Mills Says IBM Will Mine UCC Market

By Clint Boulton  |  Posted 2008-03-11

Mills Says IBM Will Mine UCC Market

SOMERS, N.Y.- As the leader of IBM's $20 billion software business, Steve Mills, senior vice president of the company's software group, has his hands in a lot of software pies. Perhaps none is as hot right now as IBM's unified communications and collaboration strategy, an technological mashup that involves sprucing up traditional instant messaging applications, such as IBM Lotus Sametime, with voice over IP, video conferencing and even social networking tools.

The point of UCC is to blast through the classically walled gardens of collaboration and communications tools to improve productivity. Mills sat down with eWEEK's Clint Boulton on March 10 after a media event at the company's offices here to discuss IBM's UCC efforts, which includes a $1 billion investment over the next three years.

I saw you launch IBM's information-on-demand strategy in New York a little over two years ago, where you positioned that software market as the next big software growth opportunity. Is unified communications and collaboration the next big software market for IBM?

It's certainly one of the growth strategies. When you're a $20 billion software business, it's not going to be about one thing, but about multiple things. Across the five major units that are part of our software business, this is clearly one of those major themes. It sits in a context. The customers want unified communications in an ever broadening context of collaboration and information access.

What do you see as the killer app for UCC, five or 10 years out?

Instant messaging in and of itself is a killer app, much the way one might view e-mail as one of the killer apps on the Web. Everyone is Web connected if for no other reason than e-mail. Behind that is general access to information. Inside the firewall, Web applications are now commonplace in business.

Lots of companies have taken that environment and just overlaid Sametime on top of it. I think people will continue to layer more and more information-centric services on that. Sametime is the fastest path for us to get to near real-time communication.

Will acquisitions be part of the $1 billion you're investing in UCC over the next few years? What kind of holes are you looking to fill?

Acquisitions are a clear part of our strategy overall. Virtually everything we're doing has room for some set of acquisitions based on the make-buy decision we go through to decide what it is we're going to add to our portfolio. We have a lot of things in the portfolio today.

Generally, what we are looking at are adjunct elements that enhance the overall solution. The basic Sametime capability came to us via acquisition [Databeam and Ubique in 1998] and then we built up the capability from there. There's a lot in the portfolio.

I would say that for the most part what you'll likely see are small company acquisitions, adding incremental feature sets, incremental data access capability. We need to integrate with lots of products, and sometimes there are third-party providers that have interesting integration technologies that can be useful. It's hard to answer explicitly.

Frankly, we have more capability today in the portfolio for unified communications than users are able to take advantage of. We're still in the early adopter stage as far as getting into more sophisticated scenarios.

IBM vs. Microsoft in UCC

Can you outline the differences in the ways IBM and Microsoft are approaching UCC?

At this point, you see Microsoft obviously enabling the world as they define it, which is Windows-centric environment. They will talk about how they can enable a connection from a mobile device into Windows servers to get at information. Certainly, their core ideas are combining instant messaging, short message capability, IP connection-all of those things are inherent in what they are trying to do with the market.

So in simple terms you'd see a lot of similarity [between IBM and Microsoft]. The differentiation comes in the breadth of connectivity that we offer. We're focused on a broad definition of information access, meaning all of the information within the enterprise or beyond the enterprise if the customer deems it appropriate to gain access to.

We're very focused on scalability and we're very focused on reliability. Our approach is to take a carrier-grade model here to our carrier partners, to our network equipment provider partners and to the enterprises themselves. This is going to be the way in which their people do business.

So, you'd see a very stark contrast between Microsoft's focus on basic device enablement and accessibility versus the broader perspective that IBM is taking associated with this in-context set of collaboration, any application, anywhere, on any server, any data anywhere and the high degree of scalability and reliability we enable through the server-side function.

The depth of server capability is a very stark differentiator between what Microsoft and IBM are doing. You might see things that look similar on the glass but what's happening behind the glass is dramatically different.

To follow that up, IBM and Microsoft share a common UCC partner in Nortel. What is the distinction between IBM's relationship with Nortel and Microsoft's relationship with Nortel? Is there a tug of war going on between IBM and Microsoft over Nortel?

No. They need to serve a broad base of customers. Our market presence in large businesses in particular is substantial. We have a greater share in large business for collaboration, e-mail, those kinds of things that Microsoft does. So, a partnership with IBM is a value to them.

I'm not taking away from the fact that they can have a relationship with Microsoft because, as a network equipment provider, they need to work with lots of companies. We don't make announcements around exclusivity. I think the original Microsoft-Nortel announcement went out with a lot of fanfare, and to some extent created a lot of confusion that this was a proprietary relationship.

I'm not sure what was intended in the press release; I didn't write it. But I know the way the press was writing about it, and it drifted toward this "there's something special happening here." Then we make an announcement with Nortel, and everyone's surprised. "Gee, I thought Nortel was Microsoft's partner." The real world doesn't work that way.

Speaking of partners, IBM has a strong relationship with Google on the cloud computing front. Do you have any plans to work with Google on UCC, perhaps to offer some sort of hosted, cloud-based UCC offering?

No, not specifically. Are we open to OEM arrangements? Sure, that's part of our model. We're not averse to Google offering services to customers in the space. It's an area we see as synergistic with other things they do. We'll have to see where they want to go. It's really their model, not our model.

But putting our model, our capability on other peoples' backbones? Absolutely. This is imminently attractive to telco carriers. Today, telco carriers are in the e-mail business. There's no reason why they can't get into the unified communications business. By definition, they're going to be part of every infrastructure. It's just a matter of who puts their label on the capability.

Does the customer perceive this is something they have to buy to enable, or does somebody put it on their delivery platform and provide connectivity service to it, and then the function is there and I as the customer pay an added fee to utilize that function?

For some of [our] customers, especially as you move down market, that can be a very attractive offering. When you get into larger businesses, there are concerns about privacy and security. Those start to become very paramount. They may be less likely to turn to a platform provider for that type of service but things will evolve.

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