Though it ranks as the second largest software business in the industry, IBM Software Group (SWG) is not sitting around on its laurels. The profit-driving division of IBM has been on a growth path for a long time, investing both organically and through acquisitions to build one of the most powerful software portfolios in the industry.
Though it ranks as the second largest software business in the industry, IBM Software Group (SWG) is not
sitting around on its laurels. This profit-driving division of IBM has been on
a growth path for a long time, investing both organically and through
acquisitions to build one of the most powerful software portfolios in the
Behemoth IBM is not going to sneak up on
anybody, but the systems giant has almost stealthily doubled its software
revenues in under a decade. The last time eWEEK took a good look at IBM,
SWG revenues were around $8 billion to $10 billion several years ago-last year
Big Blue's software revenue was $22 billion.
To remain competitive and drive new business opportunities in emerging and
growth markets, IBM has been transforming
its business with a keen focus on software and services. Indeed, over the last
decade, IBM has driven a significant
transformation of its business model as the company has shifted to higher value
areas, improved efficiencies of its business and invested strategically for
At $22 billion in revenue last year, IBM
SWG brought in more than 42 percent of IBM's
profits. Indeed, IBM Senior Vice President
and Group Executive Steve Mills, who runs IBM
SWG, said the company's software profits have actually tripled in the last
decade, driving more than $8 billion in profit in 2009.
This profit has enabled IBM to invest in
new areas like Smarter Planet for the instrumentation and monitoring of
physical assets, business analytics and data center transformation and cloud
computing, Big Blue officials said.
IBM's software capabilities also have
grown because the company has continually added to its base. Since 2000, IBM
has acquired more than 100 companies-more than 60 companies in software alone,
including Cognos, Filenet, Telelogic, Micromuse and MRO
Software. In the past few months IBM
acquired Guardium, a leader in data security software; Lombardi, which enables
us to boost our business integration capabilities; and Initiate, a provider of
data integrity software for the health care industry. And IBM
is the industry's top middleware producer, according to Forrester Research.
Darryl K. Taft covers the development tools and developer-related issues beat from his office in Baltimore. He has more than 10 years of experience in the business and is always looking for the next scoop. Taft is a member of the Association for Computing Machinery (ACM) and was named 'one of the most active middleware reporters in the world' by The Middleware Co. He also has his own card in the 'Who's Who in Enterprise Java' deck.