Whither Rationals Heterogeneous Strategy
?"> So at the heart of this will be Rationals modeling technology? The low-level design and code-generation steps feeding into the testing processes, finally onto deployment, and then theres the ongoing update and maintenance of the application. So the lifecycle continues out through time. Its a series of steps, and all of the technologies that are part of the Rational portfolio are integral to achieving that end-to-end lifecycle. And then when you add in the other IBM technologies that sit around the Rational portfolio in terms of the business process modeling capabilities we have as part of the WebSphere platform, and the whole area of monitoring and systems management, we continue to widen out the capability for application development in all of those dimensions.Customers are looking for ways in which to build applications more rapidly but also ensure that the applications are comprehensive, they match the business needs, theyll perform and scale over time, theyre manageable. So a lot of building blocks go into a complete application lifecycle development environment.When you look at the portfolio of technology Rational brought to us, combined with the existing IBM portfolio, its the most complete end-to-end product development lifecycle toolset in the market. Well, your competitors are playing off of doubt that you will stick to the heterogeneous strategy that Rational had as an independent companylike supporting Microsoft [Corp.s] and BEA [Systems Inc.s] technologies. Well, were going to continue to support multiplatform and multiarchitecture where the architectural specifications are published and available to us. The support of BEA is done through the support of [Java 2 Platform, Enterprise Edition]. And support of Microsoft is done through the APIs that they publish. So as long as the interfaces are published, we can support them. We can support multiple relational databases and of course multiple hardware platforms. That is the strategy our entire software is grounded ona heterogeneous strategy. There are many customers that use the WebSphere application development environment to build applications that run on BEA WebLogic. Obviously we manage any platform, any infrastructure through the Tivoli tools. We very much so have an any-to-any type of model, and its reflected in the amount of revenues we receive today from the myriad platforms that we support. So were certainly not planning on downsizing our business. What, to date, has Rational contributed to IBMs bottom line? Well, you know the company we bought when we bought it. We dont then break out division-level results. So you look at Rational at the time of purchase, with some $700 million of total revenue, for simplicitys sake. And the business grew last year. So this is a good acquisition, in terms of what it brought to us, in terms of Rational, but also, leveraging that, we get around the Rational portfolio and its contribution to helping us grow the rest of the portfolio. Customers see it as a complete solution. What has customer reaction been like? The existing Rational customers and the existing IBM customers ? Extremely positive. In fact, we have several customer references. There are lots and lots of Rational customers, and I think what you would hear back from them is that their relationship around the Rational product set has been enhanced by the IBM acquisition. Theyve gotten everything they were getting before, and more. How have you mutually benefited from Rationals field expertise and their guys from yours? The Rational team clearly brings the in-depth knowledge of what the programmer community has to deal with to design and build applications. We obviously had people at IBM with similar backgrounds and experience. Rational brings a lot more of that resource to IBM, particularly in the field, than we have had recently. So it gave us a big boost in our sales force and go-to-market capability. The IBM side obviously brings deep knowledge of the runtime execution environments, transaction processing and system optimization skills. And from a broad market perspective, the Rational team is very deep into manufacturing and engineering companies, aerospace and Department of Defense areas. The IBM teams have better entree and relationships with banks, insurance companies and retailers. So the commingling of skills and contacts in these areas has been very powerful. The Rational team has some great relationships in U.S. federal and DoD and aerospace companies, and thats helped open doors for members of the commercial IBM team and vice versa as it pertains to some of the commercial accounts the IBM team had much deeper coverage in. So its been very complementary. And IBMs coverage in Asia and in different parts of Europe was superior to that of Rational, so thats been helpful to open more doors for selling Rational tools. Weve been a phenomenal steward of the businesses weve acquired. Our reputation is excellent in the marketplace. IBM acquiring a company had been additive to customer experience, not subtractive. First of all, the Rational capability is second to none. So the idea of businesses that have built their development environments around the Rational tools going elsewhere makes no sense to them from a technology perspective or a retraining perspective. And IBM makes very long commitments to the technologies we deliver and the customers we support. Next page: Where Rational fits into on-demand computing, vertical markets and Global Services.