B2Bs Success Will Develop Over Long Haul

IBM's Bill Paulk expects major benefits to come after a lengthy evolution.

The lingering questions of business-to-business software and services are constantly on the mind of Bill Paulk, vice president of e-markets for IBM, based in Atlanta. Paulk, a 25-year IBM veteran, sat down with eWeek News Editor Scot Petersen to discuss the problems of B2B and how and when theyll be solved.

eWeek: Where are we heading?

Paulk: The move toward private from public exchanges is what we are seeing, and 80 percent-plus of our business opportunities and our engagements today are around the private exchanges. B2B is not so much about getting an application up and running; its about integration, a massive test of complex multienterprise, multiapplication and multiplatform integration, and thats where the complexity comes from. The opportunity is there, and well make results over time, but it will take time because of the complexity associated with [B2B]. To some degree, analysts and the press have been pretty harsh on B2B as an industry segment because there were unrealistic expectations that it would be working in 12 months. And thats just not going to be the case. This is going to be a long-term evolution.

eWeek: Is there a time when B2B will fully mature?

Paulk: To some degree, I do agree [that it will]. You took some shots at Commerce One [Corp.] and Ariba [Inc.] and i2 [Technologies Corp.], and they deserve it—we all deserve it, IBM included, to some degree. But these guys are pioneers, and their strength is they understand the business opportunity and how to apply the technology. They made mistakes, and their ability to learn from their mistakes and correct them and have the staying power will be the real test.

eWeek: When are we going to see the future?

Paulk: Does B2B technology, based on open standards, have the capability of creating truly substantial changes in industry structures? Yes. When you look at technology acceptance curves, from electricity to the internal combustion engines, that curve tends to be 20 to 40 years. Our view is, we are getting an idea of what some of the barriers are to B2B, and ... I think it will take 10-plus years to see B2B fully embraced and massively proliferated, when it becomes a standard way of doing business.

eWeek: Do you think that length of time will negatively impact the corporate impatience to get B2B systems up and running?

Paulk: CEOs buy vision, but they buy vision only in the sense that vision gives you a context about what is possible. You have to believe that as you build incrementally that there isnt just a cumulative effect but a synergistic effect. CEOs are most focused on asset optimization and optimizing relationships with the clients and keeping up with a fast-paced world in which you have to produce products far faster and manage the impact of that.

So what, then, are the solutions that will impact that? It will be supply chain, customer relationship management, procurement, business intelligence, product design and management, all of which will be interwoven to some degree. No client is going to spend the money to build all of that stuff and wait five to 10 years for the big-bang payoff.

What they want is that vision and have that decomposed into a set of application capabilities that can be installed in six-month increments for which there are six-month paybacks. So you pay as you go, and then the return you get is on each one of those implementations, but if this is a properly architected set of solutions, those applications become synergistic, and the effect then is far greater than one plus one.

eWeek: Do you think single vendors will be able to supply a complete B2B infrastructure or will it be all ad hoc, where IBM gets involved only in piecing together various parts?

Paulk: I think its the latter. From an IBM perspective, when we look at [providing] value to clients, we ask, what does it take to create a solution? And clearly the application provider, say Commerce One, i2 and Ariba, they look at the business process and optimize the application to reflect that business process. Thats an absolutely fundamental part of the equation. But that is only one small piece of [success]. Creating a solution requires an aggregation of competencies: knowledge, consulting, building strategy, priorities. Then it becomes the ability to build a business case. And theres a need for enabling middleware that facilitates all that. It also takes integration services.

eWeek: Can you update us on IBMs relationship with i2 and Ariba?

Paulk: There was a lot of concern about the disintegration of the alliance. We chose them because they were the best in the industry ... we had a good sense of the direction that both of them were going in, and it was absolutely clear that there would be conflict. And we accepted that because if these guys had been passive and were not trying to grow, they wouldnt have been good partners to begin with. Quite frankly, it all benefits the customer because it creates options.

eWeek: But if theres conflict and choice, how does the IT manager negotiate that choice?

Paulk: Theres no silver bullet to that one. It comes down to who best matches the requirements. Sometimes, its price. IBMs strategy is an assembler strategy. Our view is that no one vendor can handle all of the requirements [of B2B]. Some [customers] would opt for a preintegrated solution, whether that be [from] Oracle [Corp.] or SAP [AG]. And we would support those. Others want to support best of breed, and we support that. We do not have an agnostic strategy. We do have a select number of key suppliers. There has to be considerable preintegration of those suppliers.