How IBM Adds Value

By Peter Galli  |  Posted 2005-08-21 Print this article Print

for Customers"> For his part, Handy said that IBM is the largest supplier of services on Microsoft Windows, and is one of the largest resellers of HP and Sun Microsystems Inc. equipment, "because in the end we do what the customer wants us to do. Solving their problems … is where the value creation lies in the relationship," he said. Read more here about IBMs rocky relationship with Sun.
But Handy acknowledged that there are other industries and groups that IBMs solution sets do not yet cover, saying that those would come later.
"We are getting more aggressive about open source, as there is an energy around it and we want to tap that energy and have it drive the acceleration of open standards that create an open environment where our solutions become applicable to a wider number of customers," he said. IBM is in the business of providing value on top of open standards, including industry-specific standards, and is aware that the line will creep and that it has to keep providing the value the customers are paying for, he said. Asked if this was not much the same strategy as the one Microsoft Corp. of Redmond, Wash., is adopting, Handy said Microsofts strategy is more of a product alignment and a focus on product-specific bundles for an industry, whereas IBMs approach is to identify a customer or industry pain point and then put together a solution that solves that problem. To read more about Microsofts vertical plans, click here. Jean Bozman, an analyst with International Data Corp. in San Mateo, Calif., said the IBM move was also significant in that it indicates that many open-source applications are now deeply embedded in customer infrastructures. IBMs Handy termed this a "valid point," saying, "As soon as we shifted to an open-standards-based strategy, that allowed others to have compatible products to those standards, which is why customers like them. We do have to recognize these other implementations of standards." Bozman said, "The customer is clearly in the driving seat and increasingly wants certain open-source components as part of their solution stack. IBM is responding to that and is trying to embrace a wider set of customers by including more open-source technologies and processes in its own solution stacks and across the multiple hardware platforms it supports. "While IBMs own proprietary products still remain a very important component of those solution stacks, it is now clearly showing its willingness to include other technologies if these help address customer problems. I dont see this as being disruptive to them selling their own middleware and hardware; in fact, it might be beneficial [as it may help in] growing the customer base," she said. Handy agreed that customers are not just interested in software, but are looking for a total solution, which was the rationale for IBMs industry-aligned move. "We found that IBM was already doing this solutions work as part of its On Demand work, creating industry-specific solutions. So the decision was made to make Linux an integral part of all those solutions; and this resulted in the reorganization of the Linux team around this business, but not before we tested this out for six months by aligning and challenging some staff to sell this model," he said. Check out eWEEK.coms for the latest open-source news, reviews and analysis.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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