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IBM’s Software Business

The debate always has been about IBM not getting into the application business like SAP or Oracle

I just read an interesting interview with Steve Mills, IBM’s top executive of its software business,  by “The Intelligent Enterprise” magazine. Steve is a very capable and intelligent executive at IBM. He has been at the helm of the software business since the early 1990s – that will be almost 20 years. Under his leadership, IBM’s software business has grown significantly, contributing the largest part of IBM’s bottom line. He ushered in the era of acquisitions to expand the software product and solutions portfolio – Lotus, Filenet, Cognos, Tivoli, SPSS, Informix, Rational, and many others.

The debate always has been about IBM not getting into the application business like SAP or Oracle. IBM has chosen to stay out of ERP/CRM application space and focus much more on the infrastructure pieces – database, middleware, systems management, business process, and analytics. Nobody comes close to IBM’s deep expertise on DBMS and transaction management software. All of these technologies were pioneered by IBM from the 1970s onwards. The Turing award winners for both DBMS (late Dr. Ted Codd) and transaction management (late Dr. Jim Gray) did their seminal work while at IBM. Where IBM faltered during the early days was in its lack of focus on software, being the biggest hardware company. But that all changed during Steve’s leadership.

I particularly liked his articulation of Oracle as a competitor:  “Oracle is not a very strong technology company, but they are a very high-testosterone company. They love to beat their chest and talk about how they always win and never lose. They’re very declarative in that sense because their perspective is that lies that go unchallenged become the truth. If you scream loud enough, it’s hard for anybody to get a word in edgewise.”

What can I say? Being an IBMer for 16 years and then spending the next 10 years at Oracle, I quite agree with his comments above. Oracle has been an aggressive marketing company and its core product, the Oracle database, works well. One cannot just win by marketing alone. But one should not forget that the basic technology for the Oracle product was originated by IBM researchers during the early days of relational database. Key pieces of that technology were all invented at IBM – SQL, cost-based optimization, ACID properties, scalability features, two-phase commit, etc.

IBM’s Software division has come a long way since my days at IBM and it is heartening to see that.

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More Stories By Jnan Dash

Jnan Dash is Senior Advisor at EZShield Inc., Advisor at ScaleDB and Board Member at Compassites Software Solutions. He has lived in Silicon Valley since 1979. Formerly he was the Chief Strategy Officer (Consulting) at Curl Inc., before which he spent ten years at Oracle Corporation and was the Group Vice President, Systems Architecture and Technology till 2002. He was responsible for setting Oracle's core database and application server product directions and interacted with customers worldwide in translating future needs to product plans. Before that he spent 16 years at IBM. He blogs at http://jnandash.ulitzer.com.

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