Systems Interlude, STG Lunch – IBM Software Analyst Connect 2009

While at the IBM software group analyst event this year, along with several other analysts, I was invited to a lunch from the IBM systems group (or, “STG”) – hardware, from x to z, including storage. In particular, it was the new general manager, Helene Armitage, for software in the systems group talking about the growing importance of software for selling hardware. While IBM has Tivoli, the systems group maintains its own management software and, of course, operating systems and virtualization that goes along with it. (See Timothy Prickett Morgan‘s piece from today for more background on the group and execs.)

Aside from introducing a bunch of (presumably) software-centric analysts (like myself) to the systems side of software, the main themes were:

• Getting closer ties with the software group – they want to be “the foundation for what [Steve] Mills builds on,” as they GM said.
• Modernizing the talk around IBM’s platforms – see below.

There weren’t any launches or anything, but the GM did start to outline some interesting initiatives and positions, highlights below:

• From general purpose to specialized boxes – responding the Unified Compute ideas from Cisco and the like, but also the fact that massive cloud providers seem to demand customized boxes, a lot of the discussion got to providing more specialized boxes. Things like the CloudBurst box and iDataPlex which, you could lazily call an appliance, but are really big boxes and racks custom built for a specific way of using hardware.
• Jonathan Eunice of Illuminata asked about the dev/ops effect on hardware, pointing out that systems providers that cater to that kind of IT-think will be in a good position if it hits big. Those of you out there, dear readers, who put up with my incessant rambling on this topic know I’d violently agree. Indeed, the willingness that the GM represents from STG to cater to IT staff beyond box-only performance-hog mentality is a big opportunity. As Eunice also rightly pointed out, it’s certainly a chink in the enterprise infrastructure status quo‘s armor that VMWare/SpringSource is looking to build go through – it doesn’t seem like anyone else has noticed that ever widening hole. Key here for IBM is focusing on function, not the specific hardware. Outside of the traditional customer base and (to be it tongue in check) “those who know better” trying to sell anything but x86 here will be like the bad old days of American car companies competing with imports. That said, there was mention of selling 50 new z (mainframe) customers last year – I’m pretty sure we’re a long way from a mainframe renaissance, though.
• There’s a high degree of virtualization agnosticism – VMWare, Hyper-V, Xen, KVM, z/VM, and PowerVM: pick your poison. The x86 chip crew does a good enough job, it seems, tooling silicon up for hypervisors, and IBM has its own chips covered. Gear heads will go on about z and Power virtualization, which is fine for existing folks, but the same rule of dev/ops applies: either speak to x86 or speak only to function and benefit.
• To the point of all this function and benefit over spec, the GM summed it up nicely herself: on client calls “we spend more time now talking about the software instead of the hardware.” Part of that is the fact that a thick generation of IT buyers are conditioned to desire commodity hardware over specialized boxes.
• One analyst asked about networking. As the GM said, prefacing it with a “this is my view,” but, “IBM is not the network company.” Too bad that token ring thing didn’t work out.
• While STGs has it’s own stable of operating systems, Linux is still a big deal for them. Indeed, as the GM said, “I think we’ve had a fundamental impact on the Linux industry that we’re happy with.”
• The GM saw STG as being geared up for (private) cloud delivery, but the articulation of how exactly it fit in wasn’t detailed. Granted, Tivoli operates here, and the CloudBurst offerings are cloud-bound. Still, like most of IBM’s cloud programs to date, there’s a distinctly Blue cloud feel to it – not that we know what clouds any color except Amazon really look like, really. There are certainly “cloud in a box” offerings from IBM now, but I haven’t gotten a feel for how those are being received in IT departments. Part of that is that it’s too early to tell, while the other part is increasingly skepticism on my part that “private cloud” is, long term, a good thing or, best case, something that you could fairly compare to (public) cloud.

It’s worth tying in a some commentary from Steve Mills’ closing Q&A here. Judith Hurwitz asked him how he’d run software at HP. As part of an answer that he summed up at the beginning as “the way we’ve done it at IBM for the past 20 years,” Mills said the different IBM groups spend much effort on staying independent from each other. Though they don’t have to rely on each other for success, they can leverage each other for additive success, he said, making a somewhat subtle distinction. Clearly, Mills implication was that HP wasn’t being run this way.

Mapping that view in, it makes organization sense for systems to maintain its own software group rather than shove it all off onto Mills plate. And, as several analysts smirked over the STG steaks, governments might just go anti-trust crazy if the two were merged any closer – a smirk I’m not really qualified to judge.

Whatever the tie-up or the implications, STGs biggest challenge is the same as its been in recent years: convincing people to buy more than commodity (HP, Dell, etc.) boxes and storage. Typically, this means selling new functionality and benefits rather than the naked boxes themselves which, really, is mostly about software.

Disclosure: IBM paid T&E and is a client. See the RedMonk client list for other relevant clients.