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IBM the Next Great Software Company?

Diomidis Spinellis writes "A report in this week's Economist discusses IBM's globalization strategy and the company's presence in India. Refreshingly, the article admits that there's more to outsourcing than cheap labor, contrasting IBM's calculated investments with Apple's rapid pull-out from Bangalore. Although the jury is still out on how sluggish multinationals can compete with vigorous tigers, it seems that IBM has a credible strategy for becoming the next great software company, and that outsourcing is only a part of the puzzle."

25 of 132 comments (clear)

  1. IBM is in the computer business now? by stratjakt · · Score: 5, Insightful

    What a retarded article. They were (and still are) the first great software company.

    I remember cheering Microsoft for toppling their monopoly.

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    1. Re:IBM is in the computer business now? by flynt · · Score: 3, Insightful

      You do realize something can be a former X without precluding it from being a future X. IBM may have been the first great software company, but it does not follow that it will not be the next great software company. Is that your assertion? Grover Cleveland may beg to differ.

    2. Re:IBM is in the computer business now? by anomalous+cohort · · Score: 4, Insightful

      IBM is a great hardware company. It has never been known for great software. Ask anybody who has had to use JCL. The inventors of IEFBR14 could never be known as a great software company.

      I will admit that Eclipse is an excellent application but does anyone here remember Visual Age for Java? That app was seriously FUBAR and it would clobber ODBC on the machine when you uninstalled it which you invariably would since that is how bad Visual Age for Java was.

      I'd like to know the story behind those two products. How could the same company produce two products with such disparate quality? Is the open source development model so superior that even a company like IBM can learn to make great software? Is it possible for a mega corp, like IBM, to be able to turn itself around and learn from its failures to start producing such great success? I haven't a clue.

    3. Re:IBM is in the computer business now? by JordanL · · Score: 4, Insightful

      I suppose that depends. IBM has never been known for great consumer software, business or personal.

      As far I'm aware however, IBM is known for great development software, especially for inhouse dev cycles and hardware. Octopiler anyone?

    4. Re:IBM is in the computer business now? by darjen · · Score: 5, Informative

      IBM is a great hardware company. It has never been known for great software. Ask anybody who has had to use JCL. The inventors of IEFBR14 could never be known as a great software company.
      Ever hear of their Webphere Commerce suite of products? There are large companies all over the place that are built on it. My employer consults with and builds web sites for many of them. In fact I'd say their software is more solid than anything from Oracle or Sun. These last few months I have been building an internal application based on Oracle's technology/middleware stack and let me tell you, it is flaky as hell. I guess there's a reason most of my company uses Websphere Commerce to build enterprise applications...
    5. Re:IBM is in the computer business now? by Anonymous Coward · · Score: 5, Funny

      IMHO, Grover Cleveland was never more than a second rate software company.

    6. Re:IBM is in the computer business now? by Elvis+Parsley · · Score: 3, Funny

      Damn right. Grover Cleveland is the next great software company!

  2. Interesting by dedazo · · Score: 3, Interesting
    When Slashdot reports anything about outsourcing the consensus around here seems to be that it's bad and evil. Especially when it involves someone like Microsoft, like when Gates says more visas are needed.

    But when it's IBM, it's "refreshing" and "interesting"? That's just too funny.

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    1. Re:Interesting by JordanL · · Score: 4, Informative

      Actually, I think the article was saying that it was refreshing to see someone talk about outsourcing as more than cheap labor, not that the outsourcing was itself good or bad.

    2. Re:Interesting by Undertaker43017 · · Score: 4, Interesting

      Having worked for a company that outsourced a couple of projects to India, I can tell you that all companies care about is how much money it is saving them right this minute. I told my boss repeatedly, and he told his boss, etc on up the chain that the quality wasn't nearly the same, the answer always came back, "Yeah, but it is costing $Y less to do it!".

      Companies have a very short term focus on the bottom line, it's all about making sure the "street" is happy next quarter, so cut all of the costs you can. Long term doesn't matter to them anymore, because the average life span of a C-level executive is 1-2 years, so they don't care what happens to the company in 3 years, they are on some beach enjoying their mult-million dollar severance. Hum... maybe more companies should compensate their C-level executives based on their and the companies performance, and no "golden parachutes". ;)

  3. Re:IBM's Strategy by shotgunsaint · · Score: 2, Insightful

    Lotus Notes is definitely some pretty clunky bloatware... but have you ever had to administer an Exchange server? It's a nightmare. As I have no experience administering a Lotus Notes server, I can only imagine it would be slightly less convoluted.

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  4. Interesting by teknopurge · · Score: 4, Insightful

    I find it fascinating that the article calls out IBM's presence in India as anything more then an accounting advantage, especially with all the issues of late with India's college system. I was very interested to learn that many bachelor degrees that come from Indian Universities are no where near as comprehensive or difficult to get then the majority of our public universities, not even mentioning our private or elite schools.

    For all the concern about the Indian Technologists and how they were going to commoditize software development, somewhere along the way all the 'experts' forgot they wern't comparing apples-to-apples with regard to their qualifications and education.

    Flame on. =) (I jest, but my comment is a very real issue.)

  5. IBM understands how the maths work by Colin+Smith · · Score: 4, Informative

    Things like MQseries, Notes, TSM. They understand how these products mathematically benefit customers. A lot of other software houses have no clue how to actually benefit businesses, they just want to sell software. I'm not saying that no others can do the same job, but IBM is a one stop shop of best practices.

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  6. Fake Steve Jobs nailed this, as usual. by PavementPizza · · Score: 3, Interesting

    You gotta hand it to IBM

    No matter how crappy their business is they can always find a chunk of fool's gold in the pile of dogshit and then get someone in the media (or everyone in the media) to focus on that. Latest example was this story in yesterday's Wall Street Journal about how IBM's software division is just setting the world on fire. According to our spies at Fortune, IBM's flacks have been shopping this story around since January. At last someone bit. Wow, software sales were up 14% in the last quarter and a galloping 7% for the full year, and now Steve Mills is the second coming of Gerstner. Never mind that the way IBM did this was to move some revenue that used to get recognized in other categories over into the "software" division. Never mind that IBM spent $4.8 billion acquiring companies last year, and most of that went to software shops. Never mind that IBM's track record in software has been to buy up companies and ride them into the ground. Total assets at the end of 2006 are lower than at any time since 2002. Liabilities up, working capital down. Oh well. Who cares when that software division is setting the world on fire, baby?

    Remember when the IBM story was the services division? Then that crapped out. Then they tried the "second coming of the mainframe" story. Then it was Linux. Then it was "business transformation outsourcing," which our good pals at Fortune swallowed and said here was a $500 billion market, "an ocean of potential revenue" that IBM was going to tap into. They predicted IBM would top $100 billion in revenues by 2005. Ahem.

    Well, now it's software. Yup. That red-hot IBM software division. You know, someone ought to profile the one division that really is hot at IBM and which never gets any credit: the publicity department.

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    1. Re:Fake Steve Jobs nailed this, as usual. by lucabrasi999 · · Score: 4, Insightful

      Your post would be really insightful if IBM wasn't making money hand-over-fist. Unfortunately for you, the dollar signs in the 'profit' lines appear to back up the article. Apparently, IBM's track record also happens to include a few customers that are happy with their purchase.

  7. Re:IBM's Strategy by mmell · · Score: 3, Informative

    "As far as I can tell . . ."

    So all you know about IBM is that they make Lotus Notes, right (which I'll grant you, it's a pig)? And of course, you've never had any up-close time with MicroSoft's Outlook/Exhange product, so it's just peachy, right?

    Let's see - MicroSoft took DOS (a perfectly great system which performed almost exactly as advertised) and turned it into Windows Vista. Hmmm . . . were you saying something about a track record for selling "crummy products"?

    Let's see . . . MicroSoft Office . . . seems to me that no version of MicroSoft Office has ever shipped which didn't almost immediately require patching to correct some more-or-less egregious flaw.

    As for MicroSoft's partners - I used to be a contractor working to install/configure/integrate MicroSoft products. I personally never saw MicroSoft products "work pretty well on their own" for businesses I went to . . . that's why in 1994 I was worth $5,000.00/week as a consultant - to make those MicroSoft products work "pretty well".

  8. MMmmm, nope by Colin+Smith · · Score: 5, Interesting

    The textbook case would, of course, be Lotus Domino/Notes. Which is more expensive per-seat than Outlook/Exchange Sorry, Notes isn't just an email/groupware client/server like Exchange. It's a distributed application and database platform. And yes, it takes more work than your typical MS certified whatever can handle. Many of them don't even understand the benefits of the system. Set up and developed by a competent team, Notes can transform the way business processes work.

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  9. Just ask any major financial biz by Anonymous Coward · · Score: 2, Interesting

    how much they depend upon Websphere MQ to run their operation.
    Then compare it with MQMQ and hope you don't die laughing.

    Yep, some IBM software is utter crap but there are some bits that Microsoft can only have wet dreams about.
    for example, Websphere Message Broker vs BizTalk

    I don't work for IBM but IMHO, in the Middleware sector WMQ is the only real game in town.

    Notes is a far broader product that Exchange and for the most part puts Microsoft's offering into a cocked hat.

    If IBM really got their act together then they could become a Dominant player in software. This is however about as likely as me winning the Lottery (I don't play...)

  10. IBM from the Inside by Hypharse · · Score: 5, Informative

    I have been working in IBM Research for the last year and have witnessed a lot of the bad and a lot of the good I heard about IBM while outside it. I have witnessed the shift in IBM to Software and Services. One person in my group is from India and he talks occasionally about the plants IBM opens there employing like 50,000 people in one plant. They are nearly all entry level and the turnover rate is high due to their bad education systems. About IBM, the bad and the good that I have witnessed. The Bad: There are plenty of clueless people in charge making the decisions for everyone else. There are plenty of brilliant people working in IBM, but they are put on the same level and sometimes even a lower level than others. Many phds are not allowed to actually do their research, but instead are used to try and create ways to keep existing, flawed, processes going. They are also pushing many people into the "Services" side and they occasionally treat people who are not part of that "next big thing" like crap. When I started the group I am in had 6 very smart phds from premier programs in their field. We lost one to retirement and IBM would not allow for a replacement. Another was forced into the "Services" end but instead just quit and is working for another company. Now we are down to 4 and the others who have been there a lot longer than I have are very frustrated at IBM basically telling them they are not important because they are not part of this "next big wave". The Good: If you are lucky enough to get in the right groups that have money IBM is a great place to research ideas. Also, IBM has made many advances that are not talked about widely so that one post about IBM only getting a couple things right and pushing them to the extreme is bogus. IBM issues more patents per year than most countries and they generate billions from those patents. I was told (don't know if it is for sure a fact) that IBM makes more money from the PS3 and from the XBOX360 than Microsoft or Sony. You hear about IBM being involved with the PS3 because of the cell processor, but most people would be surprised to hear that IBM did a lot of the work for the XBOX360 as well.

  11. Re:More choices by trongey · · Score: 2, Insightful

    ...In want ads, companies always ask for "5 years of Foo, 10 years of Bar, 5 years of OOXML, etc. etc. etc. etc.". The more countries you have to comb for staff, the better chance that you will find somebody who matches your eclectic desired skills combinations...

    News Flash!
    When you see an add with those rediculous qualifications the company has already got a deal with their H1B candidate. They advertise with outrageous requirements so they can say that the necessary skill set isn't available domestically.
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  12. Did they grow up? by BluedemonX · · Score: 2, Informative

    This has been around for a while, and there's no jokes about Kwik-E marts, convenience stores, grape squishee or curry. Glad to see the juvenile racist crap that we used to see spat at articles like this almost instantly seems to be gone.

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  13. Re:IBM's Strategy by morzel · · Score: 5, Informative
    Chances are you're just a rabid anti-Notes troll, but I'll bite anyway.

    Lotus Domino and Microsoft Exchange are different products: the first is a "groupware" platform that happens to do mail, the other is a mail server that might be linked to some other Microsoft platforms (notably: sharepoint). The Notes client can be used for accessing "databases" (which are actually a container with semi-structured data and application logic in one), for which IBM provides a "mail database" that is kinda capable of handling mail. Outlook is a superb mail client that does nothing else unless you've got someone willing to create "outlook foms" that link to other MS technologies.

    The good about Domino/Notes:

    • Domino is multiplatform, Notes kinda (current Linux client is barely usable)
    • Security is a design fundamental in Notes/Domino. Notes has been doing private key crypto and signed code before Exchange was even conceived.
    • Domino/Notes is way better when integration company processes/workflows in your mail environment.
    • Restoring backed up mails/documents/databases can be done relatively easy, and has been like that for at least 12 years.
    The bad:
    • The Notes UI is infamous because it is so different from Windows and counter-intuitive to some people. This is for the major part historical (i.e.: Notes has been developed as a multiplatform client, and it includes a lot of legacy). If you want you can easily update the design of your mail database and replace it with an open source one (try that with Outlook ;-) -- see openntf.org for that. If you really want, you can just use outlook with Lotus Domino natively with the DAMO plugin.
    • The learning curve for Domino administration is steeper than that of MS Exchange. The impact of a good administrator versus a not-so-good one will be much more visible in a Domino environment than in an Exchange/outlook environment. Getting both to go further than a couple of machines requires good admins regardless of the technology
    The actual cost per user won't differ that much between either platform, and the featureset is different. If you're a Microsoft shop and have an all-windows datacenter, SQL Server, Sharepoint portal and whatnot you'll be installing Exchange. If you're not already linked as much to Microsoft technologies chances are that Domino/Notes is a better choice. If you're sensitive regarding security (or having to abide to certain security regulations), Domino/Notes is probably your best shot (a lot of banks think so, anyway).

    So, it's not a black and white issue, and there are very good reasons why Notes and Domino can be a better choice for a particular situation.

    Disclaimer: I know a thing or two about IBM/Lotus technologies (and of Microsoft and Linux, so don't hold that against me ;-)

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  14. Re:Software company? by C_Kode · · Score: 2, Informative

    DB2, Tivoli, Websphere, Lotus to name a few...

  15. Re:Software company? by edward350z · · Score: 5, Insightful

    No, you probably don't use any IBM software on your *PeeCee*. However, your company's accounting department probably uses an IBM mainframe running CICS. That airline ticket you booked on Orbitz went through IBM WebSphere to an IBM MQSeries server to IBM DB2, etc. If you drive a Honda/Acura automobile with voice-activated navigation, that's IBM ViaVoice. If you use Linux, a good chunk of the recent kernel patches were developed by folks on IBM's payroll. IBM is like Tyco or 3M -- they're involved in EVERYTHING you touch even if you don't see their branding front and center. Anyone who thinks IBM isn't a software company clearly does not have a big picture view of the IT world.

  16. Re:"IBM" and "Great Softare" by Dunbal · · Score: 2, Funny

    "hey buy the rights to deploy linux I should say."

    From who?


          Heck I'll sell them! Just sign here, and the CD is yours... uh sign quickly please. You brought the cash right? I'm allergic to checks, doctor says I can't see one. Hey can I interest you in our special on bridges this month? How about an Eiffel Tower?

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