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."

There 's a reason Apple's not in India.

[Anonymous Coward]

Apple is a marketing firm. They are in the fashion and luxury items business, not the nuts and bolts computer business. The probably spend more on internet marketing (including astroturfing) than they do in-house manufacturing.

Interesting

[dedazo]

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.

Fake Steve Jobs nailed this, as usual.

[PavementPizza]

You gotta hand it to IBM [blogspot.com]

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 [wsj.com] 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 [cnn.com] 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.

MMmmm, nope

[Colin Smith]

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.

 

And your basis for this is??

[Anonymous Coward]

Fact:

- IBM's revenue was over $90 Billion in 2006 excluding PC sales
- Software accounted for 40% of their revenue
- WebShere grew 23%
- Notes grew 12%

You and/or your company either aren't very good admins or your just a MS shill

Just ask any major financial biz

[Anonymous Coward]

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...)

Re:Interesting

[Undertaker43017]

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". ;)