On the Web
>In software, where perception can be key, Gerstner's IBM has proved adept.
An industry shift such as that presented by the Internet could prove to be daunting
to no less an industry hand than Bill Gates; plenty of people expected industry
newcomer Gerstner to fail here. But IBM met the challenge and fashioned a new
image at the same time. There were marketing missteps, too. IBM did not shine
at the Olympic Games in Atlanta. Still, Lotus' Domino campaign, Deep Blue vs.
Kasparov (one of the defining "Internet events"), the company's introduction
of a WebSphere product line, its innovative alphaWorks site -- these and other
moves help depict a company transformed.
AlphaWorks deserves special attention. The World Wide Web site has evolved over
the last two years from a platform to show off new technologies to a testing
ground for technologies developed by engineers from throughout the corporation.
"Our challenge is to change the way IBM does new product development,"
said John Wolpert, emerging technology development manager in the alphaWorks
unit based in San Jose, Calif. "We are always looking at emerging technologies.
We're trying to find the next big technology." The unit includes engineers
and researchers who joined from a variety of IBM units as well as from nearby
Sun Microsystems Inc. The group "has a passionate interest in technology.
We understand the technology," said Wolpert. "If we don't have the
right people in IBM, we send briefs to high-level, distinguished engineers."
Proposals for the site are submitted from IBM developers and researchers to
the alphaWorks unit, which decides what technologies are posted. Once a technology
is on the site, it is available to all IBM groups for comment, suggestions and
opinions. The technology can be changed several times based on that input. "We
can bring early adopters directly into the earliest phase of development,"
added Wolpert. The technology on the site is also available to IBM product groups
to use in new and existing products. "Our job is to drive people to the
site," Wolpert said.
Since the technology testing operation was started early this year, technologies
first made available through alphaWorks have been incorporated into the IBM
WebSphere and Bean Machine offerings. And at the XML '98 conference held last
month in Chicago, IBM unveiled nine new XML tools that will be distributed without
charge through the alphaWorks site. Early on, the technology focus of the unit
is Java (or pervasive computing, as some in IBM now call it), XML and multimedia
The alphaWorks site was created two years ago at the direction of John Patrick,
IBM vice president of Internet technology. "The idea was to get a new site
on the Web to show off new IBM technologies. We built a cool Web site that brought
us a new community of users. Now we're trying to gain mindshare within IBM,"
Today, the alphaWorks unit is a corporate business unit in the Software Solutions
Group, and is charged with becoming an integral part of the IBM software development
process. The group is housed in IBM's Java development facilities and is run
as a new business. "We have to turn everything around quickly," Wolpert
said Mills said the alphaWorks unit must still work to establish itself within
IBM. "I'm not sure where it will go. It's been a fun thing, a learning
thing. It's getting good data and good feedback, and there have already been
some successes -- Java and the Bean Machine," he said.
Mills somewhat dismisses the notion that IBM should ever be considered less
"cool" than other software companies. "We have lots of people
with ponytails," he quipped. Has there been some smoke and mirrors in IBM's
"Internet revival"? Perhaps. Web server strategy, like language and
object component strategies, has been a moving target. OS/2 was quickly rolled
out as an Internet operating system (remember 'Warp'?) in the early Gerstner
days, and almost as quickly rolled back. The network computer is still the impetus
for an IBM press conference or two -- but it is really more just a replacement
strategy for aging terminals and dusty, one-note PCs.
Overall, the company has come to be known as more flexible, surprisingly so
for such a large entity. If it has been unafraid to embrace standards, it has
also been willing to jettison standards that ebb. Witness the move to quickly
demote Netscape's Web server. Witness not a wasted moment in endorsing the popular
Big Blue momentum
To continue its momentum, IBM will need to continue to play the role of a giant
that is nimble of foot. The Java alliance with Sun will be tested over time.
While the recent rebranding of middleware offerings may make sense on paper,
it will have to be effectively sold in the field.
Long-time IBM watcher Sam Albert gives good marks to the new IBM. Albert, president
of Sam Albert Associates, Scarsdale, N.Y., says of Gerstner: "This guy
has been an amazing turnaround artist. He has made IBM customer-centric and
Continued Albert: "He decided not to break up the company [as he was urged
to do]. He's very carefully focused on keeping the breadth. With him, it's not
about 'reads, feeds and speeds' [read: 'technology']. It's about solutions for
business problems." Gerstner has deftly managed software, hardware and
services sales integration, noted Albert.
And the man who claims coinage of the term "co-opitition'' gives Gerstner
the highest grades as a practitioner of that art form. "He cooperates with
Microsoft, yet he can compete with them. He competes with Sun, yet he can cooperate
with them," he said. IBM, Albert cautions, must continue to execute.
Reaching similar conclusions on Gerstner's performance -- while taking a slightly
different tact -- is Max Watson, chairman, president and CEO of BMC Software,
Houston. Like Albert, and so many other figures in the industry, Watson worked
at IBM. "IBM's getting better at what it does. He got costs under control,"
Watson said of Gerstner. "He's done an incredible job in five years."
Watson continued: "The next five years will be more difficult. I like my
job better than his job.
"I was at IBM for 14 years," said Watson. "In my opinion, the
great problem is that they became internally focused. People worried about their
own job." The resulting in-house competition can become counterproductive.
Cliques form what Watson refers to as "the IBM Mafia." Gerstner still
faces these organizational obstacles.
Amid the daily barrage of news from IBM are missives that show the prowess of
the firm. IBM continues to acquire. In October, the firm bought Internet workbench
software from Wallop Software, incorporating that promising package into its
growing WebSphere Studio line (and in turn licensing it to another Web company
in which it has invested, NetObjects). In November, the company proposed UMI
(an XML-like format for repository meta data) with Oracle and Unisys. Also in
November, IBM announced that the U.S. Census Bureau would use IBM's SSA-based
7133 Serial Disk Systems in the operation of the Bureau's American Fact Finder
Internet-based database. Such a wedding of large-scale processing and the Internet
seems characteristic of "the New IBM." Its recent growth spurts will
be challenged, however. Financial analysts warily note that Gerstner and other
insiders have recently unloaded some stock. But clearly, the company that had
a hand in the 1896 census (via its forerunner, Hollerith's Tabulating Machine
Co.), is headed into another century in good order.
This special report includes reporting by Jennifer Lancione, George Lawton and
Jack Vaughan is former Editor-at-Large at Application Development Trends magazine.
Mike Bucken is former Editor-in-Chief of Application Development Trends magazine.