After handing the reins of IBMs developer business to the Rational division, Steve Mills, IBMs senior vice president in charge of the companys Software Group, says he sees nothing but good from the move. In an interview with eWEEKs Darryl K. Taft, Mills talks about the tools space and the integration of Rational into IBM, and he opens up about his ideas on open-sourcing Java and the need for Office alternatives.
What was the reason behind buying Rational in the first place?
We had had a partnership with Rational for many years. With Rational being the premier provider of design tools and integration platform and test tools in the marketplace, our application development tools and Rationals tools had been made complementary to each other years ago, and we were doing a great deal of joint marketing and joint selling as two separate companies.
And things reached a point—as I looked at the kinds of applications customers were trying to build, and the need for deeper connection to IBM middleware technology, more focus on building end-to-end process-integrating applications—that I felt that it was important for us to become one company, and therefore be able to work together without boundary on building the capability for these kinds of sophisticated, connected, end-to-end, process-flow style of applications.
So, if the conditions of the market motivated the purchase, obviously the basic capability always motivated the partnership.
Would you say that it has paid off?
Oh, tremendously. We look at it on a near-term basis, Rational becoming part of IBM, we brought Rational back to growing in the marketplace. The previous two years, Rational had been struggling with growth in the market. We had double-digit growth with Rational software last year, and the Rational business grew at double digit.
This was a very powerful acquisition, I think, from the perspective of near-term marketplace success. And from a strategic standpoint, it reinforced over and over again that bringing together the Rational tools with the IBM tools, and focusing on a more complete solution, was going to be valuable to customers long–term.
I am very happy with the Rational acquisition. It was a great buy.
I know I was at at least one event where you said this was the best or smoothest IBM Software acquisition to date. Why do you say that?
The reason why this has worked so well is the relationship weve had with Rational has been very longstanding, and we all knew each other. So were not getting to know each other after the acquisition. And the Rational culture is very much aligned with the IBM culture.
Theres a great combination of technology as well as culture.
Whats the status of the integration?
Well, certainly on the business side we moved very quickly. Literally on the day we closed, we immediately moved to integrate. We have a fairly elaborate buddy system to link Rational people up with IBMers.
We were bringing in over 3,000 people into the software group, so it was a relatively large acquisition. We were able to complete the integration work within six months. We began winding down the specialized integration team in the August/September timeframe and everythings been operating quite well. So everythings been going extremely well from the standpoint of the integration of the business. Then on the product side, weve been aligning the portfolios.
I transferred the WebSphere application development environment mission and Lee Nackman, who was leading that, along with Lees team, over to Mike Devlin. Weve incorporated new technologies out of Research into the Rational portfolio. Weve strengthened the linkage of the Rational design tools to the WebSphere infrastructure as well as into our industry patterns work that were doing. Weve made a lot of progress in a relatively short period of time.
I expected it to go well. I had a lot of faith and trust in Mike Devlin. I think hes a great leader and certainly understands the software business inside and out. And he built a great company in Rational.
What kind of further integration can we look for?
Well, we have work to do every year. What were trying to achieve is, weve got an environment in which the design environment, the XDE environment, can drive out an ever larger percent of executable code. The customers would love to go from design through the coding steps very quickly and on into test. [b>Editors Note: Rationals XDE technology was formerly known as the Extended Development Environment.]
That requires that the tools be aware of the pattern of business youre trying to implement and the runtime environment that youre targeting the execution to. So we have more things to add into XDE as a design tool in order to further speed up the development process and increase customer efficiency.
Part of our plan is also to get more linkage on the management and monitoring side so that when the applications are being built we can set them up to be monitored and managed more effectively at time of deployment.
So you begin to think of application lifecycle as being broader than just the development process, but also the complete lifecycle of the application in production. And so were driving more linkages not just into the WebSphere infrastructure but also with the Tivoli monitoring and management tools.
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 company—like 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 on—a 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.
Fitting in With IBMs
Strategies”> How does Rational play into IBMs on-demand strategy?
The definition of on demand is a business whose processes are integrated from end to end, connecting customers, employees and suppliers, and being able to adapt dynamically to marketplace changes and take advantage of opportunities or respond to threat. That definition is focused on business integration and business process integration.
And the Rational tools are the premier development environment for developing applications that span a company. They instantiate not only a process; [they] cant help providing linkage across processes. So the sophistication of the environment matches the characteristics of the on-demand world that we believe were moving into.
And we see the Rational tools as a very integral part of that strategy. We put a great deal of value on Rational. We made Rational one of our major brands. We moved development work into Rational to use it as the focal point for our application development tool, application design initiative. So we see it as a key asset as we try to meet the needs of businesses as they try to become on demand.
How does Rational play into IBMs vertical market push?
First of all, all of our customers sit within industries. So the need to apply technology toward industry needs is fundamental to more effectively serve the customer. Rational tools help us to create design patterns, instantiate those designs, reuse the designs. Clearly there are elements of application design that are shared across industry, and there are many application designs that are industry-unique.
It was their model of go-to-market. The Rational team had an industry focus as well.
How is Rational working with or benefiting IBM Global Services?
Well, there was already a relationship with Global Services prior to the acquisition. The Global Services practitioners have been using Rationals tools over the years. The acquisition of Rational obviously makes it more economical for Global Services to outfit itself with Rational tools.
As always with people out there practicing in the market, its more than just giving them a tool, particularly this class of tool; you have to train them on how to use the tools. And weve been doing that over the last year. And in various engagements weve had Rational-skilled people working with Global Services as part of project teams as a way to provide skills transfer.
You touched on something there when you said “this class of tool.” Is there an effort to simplify the Rational tool set?
Well, theres always an effort to try to simplify things, but not to de-function or degrade. Were constantly investing in new features and new capability. Theres no lack in customer demand for more sophistication, not less sophistication. But along the way you have the phenomenon of making the technology more accessible and easier to utilize.
So youre applying techniques that abstract the interfaces, simplify the paradigm of use and try to make the tools more intuitive. So, no loss of sophistication, but try to make the tools a more intuitive environment, and thats an on-going thing.
We have lots of long-term plans for delivering ease-of-use, ease-of-training; “ease of” characteristics into the Rational portfolio.
Would you say IBM is as far along as, or maybe even ahead of, other companies in the quest to simplify Java? BEA and Sun are after this goal.
Well, Ive yet to meet a customer who wants less function or less scalability. So you have to put the notion of simplification in the context of other requirements they have.
We build technology that is designed to meet the needs of those that are trying to build sophisticated applications. And those require sophisticated tools. You cant build that class of application using something like a Microsoft Visual Basic.
So theres a need for sophisticated technologies in the market, and the challenge is how do you make them easier to use while still satisfying the final needs of the application. At the end of the day, if the tool is simple, but the application doesnt work right for the business, it doesnt matter. Youve wasted your time and money buying a simple tool that cant build what you need.
Delayed Yukon, Whidbey
Do you see any opportunities in the fact that Microsofts next-generation tooling and database technology has been pushed back again?
Well, I think any time you have a competitor that is promising things and then delays them, you have an effect upon customers who have expectations to get the technology. Microsoft has a long history of promising and not delivering. For many people at this point they listen to all these promises of delivery, and theyre really not paying a lot of attention. Theyll look at it when it finally arrives. I dont think the market is waiting for Microsoft on anything.
Were still waiting for Cairo. And were waiting for Yukon and Whidbey and Longhorn and Indigo, and, and, and … the list goes on and on. These things will come when they come. I dont see customers pausing or stopping to make decisions because Microsoft is delaying deliveries. Theyll see what the technology does when it arrives.
When it goes on and on you sort of wonder why… They must think that the world is waiting for them to do something. Its like the anticipated release of the next blockbuster movie and people are lined up around the block in sleeping bags waiting to by their tickets. I dont think it works that way.
Its a technique that Microsoft uses. They must think that its a good technique. I have different views, I dont operate that way. Usually when things finally arrive from them its something thats not exactly what they originally promised. When youre announcing things three years in advance, do you really know what its going to be three years in advance?
How serious is IBM about open-source Java, given the open letter Rod Smith sent to Sun?
The question is how serious is Sun about it? Because we dont control Java. Sun controls the definition of Java and also the right of anybody to declare what theyre delivering as being Java. They own the trademark. So all certification and all trademarking of Java is owned by Sun. Any code that went into open source would not be called Java unless Sun certified it.
And there are restrictions around what one can do with code that comes from Sun as part of the Java [Community] Process. So our suggestion to Sun is that there are other ways to pursue the Java development process and Java management process that could be beneficial to expanding the market for Java. In that we have suggested to Sun before and we continue to suggest to Sun that they look at alternate ways to manage Java in the marketplace, in conjunction with the industry, to encourage its further expansion.
The open letter back to Sun was in direct response to the article in which Simon Phipps was quoted suggesting that if IBM thought there was something important here they should open-source Java technology. That statement doesnt make any sense. We dont have the right to open-source Java technology.
Well, what he suggested was that IBM open-source its clean-room implementation of Java.
I dont have such a thing. These things can be created, but, by the way, you cant call them Java. You could write something … Microsoft has C#, which looks a lot like Java, not identical, but certainly looks a lot like Java, and its not called Java. Microsoft was in a big [brou•ha•ha] with Sun for a while on their J++ offering, and there was a big debate over whether or not it deserved the Java trademark. And that was obviously litigated.
The dialogue in my opinion is not a bad thing. Our perspective is that Java has been enormously successful, and in looking at whats next for Java, I think it could be beneficial to rethink the Java process and the Java Community Process and look at how a more common, open industry standards process could be followed around Java, maintain consistency, and continue to extend the environment and encourage more adoption. Thats my perspective on this.
Sun spends a great deal of money managing and administering the process today. I think they could benefit financially from seeking a new process. Theres no question in anybodys mind here that the origin of this was Sun. They continue to be deserving of attribution. But that seems to me to be a different issue than how do you get Java more widely adopted in the market.
I also cover Web services, and IBM and Microsoft had been pretty much in lockstep on various standards. But recently it looks like you havent been. Are you going in different directions?
No, I dont think so. Our agreements to work together were never predicated upon a perpetual relationship. We came together because we wanted to encourage adoption around these XML-based structures that we refer to as Web services. And we felt there were areas of common interest that we can move on very quickly. A
At the same time were different companies, and our interests are not 100 percent aligned. Were going to do things separately as well as together. A good deal of progress has been made, and a lot of the structures have been laid. If you watch the pattern, weve brought others into the effort. Theres a lot of vetting that goes on through the workshops that we hold. And weve been pushing these standards toward more traditional standards bodies once we get some structure around them.
Both of us feel that things become truly standardized when the companies that have interest in that particular standard actually translate the specifications into code and push the code samples out the door as the initial instantiation of that particular structure. Now, standards efforts that are not backed up by code typically dont go very far.
Backing Out of Office
Is there an effort or a movement away from Microsoft Office within IBM, or within the Software Group?
You know were constantly looking at ways to make computing more efficient for our customers. Our business is driven by customer cost of ownership. And when we can reduce cost of ownership, there are benefits to be had.
The issue of Office is a fairly complicated one. We have IBMers, people inside our company, that dont use Microsoft Office. We have some people who are using lightweight editors, and obviously some people are playing with OpenOffice and various other tools. And were always looking at what models of computing are going to be important for the future that help customers do things more economically.
We think that the lighter-weight clients, server-managed clients that were doing around our Workplace and portal offerings, can offer real economic advantage to customers. And thats entirely independent of whether or not theyre using Windows or not using Windows. And in many cases, using Office or not using Office.
One of the big problems we see customers having today is theyre spending huge amounts of money on labor on managing thick, heavy clients. And there are areas that we have a lot of investment in and a lot more investment going in to look at how we can improve customer cost of ownership around the client.
So its not an operating system-specific effort. Were not trying to move the whole world to Linux clients. We have a lot of IBMers on Windows clients; we have some that are starting to use Windows clients and playing around with that as another option. We see customers showing interest in Linux clients, but the overwhelming majority of the market is Windows clients today, and theyll be Windows clients tomorrow.
A whole lot of confusion is swirling around this topic. And I think its less about the software packages you run and more about the design of the client environment and the way you run your application. And there are thousands of businesses out there that are shifting to portal-style models, which I would view as server-managed and server-controlled. And our view is its time to change that, because its just too expensive.
Thats what I mean: whether internally there was a movement to do maybe a pilot to move off of Office?
Well, were trying to portalize everybody inside the IBM company and have them operate inside of a portal environment. We have a lot of IBMers who dont need Office. We have a set of lightweight editors that are part of the WebSphere portal offering today, and you dont need Office. You can use the editors. So, yeah, were looking at other alternatives. We dont think its a one-size-fits-all world.