IBM plans to unify its software brands

When Sam Palmisano was first appointed CEO of systems giant IBM in the spring of 2002, he re-assured staff and customers that there would be no dramatic strategic shifts. "We've got the strategy nailed, we [just] need to fine-tune some things," he said.

First in line for fine-tuning is IBM Software. Palmisano's big idea is to introduce tighter integration between IBM Software's flagship software packages, making it easier for the company to sell multiple packages of software to customers.

"We know from independent research that this is how clients buy software – as 'solutions' rather than individual products," says Maurizio Carli, IBM's


Company name: IBM

HQ: Armonk, New York

Main activity: Hardware, software and services

Last full year revenues: $85.9 billion (of which software accounted for $12.9 billion)

Last full year net income: $7.7 billion

Key issue: IBM has unified its four main software products into a single brand. While the move looks good on paper, IBM will face a number of stumbling blocks to convince users it is technically sound and more than a superficial marketing message.



vice president for software for Europe, the Middle East and Africa (EMEA).

The idea is that users will be able to use WebSphere to process customer transactions, for example. That transaction data will then be stored in IBM's DB2 database. The Tivoli systems management tool will ensure that the customer-facing applications perform to requirements and, finally, knowledge workers will finally be able to share information about these transactions using the Lotus Domino collaboration tool.

Employees will also be able to interact with different aspects of the underlying software infrastructure using the WebSphere portal server application.

That, at least, is the high-level theory. But why, after so many years of operating its software unit in such a decentralised manner has IBM chosen to align them all into a single division?

Carli says that a more integrated product will be more efficient for both IBM and end-users, who will be able to integrate their business processes horizontally across IBM's applications more easily, rather than having to build and map business processes for each individual enterprise application.

Major customers such as car maker DaimlerChrysler and Finnish telecoms equipment company Nokia are already looking into integrating aspects of the IBM software suite in this way, he adds.

Unifying the underlying programming environment is key to the plan. IBM has historically offered individual programming tools for DB2, WebSphere, Tivoli, Lotus and other major software products.

The plan now is that developers should be able to access all these applications via a single user interface. This ease of use and portability will help IBM gain market share over competitors such as Microsoft and Sun Microsystems. "The battle to win in ebusiness software is the battle for the hearts and minds of developers," he says.

In truth, Palmisano is simply articulating a strategy started when he was still chief operating officer. For example, in November 2001 IBM began integrating its Lotus collaboration tool with the WebSphere application server platform.

One of the prime motivators for IBM is financial. The move to integrate these products will help it cut costs, particularly in sales where a unified team can sell all four products.

Furthermore, it will be easier for these sales people to up-sell and cross-sell individual software products.

But a major challenge for IBM will be to train its sales people to ditch their tribal allegiance to one particular product in favour of a broader, cross-product view, as well as making sure they have the knowledge to be able to sell all four products.

Furthermore, its horizontal integration pitch may give users the impression that they risk being locked in to using all IBM software.

According to Lauren Flaherty, vice president of data management at the company, IBM's motives are nowhere near as cynical. "Before we were just islands of culture and orientation – now it's much more customer-focused."

But first IBM will need to ensure that its products deliver the kind of integration that users are crying out for.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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