IBM Eye

I’ve been pondering for sometime about a future hookup of IBM and Cognos. Motley Fool talked about it maybe six months ago and IBM’s appetite seemed insatiable around that time. This announcement (IBM to use Cognos as its embedded workforce performance reporting and analysis engine) makes that more likely I suppose. There are only three BI players out there and Hyperion was snapped up by Oracle earlier this week. And then there were two. IBM doesn’t really have a relationship with Business Objects and they are increasingly wed to Cognos and BI is increasingly important (at least in the eyes of tech buyers). I’ve looked at IBM’s acquisitions over the past months, and they are all companies that IBM knew well from these sorts of partnerships. But, they also were all (excepting ISS $ Filenet) on the small side, giving IBM the beer-goggled belief that they could add value through the purchase with their legion of sales folks and solid reputation. (I ought to disclose that I am of the opinion that most acquisitions are the result of upper management sitting around in some meeting trying to come up with something clever to do to look productive. The other acquisitions happen because someone lost a bet I guess.)

Now Cognos would be hard for IBM to swallow - a current market cap of $3.5+ Billion - is about what Lotus and PWC’s Monday consulting arm were and IBM has such great momentum right now it would be unwise to risk a Lotus-type organizational shift simply to block other suitors. But… the market seems to be expecting someone to come in and gobble them up. But… the timing just doesn’t feel right for it to be IBM. IBM has a great game plan that’s just starting to yield fruit and the risk reward of that addition likely isn’t worth it right now.

Cognos is interesting though, because there is so little overlap with IBM and because their BI technology is so good (correct me if I’m wrong there… I’m a user rather than a developer). They practically invented the concept and are trusted in the marketplace and taught in business schools. Consolidation is happening so fast and IBM management has received only accolades from the recent binge.

So I don’t know. As I close my wishy-washiest post of all time, any thoughts from readers on the acquisition would be appreciated.

Per Joystix.com, a rumor was posted for a few minutes this morning that IBM was in the process of shrinking the Wii’s Broadway chip for a “future Nintendo handheld — presumably one that plays Gamecube discs.”

He acknowledges that the rumor may be false, but rumors or kind of fun regardless.

Robert X. Cringely, the host of PBS’ “Electric Money”, a long-time tech industry commentator, and a highly opinionated blogger, offers a scathing critique of IBM in a recent post:

IBM is a disaster-in-the-making. Big Blue as a total enterprise is running primarily on customer inertia and clever advertising, which definitely isn’t enough.

One aspect of IBM’s malaise is the disconnect between the traditional public image of the company (basic research, advanced R&D, patents, patents, patents) and the fact that most of their revenue-generating businesses aren’t about hardware or software products at all, but services. Why continue to spend all that money if you’re mainly just a business/IT consulting company made up of IGS and Price Waterhouse? Why, indeed.

Full article: Google-on

Service-oriented architecture (SOA) is a much-discussed concept in IT circles these days, and forms a key part of IBM’s software and services strategy. Earlier this month, IBM announced a whopping 31 new products and enhancements related to SOA, primarily in the company’s Websphere product line, as well as a massive SOA training effort for IBM’s consulting staff (see also more in-depth coverage here).

Despite the announcement’s intent as a show of IBM’s commitment to SOA, industry analyst reactions have been decidedly mixed. Forrester’s Randy Heffner calls the solution “rich, but complex“. Others have been less diplomatic.

SOA may have jumped the shark the other week with IBM’s mind-numbing announcement of 21 different SOA products and services. (Joe McKendrick, ZDNet)

Clearly SOA is key, if not the core, to IBM’s software strategy. We will of course have to wait and see if this “shock and awe” approach to dominating a market will work - not to mention solve the customer problems. I do wonder how 31 separate products (so far!) can really deliver the simplicity and agility that is meant to be at the heart of SOA. (Ronan Bradley, Roads to SOA)

CNet reports that, in contrast to Oracle’s apparent desire to add a Linux distribution to its portfolio, IBM prefers to have at least two independent Linux distributors serving corporate customers. From the article:

“Our view is that one of the great things about Linux is that you don’t have to own it to have the freedom of movement and have whatever stacks you need,” said Scott Handy, vice president of Linux and open source at IBM.

Handy was responding to comments made by Oracle CEO Ellison to the Financial Times, where he said that he wanted Oracle to control a “full stack” of software, including the Linux operating system.

If Oracle did try to buy a Linux distributor, such as Red Hat or Novell, Handy said “we’d stick to our strategy of having two or more independent distributors and have to wait and see what happens.”

Full article: IBM to Oracle: You can’t buy open source

There has been a lot of noise in the blogosphere lately in regards to some comments supposedly made by an IBMer in Germany that IBM will not use Windows Vista - but will move to Linux desktops.

Of course everyone got really excited and is claiming IBM has completely dumped Windows in favour of Linux - and will move all 300,000+ employees to Linux worldwide.

The truth is not quite that exciting (or scary !!).

Some more balanced reports have since come out - especially after a spokesperson denied any such move by IBM … Information Week reports IBM Switches Linux Desktops, But Isn’t Dumping Windows.

I think the IBM spokesperson didn’t really offer much in the way of information about what’s actually happening inside IBM - so let me clarify things from what I see internally. Please note that these are personal observations only and do not represent IBM policy or direction - I may inadvertently make assetions which don’t actually match reality or IBM strategy.

IBM Linux Desktop Client

IBM has had a semi-supported Linux desktop for at least 4 years now - and apparently as many as 15,000 people use it on their machines internally.

There have been several things holding IBM back from a more wide-spread rollout of Linux - lack of a supported Lotus Notes client being the number one item. Notes-under-Linux via Wine has been commonly used, but has not actually been supported internally, nor encouraged.

A mature set of productivity tools has been another limiting factor, and OpenOffice.org has addressed many of the concerns there - but it’s still relatively lacking in functionality compared to MS Office, or dare I say it - Lotus Smartsuite (eeek !!). A lot of the work IBM has done in integrating it into the Workplace Managed Client has addressed some of the issues (internationalisation being one of the main concerns for IBM worldwide).

Most recently, the biggest thing stopping further rollout of the Linux client was simply that they prevented new deployments for over a year while I think they worked out some compatability issues, and finalised the actual distribution that was to be used (there were some licensing and support isses to be sorted). It’s only been in the last couple of months that we have now been able to download and install new Linux clients - with a new distribution based on RedHat Linux.

Notes on Linux

It is only now that we are beginning to see the foundation put in place that will allow a more wide-spread adoption of Linux internally. Notes on Linux is the most critical - however, until the next major release of Lotus Notes (Hannover) is available in a few years time - we have a interim solution which utilises a plug-in to the Workplace Managed Client to facilitate Notes on Linux. This solution is still in beta testing and won’t be fully supported for a while yet - so this is still a bit of a limiting factor, but we are on the right path there.

Workplace Managed Client + Productivity Editors

Of course, the OpenOffice.org based editors built into the Workplace Managed Client will provide an integrated solution on Linux for productivity tools - although I suspect there will be widespread resistance to using these tools for people who have become used to the abilities of MS Office and aren’t flexible enough to adapt. I see this slowing the adoption - but not stopping it … mostly it is just an education exercise, and the continued work IBM is doing in this area will make the experience better as we proceed - so this observation is merely a point in time. Interestingly, the complaints I hear are mainly from sales people who create complex Powerpoint presentations with fancy transitions and other such distracting frippery. The current capabilities of the suite are more than adequate for the vast majority of typical office workers - it’s only IBM’s sales-oriented business that drives (sales) people to insist on the bling

Firefox

Of course, more and more tools are browser based now, and while some of the tools we’ve had in the past relied on Internet Explorer - these are mostly gone, replaced by applications that work just as well on Firefox - which is now fully supported (and encouraged) inside IBM. There are some isolated applications that are still to be migrated, but my understanding is that these are being worked on, and it won’t be long before we have a 100% Firefox friendly environment.

Software Group

Given I work for the Software Group, and indeed for the Lotus brand - we are seeing a lot of effort internally to set ourselves up with the technology to utilise our own products as a corporate solution. We have IBM Workplace Collaboration Services and the IBM Workplace Managed Client deployed to use - on either Windows or Linux. We can get access to the Notes plugins to the Workplace Managed Client for full integration there, and we have the built in OpenOffice.org based editors. We are actively encouraged to utilise this system, and that includes running it on Linux if we are comfortable doing so. There is support and training available to those people not yet fully comfortable with Linux.

Personally I don’t run Linux on my own desktop machine yet - mostly because I haven’t had the time to migrate (and I run too many Windows-only applications on my machine … mostly web and graphic design software, Dreamweaver, Photoshop, etc), but I do have Linux running on my second laptop that I use for software demonstrations, so I get the best of both worlds in a way.

Vista

There has been no talk about migration to Vista - but I would think it is way too early to consider that anyway. IBM delayed migrations to Service Pack 2 of Windows XP for quite a long time because of compatability issues with some internal applications. I expect IBM will take its time to ensure that Vista does not break any of the thousands of applications utilised across the globe before making a recomendation either way.

One of the key messages IBM promotes to its customers is choice, for example, open standards are about choice - by standardising, you can choose your implementation knowing that it will work with the other software in the enterprise the same way because of the standards. IBM will never stop producing software that supports Windows for as long as we have customers that demand support for it. The same way, customers are now demanding support for Linux - so practically the entire IBM software portfolio and hardware portfolio has been made Linux ready.

Conclusions

I don’t see IBM forcing everyone on to Linux - and even if it becomes the default operating environment, it will take several more years of development to be ready for everyone and all their specialised needs. I’d hope IBM will not renew a global enterprise agreement to use Windows everywhere - rather I’d expect that decisions will be made on an case-by-case basis, or at least on a county-by-country basis … every location has their own specialised applications that might require a particular platform.

So from what I see, IBM is encouraging its staff to move to Linux - but it’s certainly not a move that is happening right here, right now for absolutely everyone. There’s still a way to go I think, before we are 100% ready for the move - but most of the foundation is in place through IBM’s own software portfolio and other complementary technologies that run on Linux too.

I say we give the people a choice - let them decide for themselves which path is better. This is what I see IBM doing both internally, and also for its customers.

By the way - would it confuse things if I mentioned that the same changes we are making to the IBM client-side software portfolio will also allow us to run Mac OSX clients instead of Linux or Windows. Even more choice - cool!

A Mercury News report published in the Miami Herald speculates that IBM might purchase Network Appliance, a network storage device company. Apparently NetApp shares have surged in response to rumours about a takeover.

Mercury News: Network Appliance shares rise on IBM speculation

Shares of Network Appliance jumped Thursday, for the second day in a row, on speculation that the storage appliance company would be acquired by computer giant IBM.

Network Appliance, based in Sunnyvale, makes storage devices that can be attached to computer servers to expand their storage capacity. It is in one of the fastest growing segments of the storage business, called network attached storage.

There was scepticism from analysts about this: ”

But analysts who follow Network Appliance said a purchase by IBM would be unlikely.

“I would put little credibility in it,” said Daniel Renouard, an analyst with Robert W. Baird. “It would be expensive and the cultural differences are pretty big.”

Apparently, neither company is commenting on the suggestion.

Steve Rosenbush writes some predictions for 2006, and includes some targets that might suit IBM (and some other big players in the marketplace).

10 Deals the New Year May Bring

Lawson Systems and Oracle
Always-hungry Oracle spent $10.3 billion on 13 acquisitions in 2005. Is it finished? Not likely. It may want to continue the spree with enterprise software maker Lawson, which is well-positioned in the growing market for business-process software. Buyers of Oracle’s software increasingly want to know how to integrate technology into their companies in ways that make the most business sense. If Oracle doesn’t buy Lawson, IBM or SAP might, for the same reason.

Business Objects and IBM
As the software market continues to consolidate, smaller players like business intelligence leader Business Objects might make a good fit for IBM. Even if IBM doesn’t take the bait, Oracle or SAP might.

BEA Systems gets gobbled up?
Here’s another small enterprise-software player that would bring value to a larger company’s offerings. It would be a nice fit with any of the larger software players, including IBM, SAP, and Oracle.

Personally I don’t see IBM considering BEA a purchase target. They have been marginalised in recent years, without a clear strategy, and a portfolio that is severely lacking in some areas. Then again, there might be some technology that BEA owns that would fill a niche in IBM’s broad On Demand strategy, so IBM might buy them for that - I’m not familiar with all of BEA’s offerings to see if there is anything there that would be suitable.

The Register is reporting that several blue chip firms, including IBM, are lining up to sponsor UK soccer team Manchester United.

Google or IBM to sponsor Man Utd?

Blue chip firms and mega-brands - including Google, Yahoo, IBM, Levi Strauss and Coca-Cola - are apparently lining up to take over the shirt sponsorship of Manchester United after Vodafone’s decision to curtail its £9m a year shirt sponsorship deal. The Observer quotes unnamed City sources to support a theory that all are prepared to pay more than Vodafone in order to be associated with the Red Devils. Conspiracy theorists will note that Google recently established an office in Manchester.

IBM sponsor a football team ? I’d like to see that !

(Via Rob Evans)