IBM Software Group contribution good, no Long Tail?

Adding to To IBM’s bottom line. Congratulations folks. The software and services M&A model is working pretty well it seems, for which Software Group (SWG) general manager Steve Mills deserves no little credit.

Larry Dignan has a write up here, which highlights impressive double digit revenue growth across SWG.

Compare and contrast with competitors.

These results follow lackluster results from the likes of SAP and Oracle. In the quarter, IBM had software revenue of $5.6 billion, an increase of 14 percent from a year ago. One glaring issue: IBM wouldn’t disclose its organic growth for software, which backs out recent acquisitions.

IBM’s Filenet purchase, for example, is a great example of cross-selling opportunity, and evidently execution, by the Information Management group.

Imagine though if Big Blue did a better job attracting grassroots developers, and nailed the software as a service (Saas) opportunity. Its time for IBM to take off the shackles, if not the gloves. The business model is working well for the Fortune 500, but to achieve a real breakout some new thinking will be required and far more appetite for risk. One of the weirder things I heard last year was an IBM executive explaining it was partly his role to make sure IBM new technology maven Rod Smith didn’t do something too “out there”. He needed to sign off on the commercial case for the kind of projects Rod was interested in working on. That is not right. Give Rod more resource so he can experiment and get things done with people. It often seems these days like IBM requires that every product development needs to be lead by a ten million dollar+ services engagement with a Fortune 500 company. But you wont attract the best developers (outside IBM) to that model. Many of them don’t work in the Fortune 500…

IBM used to do too much primary research that didn’t turn into money – but it must avoid throwing out the Ruby with the bathwater.

explanation: I wrote this a while ago, and didnt post it, in case the the date thing is confusing you. disclaimers: IBM SWG is a client