IBM’s Software Business

I just read an interesting interview with Steve Mills, IBM’s top executive of its software business,  by “The Intelligent Enterprise” magazine. Steve is a very capable and intelligent executive at IBM. He has been at the helm of the software business since the early 1990s – that will be almost 20 years. Under his leadership, IBM’s software business has grown significantly, contributing the largest part of IBM’s bottom line. He ushered in the era of acquisitions to expand the software product and solutions portfolio – Lotus, Filenet, Cognos, Tivoli, SPSS, Informix, Rational, and many others.

The debate always has been about IBM not getting into the application business like SAP or Oracle. IBM has chosen to stay out of ERP/CRM application space and focus much more on the infrastructure pieces – database, middleware, systems management, business process, and analytics. Nobody comes close to IBM’s deep expertise on DBMS and transaction management software. All of these technologies were pioneered by IBM from the 1970s onwards. The Turing award winners for both DBMS (late Dr. Ted Codd) and transaction management (late Dr. Jim Gray) did their seminal work while at IBM. Where IBM faltered during the early days was in its lack of focus on software, being the biggest hardware company. But that all changed during Steve’s leadership.

I particularly liked his articulation of Oracle as a competitor:                    “Oracle is not a very strong technology company, but they are a very high-testosterone company. They love to beat their chest and talk about how they always win and never lose. They’re very declarative in that sense because their perspective is that lies that go unchallenged become the truth. If you scream loud enough, it’s hard for anybody to get a word in edgewise.”

What can I say? Being an IBMer for 16 years and then spending the next 10 years at Oracle, I quite agree with his comments above. Oracle has been an aggressive marketing company and its core product, the Oracle database, works well. One can not just win by marketing alone. But one should not forget that the basic technology for the Oracle product was originated by IBM researchers during the early days of relational database. Key pieces of that technology were all invented at IBM – SQL, cost-based optimization, ACID properties, scalability features, two-phase commit, etc.

IBM’s Software division has come a long way since my days at IBM and it is heartening to see that.


One response to “IBM’s Software Business

  1. Great IBM had great marketing , their transformation of MQ series and assorted parts into websphere was brilliant.

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