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By eweek  |  Posted 2004-07-19 Print this article Print

I can see where the IT customers would be happy about it, but what about the scientific and technical companies? That was my biggest concern when we announced this because a lot of our biggest customers are in the scientific and engineering area. And they were the customers I called first on the day of the announcement, and their initial reaction was quite positive. And one of the guys, the head of one of the top 100 companies in the U.S. that had been one of our largest customers, told me, "Oh, good, wed always wanted to keep two or three tools vendors in here even though Rational was our largest, just because we werent sure how well youd do in the market. But now that youre part of IBM well just standardize on you guys. Because we know were going be here 10 years from now. So, even those guys, the business guys at the senior levels, were very positive.
What about those at the lower levels?
At the technical level they look at the product. The first questions they asked were things like are you going to continue to support ClearCase on Solaris, which youd expect now that were part of IBM—theyd have questions about that. As soon as we reassured them on those issues they were all very supportive. In fact what we were able to do is show them that as part of IBM we were able to increase our investment in the whole tools space. So its not that IBM just acquired Rational and spent $2.1 billion or whatever. IBM, when you look at the investment level in terms of our product development and you look at whats going on in IBM Research—because there was a lot of technology in Research that didnt have a way to get to market, but now with Rational that technology is appearing in our tools releases. Theres some really cool technology in a number of areas from Research that were bringing to market. So thats what the technical guys like. And IBM is spending more on tools than anybody else in the world. I think were spending more on tools than most of the revenues of all our competitors in the tools space. Its pretty amazing the total R&D muscle that we have. That I think is exciting for the technical guys. OK, weve talked about product integration, but what of the cultural integration? Ive known Rational for a while and from my perspective Rationals culture and IBMs culture seemed to be pretty distinct. Well, there were differences and there were similarities. The core parts of the Rational culture were focused on customer success as the top-level objective and the traditional things around integrity and a very team-oriented environment. So IBM drove this culture and defining core values initiative that they called a Culture Jam this year where they had all the employees involved. And having 300,000 people involved in defining what the core values are you might think is a little messy but this was actually very successful. And I talk to Sam Palmisano [IBMs CEO] about it, and he said the Rational people commented more than any other group. And if you look at the IBM three core values, they actually map to Rational core values. No. 1 is client success, which exactly maps to Rationals customer success. No. 2 is innovation that matters to our customers and to the world. And Rational has always been a technology leader. And the last one is around trust and building a high trust environment. And all of our relations with each other and with our customers and business partners are based on trust. So those core values map very well with Rationals, and I think the cultural integration from that standpoint has been very effective. The part that that youre probably referring to is Rational as a small company was very quick with a lot of empowerment to the frontline team, whereas IBM is a much larger organization and one might say its a little more control-oriented. And that sometimes has been an issue. But the good news is that where weve seen something you might view as high overhead or bureaucratic weve been able to go to Steve Mills or Sam Palmisano and fix those. There were examples that, because IBM was used to doing larger deals, added overhead to some of our deals. And we were able to go to Steve and get support so we were able to streamline those processes. So I think IBM is benefiting in a way that we hadnt anticipated and the Rational team is able to drive some changes in the business processes that make IBM a better company from that point. So obviously there are differences between a big company and a small company, and that does affect some people. But overall the core cultural items and our customer success are consistent. Next Page: How acquisition affected Rationals momentum.


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