Constellation Insights

IBM tackles the hybrid cloud question anew with Cloud Private: While the concept of private clouds is nothing new, IBM has come up with a new take on it in the form of Cloud Private, a Kubernetes-based container orchestration platform that's compatible with both Docker containers and Cloud Foundry. Big Blue says the stack can help customers move on-premises workloads to any public cloud they choose, when they desire.

In addition, IBM has rolled out "container-optimized" versions of WebSphere Liberty, DB2 and MQ that can work in concert with Cloud Private. So what are the use cases? Here are a couple of scenarios IBM proposed for Cloud Private:

An airline, for example, could use IBM Cloud Private to bring a core application that tracks frequent flyer miles into a private cloud environment and connect it to a new mobile app in the public cloud. A financial services firm could use it to keep customer data in-house as it works to meet its security and regulatory requirements while taking advantage of new analytic tools and machine learning in the public cloud to quickly identify investment trends and opportunities.

IBM's release cites Ilmarinen, a Finnish company that oversees pensions for about 900,000 Finns, as an early adopter of Cloud private. The release also indicates that Hertz Corporation is kicking the tires.


Cloud Private includes management tooling, security and data encryption, database integrations and devops tools to go along with the core cloud platform; additional fees may apply. It is supported on IBM Power Systems, System Z mainframes and IBM Hyperconverged systems, along with servers from Cisco, Dell EMC, NetApp, Lenovo and Intel.

POV: IBM is far from the first big cloud vendor to embrace Kubernetes, but the rollout of Cloud Private is nonetheless a welcome one for enterprises.

"Enterprises want to avoid lock-in and prefer load portability," says Constellation VP and principal analyst Holger Mueller. "Kubernetes does the trick here and being able to transfer Kubernetes loads across public and private clouds gives that portability. It's always good to see more choices for enterprises on how to operate their next-gen apps."

Google's AI startup incubator kicks off with healthcare focus: Earlier this year, Google announced plans for Launchpad Studio, a six-month program for startups focused on applying machine learning to a variety of business and social problems. Now the first four members of Launchpad have been revealed, and all of them are focused on some aspect of healthcare. They include:

  • Augmedix, which is developing a system for increasing doctors' productivity while lowering burnout.
  • BrainQ, a company focused on helping patients regain motion in paralyzed limbs.
  • Byteflies, which is centered on speeding up clinical trials.
  • Cytovale, which is developing a set of biomarkers that can detect sepsis—the presence of dangerous bacteria—earlier on.

Google describes each startup's pursuits in greater detail in this blog post.

POV: The startups will get help from Google engineers, as well as training and credits for Google Cloud Platform without having to provide any equity stake to Google in return. While Google is focused on healthcare and biotechnology for now with the program, more verticals will be added later.

However no-strings-attached the startups' participation may be, there's no question that Google chose them for a reason and that in turn, the startups' founders and funders are eager to get inside Google's research orbit. Under the program, each startup identifies a sizable machine learning program, and Google's goal is to help them solve it within the six-month period.

Healthcare is a top target for machine learning and AI applications, with the sheer size of the market being one major reason. Healthcare costs in the U.S. alone amounted to $3.4 trillion in 2016. The Center for Medicaid and Medicare Services, which oversees those massive government programs, has projected that healthcare spending will reach $5.5 trillion by 2025—that's 20 percent of GDP.

Under Armour sweating out its digital transformation: Active apparel maker Under Armour has made serious strides toward digital transformation in recent years, through introducing a broad connected fitness platform, developing large data sets for analytics and retail optimization and other moves. But Under Armour this week reported a bit of a shaky third quarter, posting a drop in profits and cutting its forecast.

On a conference call, CEO Kevin Plank attributed the company's problems to that old bugaboo of growing pains:

Yet for as much as this rapid growth, realize amazing milestones, stories and accomplishments, we are now dealing with issues related to that growth. In the past few years, while we delivered industry-leading innovation, built an amazing roster of athletes and assets, accelerated our footwear business, expanded DTC in our wholesale distribution, while gaining traction in our International business, our operations have become increasingly more complex.

Under Armour has developed a plan that's aimed at building stronger bridges with customer, helping it fine-tune new products to ensure they're in line with trends and real-life customer demand. The company is also dealing with the on-ramp of its new SAP ERP system, which went live on July 1. The project impacted supply chain activities during the quarter, causing delayed shipments and other issues that hurt Under Armour's financial results. The company also cited change management issues with the new system among its workforce and partner ecosystem.

POV: It's not unheard of for a big ERP system rollout to impact company earnings, especially ones with complex physical supply chains like Under Armour. The company says the system is stable and running well, but that change management issues are still ongoing in the fourth quarter and could drift into 2018.

Overall, there doesn't seem to be much cause for panic at this point; Under Armour has been one of SAP's highest-profile reference customers in recent years and there's little doubt SAP will do everything it can to ensure a rapid resolution to the problems. Still, it's something to watch, and with the Consumer Electronics Show just a couple of months away, Under Armour will be looking to showcase and get its newest innovations to market as smoothly as possible.