As the interviews that are beginning to make their way up onto RedMonk TV can attest, our stay in Stamford for IBM’s annual analyst get together was something of a free for all of information. A bit of concurrency and dynamic languages here, some analyst relations chat there, the requisite Web 2.0 discussion, and more. All of which could have been predicted, since this event is the one occasion on the year that brings together executives and practictioners from the entirety of IBM’s Software Group. The question I find myself asking, however, is whether that’s enough.
True, the firm has immense resources at its disposal. Also worth mentioning that it’s one of the largest software organizations this side of Microsoft. Short of application software, there are few markets in which they don’t compete. But in a world which is seeing the increasingly artificial barriers between hardware, software, and services collapse, should Software Group be partnering more closely with other IBM divisions?
Before you reply that Software Group does indeed partner with STG and IGS, let me say – “I know.” Cross-brand interests like Linux have done yeoman’s work blurring the lines between the different businesses within IBM. But more is needed, if Software-as-a-Service (SaaS) is any indication.
Consider IBM’s history with the trend. To its credit, Big Blue saw the opportunity here early. It’s the rare SaaS business today that will not at least privately thank IBM for heavily marketing “On Demand,” lowering customer resistance to software hosted off premises. And many IBM partners have effectively transitioned from a strict client-server deployment model to SaaS with the help of IBM, be that services, software, hardware or all of the above. All of which is good.
And yet the story is not nearly what it could, and probably should, be.
Whether one is judging by Google queries, visibility in the blogging world, or otherwise, IBM is not leveraging its assets as well as it might. Microsoft, as an example, dominates the Google results for “hosted messaging,” and yet they’re concerned enough by Google to issue a statement questioning the viability of Google Apps. Meanwhile Amazon, an online retailer, has emerged as the leading purveyor of “On Demand” platform and storage technologies, which IBM’s sometime partner, sometime competitor Red Hat is in the process of fleshing that out with a legitimate software stack. And speaking of Amazon and Google, IBM – like many of its large enterprise software brethren – is increasingly dealing with sizable web entities that are built entirely on software that is not theirs.
So it’s all doom and gloom, then? Hardly.
IBM, of all of the larger firms, is perhaps the best equipped to seize the opportunity neatly described by their “On Demand” branding. Virtually every piece that’s required, they have. Software? Lots and lots of software. Hardware? Everything from mainframes to x86 servers. Services? Only a couple hundred thousand people. Hosting infrastructure? Check. The pieces, then, IBM has.
What’s needed now is an overriding, cross-divisional imperative to bring them together. Questions of revenue recognition and divisional branding and resource allocation need to take a back seat to the opportunity which, in case it wasn’t already obvious, is substantial. IBM’s done very well for itself the last few years focusing on the trees; now might be a good time to step back and look for the forest.
