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IBM the Next Great Software Company? 132

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."
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IBM the Next Great Software Company?

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  • by stratjakt ( 596332 ) on Thursday April 05, 2007 @01:58PM (#18623709) Journal
    What a retarded article. They were (and still are) the first great software company.

    I remember cheering Microsoft for toppling their monopoly.
    • by flynt ( 248848 ) on Thursday April 05, 2007 @02:02PM (#18623783)
      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.
    • by JordanL ( 886154 )

      I remember cheering Microsoft for toppling their monopoly.
      IBM can be a vicious company, but damn if they don't usually end up with an excellent product.
      • by anomalous cohort ( 704239 ) on Thursday April 05, 2007 @02:27PM (#18624157) Homepage Journal

        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.

        • 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?
          • Yeah. Their consulting services overpromise and underdeliver though. I've seen a number of their projects fail at a big customer's site.
        • by darjen ( 879890 ) on Thursday April 05, 2007 @03:02PM (#18624719)

          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...
        • While I have used my fair share of IBM software produts that made me want to scream, it needs to be pointed out that the operating system for the as400 is one of the best business server OS's produced (object based, organization, stability, security, scalability, abstraction from hardware, etc. etc.)
        • The inventors of IEFBR14

          It's been sooooo long but let me see if I can drag it out of memory... "Probable programmer error"?
          • In the world of the IBM 360 mainframe, only the JES (Job Entry Subsystem) was allowed to do any file maintenance. So, in order to copy or move a file, you had to invoke a program. The program wouldn't and couldn't copy the file. You invoked the program using JCL (Job Control Language) and in that job step that invoked the program, you would specify the disposition of the file(s). That is how you could copy or move a file, in the disposition part of the job step.

            But what if that is all you needed to do?

            • Sounds insane to me.
              What's more insane is that all of this probably still works on the mainframes IBM is selling right now. What's the likelihood that your program will still run in 40 years worth?
              • by chthon ( 580889 )

                That is why I always have a good laugh when anyone mentions backward compatibility and Microsoft in the same sentence.

        • OS/360 (and everything that it eventually evolved into) was nothing short of revolutionary. For 20-30 years, IBM was the company to turn to for reliable software.
        • by WillerZ ( 814133 )
          IEFBR14 is now about 30 years old, and in all that time there have only been 2 bugs reported:
          1) IEFBR14 doesn't set a return code; this was reported and fixed about 25 years ago
          2) IEFBR14 source contains no comments; this was reported and fixed about 20 years ago

          Show me another product which has that kind of bugs/time ratio...
        • IBM is not a hardware company; and they don't intend to be. Look at their strategic moves to get OUT of the commodity game by selling of thinkpad to lenovo. The fact that YOU don't notice is mostly because IBM doesn't target you. They don't sell consumer software; they sell products that are used by businesses. Yes IBM sells some hardware, and some very good hardware. But to call them a hardware company would be like calling Microsoft an Operating System company; although that one is slightly more vali
          • Actually, IBM does target me. I develop server side applications. I haven't used their WebSphere application server in years. What I remember about it is great reliability, great performance, and a bit of a nightmare to administer. Things are most probably different now. I admit that I have not kept up to date on WebSphere. What I remember about it was that it had a funky directory structure. At the time, I was in a J2EE portal infrastructure company whose products had to run on all the popular application

        • IBM never developed Eclipse first hand, it was developed by a company that IBM bought :) If am not wrong, they didn't developed Visual Age. The same way.
        • Even I had a similar experience with their WebSphere Application Server. 3.5 was like a kia(not that I have used one) and 5.0 was a lexus(not that I have driven that, I drive a Honda). Left me wondering how the same company could produce crappy software and then a well designed,documented, easy to use software.

          My guess is that WebSphere 3.5 was just stitched together using multiple software from different teams,the get to market quickly strategy and 5.0 was built ground up using a very good team of programm
        • I'd like to know the story behind those two products. How could the same company produce two products with such disparate quality?

          This is what I heard while working for one of the WebSphere applications group. Eclipse was developed by a company IBM had acquired whose name escapes me -- started with an O I think. Anyway, even though they were IBM, they weren't "IBM": they used completely different tools for their work, had access to most of IBM's codebase but provided almost none of their own back to the
    • Well, at least that is what Cringely would say.
    • by Dunbal ( 464142 )
      I remember cheering Microsoft for toppling their monopoly.

            It takes a brave person to admit that. I bet you feel a bit silly NOW though, don't you? :D
  • So.... (Score:1, Funny)

    by cayenne8 ( 626475 )
    IBM is going from "Big Blue" "Big Apu"?


  • Interesting (Score:3, Interesting)

    by dedazo ( 737510 ) on Thursday April 05, 2007 @02:06PM (#18623843) Journal
    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.

  • Interesting (Score:4, Insightful)

    by teknopurge ( 199509 ) on Thursday April 05, 2007 @02:16PM (#18623967) Homepage
    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.)
    • by xzvf ( 924443 )
      The only reason in the US that private or elite degrees are harder to get is because the cost is 5x public universities. I suspect India has similar issues.
      • My point was that the information i have read over the past year paints a different picture: on the whole, a high-school education with some AP classes in the US matches up well comparatively with the knowledge attained though the 3rd year of the majority of Indian collegiate programs.
    • Re:Interesting (Score:5, Interesting)

      by Undertaker43017 ( 586306 ) on Thursday April 05, 2007 @03:26PM (#18625097)
      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". ;)
      • A coworker pointed out that if an outsourcing firm bills(1) you only a third what an American development team would, that allows the business to fail three times before they've spent as much as they otherwise would have.

        Chip H.

        (1) Note that I consider cost a different data point from what they bill you. e.g. There is an opportunity cost in failing three times.
        • When it takes five times as long to get it right, so you can ship a product, it erases any cost advantage.

          What India is going through with their education problem, really isn't all that different than what the US went through during the Dot Bomb years. There were many people in IT that had NO business being there. People jumped on the bandwagon, because IT is where the money was, just like India.

          Unfortunately for the US, with the "money" moving to medical over the next 10-15 years, due to all of the Baby Bo
    • I have taught undergrad courses in Research 1 US University. I also know the standards of college education in India. When you say apples to oranges, I agree because the Indian education system graduates far more competent graduates then here in US. In fact, some of my students (Seniors in University) could not do some simple algebra, that some of the school children do back in India. That is the reason for much of outsourcing as well.
  • by Colin Smith ( 2679 ) on Thursday April 05, 2007 @02:16PM (#18623975)
    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.

  • by PavementPizza ( 907876 ) on Thursday April 05, 2007 @02:21PM (#18624059)

    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.

    • by lucabrasi999 ( 585141 ) on Thursday April 05, 2007 @02:37PM (#18624361) Journal
      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.
      • I was going for funny, not insightful. Fake Steve Jobs is humor, with a hint of truth, as all the best humor has. The hint of truth here is about journalistic pliancy: that IBM can declare itself the zillion-ton gorilla of [insert field here], and the press, including Slashdot, will obediently run with the story. Same way they run with Microsoft's payola reports from Gartner for middle-management and treat them as gospel truth.
  • there's more to outsourcing than cheap labor,

    Perhaps, but if cheap labor was not the main factor, they would be growing outsourcing to Germany, Canada, etc.

    But outsourcing does offer them more choices. 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. However, this is still not good news for techies
    • Re: (Score:3, Insightful)

      by trongey ( 21550 )

      ...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.

  • Old news (Score:1, Insightful)

    by Anonymous Coward
    Last year, IBM reported over $18 billion in revenue [] from Software alone. Which is more total revenue than Oracle [], SAP [], and every other software company not named Microsoft earned last year. I'd say IBM already is great software company (or at least a large one).
  • IBM from the Inside (Score:5, Informative)

    by Hypharse ( 633766 ) on Thursday April 05, 2007 @02:57PM (#18624651)
    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.
    • by Dunbal ( 464142 )
      about the plants IBM opens there employing like 50,000 people in one plant.

      God, can you imagine the payroll? 82 loaves of bread, 20 gallons of milk, and a case of beans. Per month! Sigh, way too expensive.

      Seriously outsourcing is a "Good Thing" (on paper) for the host country, since they learn from all you foreigners and start charging more for their services after a surprisingly short time. Unfortunately the quality of product/service is nowhere near the same - a
    • by karvind ( 833059 )
      IBM issues more patents per year than most countries and they generate billions from those patents.

      True, but are they quality patents ? []

      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.

      IBM did a lot of work for Nintendo WII too.
  • Software company? (Score:1, Flamebait)

    by matt me ( 850665 )
    Can anyone name any software IBM produce? I don't think I use any.
    • Re: (Score:3, Informative)

      by C_Kode ( 102755 )
      DB2, Tivoli, Websphere, Lotus to name a few...
    • by edward350z ( 1084677 ) on Thursday April 05, 2007 @03:23PM (#18625051)
      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.
    • by thorkyl ( 739500 )
      Lotus Notes?
      Rational Rose - I use this one daily as a database developer
  • Did they grow up? (Score:3, Informative)

    by BluedemonX ( 198949 ) on Thursday April 05, 2007 @03:08PM (#18624823)
    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.
    • Re: (Score:1, Troll)

      by Dunbal ( 464142 )
      Glad to see the juvenile racist crap that we used to see spat at articles like this almost instantly seems to be gone.

      "Thank you, come again!"
  • I've been hearing since 2004 that IBM was going to buy Novell, which the rumor spread faster after Novell purchased SUSE and partnered with IBM and started co-branding some Linux training packages. The rumors took off again in 2006 at Brainshare where most of the signs around the conference were white and blue rather than the red and white that is typical of the host's branding colors. Looks like they missed out and MS swallowed their soul instead.
  • it seems that IBM has a credible strategy for becoming the next great software company

          And it belongs to the chairman of SCO, saying "by stealing other people's code, you bastaaaaaaaards!"

          But hey, if it worked for Microsoft... (ducking and running)
  • I work for a very large IBM business partner, and we use IBM products almost exclusively. Anything IBM has developed themselves is a piece of shit. IBM has done the following to us: Released software that would not work. After struggling with it for weeks they will finally admit it does not work. They constantly reintroduce bugs when they release new versions. The have no version control. They provide horrable customer support. Often it seems like we pay for the privilidge of reporting bugs to them.
    • by BCW2 ( 168187 )
      And that's different from Micro$oft how?
    • Is this code from IGS or an actual shipped product e.g. DB2, WAS, etc.?
      • This is shipped products. Specifically LMS (Learning Management System), Websphere (in the old days, better now), and Web Commerce Suite. Tivoli and Lotus products are much better, but the stuff IBM comes out with is crap.
  • I cant believe that so many people are ignorant of the range of software IBM does. IBM has entire vertical stack of software including compilers, os, virtual machines, databases, servers, java webserves. Incase you dont know it, it is said that IBM understands Java better than Sun. I am not sure if they have updated their vm', but as of Java 1.4, theirs was faster than Sun.

    If there is a industry for a major software product, IBM does it.
  • by Kid Zero ( 4866 )
    Anyone mention this one yet? :)

  • IBM, the last great software compant?

The unfacts, did we have them, are too imprecisely few to warrant our certitude.