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Big Blue's Software Spending Spree

Posted by ryuzaki0 on from the corporate-sized-shopping-carts dept.

abb_road writes "IBM has gone on an aggressive acquisitions spree for document management packages in the past three weeks, spending more than $2 billion to pick up two companies. The companies, Webify and FileNet, are expected to become part of IBM's Information on Demand strategy. The acquisitions point to a larger industry trend: a focus on software for unified corporate data management. From the article: 'It's a crucial time to jockey for most-valuable-software-provider status, because companies want to buy more from fewer players, and they're tired of buying stand-alone pieces of software like customer-relationship management that don't fix real-world business problems. The new message to software vendors: Fix my call centers, don't just sell me a product. As a result, the lines are starting to blur between software companies that offer, say, Internet security, databases, and tools to manage nearly every part of the business. So, too, are the lines between service companies and software companies.'"

9 of 85 comments (clear)

  1. I'm a little confused by truthsearch · · Score: 4, Insightful

    IBM definitely has the resources to create many of these software services themselves for alot less money. I think it's as much about buying these companies up before the competition can than getting the software.

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    Developers: We can use your help.
    1. Re:I'm a little confused by bhmit1 · · Score: 4, Insightful
      IBM definitely has the resources to create many of these software services themselves for alot less money. I think it's as much about buying these companies up before the competition can than getting the software.
      Yes and no. They do have the people, but most are off consulting or supporting the existing product set, not developing new products. IBM has been making all their advances by acquisition for many years now. And seeing what the products look like when IBM builds them in-house, we are probably better off that way. Hint: what do you think happens when someone says don't build something new if we already have it, and they have lots of different tools? Lots and lots of ugly glue and a poor tech that has to learn 15 products to do something other places do with a single simple interface.
    2. Re:I'm a little confused by gstoddart · · Score: 3, Insightful
      IBM definitely has the resources to create many of these software services themselves for alot less money. I think it's as much about buying these companies up before the competition can than getting the software.

      Well, companies have market share and customers. If you build from scratch, you have to go in and compete from the ground up. If you buy an established company, you then get to control the direction of that software, as well as instantly getting yourself customers.

      And, when fortune 500 buyers are looking at stuff, those reports from the Gartner Group go a long way. Basically, if your software isn't in the magic quadrant which makes it best of breed, you're probably not considered at purchase time. It goes a long way.

      Buying FileNet, they undoubtedly get a huge installed base, as well as the opportunity to further sell into that organization. (Never underestimate the value of credibly getting your foot in the door to sell all of your other products.)

      And, really, time to market and maturation of the software means that if you have the pockets, you can buy it sooner and possibly cheaper than you could build it. But, buying it means you get a salesforce, support infrastructure, and people who already know the software. As well as market recognition and whatever goodwill that has earned them from customers.

      I've been watching some heavy-duty consolidation in the markets for a few years. A lot of companies prefer to acquire than try to develop from scratch. So, you're partly right - it is about buying them before someone else does. But it's partly about being in a new market segment next month, instead of in three years with a rev 1.0 product. That's too long of a time when you're competing against people already established in the market. Because they will have moved ahead a lot in that time, so you'll always be playing catch up.

      Cheers
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      Lost at C:>. Found at C.
  2. Re:Or... by Anonymous+Monkey · · Score: 5, Insightful
    Puts on Troll Foil Hat and says...I think IBM isn't the only crazy player in this field, because businesses are trying to fix something with software that is broken on the human side of things.

    Every job I have ever had has a pattern with IT: Our people aren't sharing information or documenting their work properly, lets spend X to upgrade our computers...Our people aren't sharing information or documenting their work properly, lets spend X2 to upgrade our computers...Our people aren't sharing information or documenting their work properly, lets spend X4 to upgrade our computers...and so on.

    People need to start being more organized before any data-management software dose a bit of good.

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    We are the Borg...
  3. Re:More Crap for the IBM rep to push by FooAtWFU · · Score: 3, Insightful
    Dealing with the IBM rep is bad enough but now we will have to deal with them pushing their new products when I just want answers about the product I just bought from them.
    I don't work for IBM (anymore! haha, byebye internship) but from what I've seen, IBM's focus is not on providing people spiffy software so much as...
    The new message to software vendors: Fix my call centers, don't just sell me a product.
    This is very much the direction they are trying to make things head - not a hardware company, not a software company, not even as "software as a service" company so much as a business company - they want to be "all sorts of IT and business services, including software and such to help keep things moving". They will gladly come in and show you all sorts of ways to change (ideally, to streamline) the way you're doing business. (If you pay them to. And I can't speak to their results one way or another. But would you like some links to spiffy promotional literature?)

    Hmm. Was the summary written by an IBMer by any chance? I don't see the words "on demand" or "business transformation" or anything like that, but...

    --
    The World Wide Web is dying. Soon, we shall have only the Internet.
  4. Re:Interesting point by AutopsyReport · · Score: 3, Insightful

    Is the current emphasis on data storage and communication really just a fad?

    No, not at all. The current emphasis on storage/communication/collaboration is the due to the business world recognizing the capabilities of what computing can do for them. Most businesses are not interested in the computational power of computing as much as they are the expenditure-reducing, labour-reducing and capability-increasing power of computing. The present computations revolve around business logic. Typically the business world holds a much different perspective on how a computer is useful to them.

    Excel works, and a lot of people use it, but it doesn't seem to be a "killer app" for much of anybody anymore

    Excel was and still is a very powerful too. There really isn't a subtitute for it. Personal, business, and government all use it. Microsoft Office isn't popular by coincidence -- the Excel, Access, Word, etc., suite is very powerful for all categories of work.

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    For he today that sheds his blood with me shall be my brother.

  5. Re:Or... by cynical86 · · Score: 3, Insightful
    It may be a software/IT problem to acquire and require metadata to be stored with a piece of information, but how do you design an indexing scheme that makes it obvious how to index data and enforces consistency while still allowing meaningful classification? How do you create a culture where a user's time spent indexing and cleaning said information is considered well-spent and valuable in its own right? How do you get people to look for and use the data, however well-indexed it is?

    It's not like we don't have examples of classification systems that work. Finding a piece of information in a library might take a few minutes to locate a set of data, and then minutes to review material and find a fact, or hours or days to poll opinions and assemble an informed picture of the subject under investigation. Indexing schemas in document management are evaluated by how many clicks it takes to get to an already known piece of information.

    Or maybe it is that the business metrics applied to this sort of activity are based on the speed and volume rather than the quality of work? If a poor decision was made through a lack of information, was it the difficulty in locating this information, or was it a lack of will or desire to adequately research a decision before making it?

  6. Bloat bloat bloat vomit by wsanders · · Score: 3, Insightful

    Document management is a technique for turning all the crappy little internal web sites in your company running Apache, PHPNuke, or some random blogging thing into giant bloated internal web sites with exactly the same content, overpriced on-site consultants, and $50K per year support contracts.

    --
    Give a man a fish and you have fed him for today. Teach a man to fish, and he'll say "WHERE'S MY FISH, YOU IDIOT?"
  7. Re:Worthless by Whelps · · Score: 3, Insightful

    Dude, do you realize how stupid you sound? FileNet has its flaws, but it is a full-scale enterprise application that has an enormous client base and it would be near impossible for 20 average slashdotters could create a rival an application that even comes close to gaining market share on them in a year or two timeperiod. Regardless of the quality of the application itself, a company's worth comes from its revenue stream.