Steve Mills: Less is More, Keeping Our Attention, IBM as “an ERP company”

Wow. That was great. Steve Mills, IBM Software Group General Manager, just wrapped up his hello pitch in under 20 minutes. This is news, because he has been known to give 2 hour, 140 slide presentations at this event. Not an optimal way to maintain attention…

What did he say? SWG is doing great, with nice growth and improved profitability (not bad during an acquisition streak).

“People ask me why don’t we sell applications?”

The answer as ever is that IBM can make more from surrounding services, than the app itself.

We sell an extraordinary amount of software into Oracle, Retek, Peoplesoft accounts. databases, systems management and collaboration. Oracle’s biggest customers are our biggest customers. SAP use more WebSphere for end to end heterogeneous integration than anything else.

We’re a huge multibillion dollar ERP company. We just don’t sell ERP applications, but services, systems and software around it. The “at time of sale” ecosystem associated with ERP is 5x the revenue. The “surrounding pool of money” is what IBM targets.”

Mills made the extremely apposite point that there is far too much shelfware in this industry. IBM needs to make sure that its customers actually implement the software it sells. Well, yeah – with that many services people, you think… But seriously, shelfware is a huge problem in the industry. Does IT Matter? Not if the IT isn’t implemented…. Cheap Technology Officers generally don’t buy stuff they don’t use.

Many software companies have recorded revenues on software that is never installed… not so smart in the post-SOX era. Software doesn’t install itself. That is a fundamental IBM strength. While competitors like to slam IBM as a body shop, customers like service wrappers to get software installed. IBM has a model for this, and its working. You don’t record 40% growth in WebSphere, and 30% growth at Tivoli, as in recent quarters without doing something right. We’ll learn more over the next couple of days.

 

Technorati Tags: IBM – WebSphere – Retek – Peoplesoft – ibmanalystconf06 – SWG

 disclaimer: IBM is a client, and paid T&E for our trip to Stamford, CT.