, I mean, is there sort of like a library of best practices for the business managing things? 107 00:13:05,760 --> 00:13:13,520 I mean, what does RATIONAL bring to a business as far as like, okay, so I'm a business guy and I buy into this, I should care more about the software, and so just tell me, what do I do? 108 00:13:13,620 --> 00:13:15,640 Like, how do I figure out what I need to start doing with that? 109 00:13:15,640 --> 00:13:29,760 So RATIONAL traditionally has always provided a set of business practices and processes to make sure that the technology we provide is consumed and adopted by the customers in their own unique environment to provide the benefit they need. 110 00:13:30,360 --> 00:13:40,360 What MCIF, which is Measured Capability Improvement Framework, provides is something unique and very much needed and underlined by the economic crisis today. 111 00:13:40,360 --> 00:14:01,760 And that's what was always needed is a link between the business objectives on one side, you know, the objectives the business wants to achieve, and be able to show that link with the technology investment which is being made, and be able to report on that in real time through the evolution of the implementation of that technology. 112 00:14:01,760 --> 00:14:03,880 What's that mapping that goes on between those two things? 113 00:14:03,880 --> 00:14:14,220 Because this seems like one of the eternal unsolved challenges of, you know, software business, business software development is having, as we used to call it, business IT alignment or whatever. 114 00:14:14,520 --> 00:14:17,640 And so, like, how's it finally been fixed this time? 115 00:14:18,200 --> 00:14:27,060 So what MCIF does is does it in a very simple and effective way, in my view, and from what I've heard from the customers. 116 00:14:27,240 --> 00:14:35,680 It starts with, and the reason I have confidence is this is exactly how we implemented MCIF within Rational as well. 117 00:14:36,100 --> 00:14:40,060 So it starts with saying you outline what your business objectives are, right? 118 00:14:40,140 --> 00:14:47,220 One, two, three, four, whatever they are, to conquer the universe, intergalactic dominance or whatever you have, 119 00:14:47,540 --> 00:14:56,460 or very much more relevant business objectives of market share growth, top line growth, you know, EBS growth and so on and so forth. 120 00:14:56,460 --> 00:14:59,720 And then you translate them into operational objectives, right? 121 00:14:59,800 --> 00:15:01,660 Business objectives lead to operational objectives. 122 00:15:01,720 --> 00:15:12,160 Each of that operational objective is then linked into directly into a set of specific practices to be implemented within the organization. 123 00:15:12,340 --> 00:15:17,220 So you can see a direct linkage, but now getting into granular processes. 124 00:15:17,220 --> 00:15:19,100 Right. It's sort of a decomposition of desire. 125 00:15:19,180 --> 00:15:20,840 Functional decomposition, exactly. 126 00:15:21,160 --> 00:15:25,360 It's a system engineering approach, and therefore it's robust, it's well proven, and it's effective. 127 00:15:25,620 --> 00:15:34,180 And then those best practices then get implemented via specific technology and products in different parts of the organization. 128 00:15:34,180 --> 00:15:39,460 Once you have a baseline of connectivity and what the expectation is, then you go back and say, 129 00:15:39,560 --> 00:15:43,060 okay, now two months have passed, three months or six months, whatever the frequency. 130 00:15:44,160 --> 00:15:46,780 You can do it in batch mode or you can do it in batch mode or you can do real time. 131 00:15:46,780 --> 00:15:49,840 Okay, how are we doing against those objectives? 132 00:15:50,660 --> 00:15:54,780 And you have a dashboard with a heat map which shows you exactly what's going on. 133 00:15:55,040 --> 00:15:55,260 Right, right. 134 00:15:55,260 --> 00:15:56,720 So it gives you real time control. 135 00:15:57,360 --> 00:16:01,960 And that's very useful because the environment is dynamic. 136 00:16:03,160 --> 00:16:07,340 So, you know, the objectives may not remain the same or the practices may have to change. 137 00:16:07,820 --> 00:16:15,360 So MCIF provides you a decision-making framework associated with real-time measurement capability 138 00:16:15,360 --> 00:16:18,980 to be able to respond to the changing dynamics in the market. 139 00:16:18,980 --> 00:16:19,240 Great. 140 00:16:19,340 --> 00:16:22,840 Well, I think that's a pretty nice overview of smartening up, as it were. 141 00:16:23,400 --> 00:16:24,420 Thank you very much.