With its acquisition last week of its long-time business partner, Candle, IBM believes it is taking an important step in moving its collection of On Demand strategies forward. Company officials believe Candle's assortment of systems management and monitoring capabilities for both mainframes and distributed platforms, including Windows and Linux, can strengthen its competitive stance against archrival Computer Associates International.
Architect of the deal Steve Mills, senior vice president and group executive for IBM's Software Group, talked with Ed Scannell about the deal and the impact it figures to have on a number of IBM's technical strategies that are all connected to its On Demand initiative.
Q: What does the Candle acquisition give you that you could not build yourself?
Mills: There is always the, "we could build it ourselves." We have lots of programmers and lots of capability, but life is short. When you look at make vs. buy, you look at the capabilities a company has created, their customer set, their skills set, and so if the price is right, an acquisition can be a very leveragable thing to do. As you know this is number 33 for me over the past decade so we have done this over and over again in our software business and we found we can get incredible leverage out of them. Candle is an 800-person company so it doesn't have the market reach we do. Besides mainframe technologies they now have an extensive collection of distributed monitoring technologies for WebSphere, Web servers, and MQSeries. So we can get a lot of leverage out of that.
Q: What is the most immediate benefit to your On Demand set of strategies?
Mills: One of the biggest customer pain points is systems management and systems monitoring. When you start to get higher availability, you need to monitor what is taking place, and you want to take corrective action. These things are becoming more real time, more on the fly correction all the time. So you need a lot of monitoring tools and mechanisms that essentially bring back all that information so you can then take action on it. Candle adds a lot of that capability, but we will continue to develop and invent more instrumentation that gives us more information about what is happening inside of these products. The idea here is, if you have enough information, then you can take corrective information on the fly. If I know more accurately what is wrong with an engine, then maybe I can take corrective action to make that engine run right again.
Q: Does this acquisition help you further with your renewed focus on business intelligence?
Mills: Not directly. This is more in the systems management administration and tuning space. Databases have to be tuned too, so the tuning part of putting up a data warehouse is an important aspect of that. We will clearly get benefit in our database initiatives, but this is not a front-and-center thing for databases from a technology standpoint.
Q: And your content management strategies benefit here by association with databases?
Mills: If you draw an imaginary line, at the bottom you have all the infrastructure, instrumentation and management, on top of that you have all the run-time services that have to be instrumented and managed. This (deal) gives us more stuff at the bottom. But I wouldn't want to state that this is explicitly targeted at content management or BI, but more anything that runs databases, transaction monitors, apps servers, and operating systems. All that stuff that is the run-time layer, you have to instrument it, monitor it, analyze the data, and then those patterns become the basis on which you script on-the-fly remediation. The environment then becomes more self-correcting and then the vision of On Demand becomes more fulfilled. The world is built a brick at a time.
Q: Does this signal a greater emphasis on your mainframe software strategy?
Mills: Well we have been investing pretty heavily in mainframe tools and this clearly adds to that. One of the big appeals for us here was to add additional mainframe systems management function. But it is important to recognize that there is a lot more to Candle than just the mainframes pieces.
Q: What is their level of expertise with Linux?
Mills: I would characterize their level of expertise with Linux as more subsystems than Unix operating systems-based. If you looked at their expertise you would say they are very deep in MVS skills and deep in mainframe subsystems. In the workstation area, they are very deep in the subsystem arena, but not necessarily as deep in the operating systems arena. Now they have to have skills to build these products, so it is merely a statement of what sorts of things do they monitor. It is not about monitoring the Unix OS, it is about monitoring everything running on the Unix operating system. Now are these things extendable beyond where they are? Absolutely. I buy companies where I can see the extensibility of the technology they have. We think we can take this portfolio a lot further.
Q: What is one example of where you can take this portfolio one step further?
Mills: We could do a better job with them around workflow monitoring and business activity monitoring. We can put more automation into the correction capabilities. They have been mostly focused on how to monitor and surface information as opposed to how do you script out corrective action on the fly to do system fixes. So more tie-ins with the things we are doing at the services level area and in the provisioning area.
Q: Does the acquisition affect the strategy you have in place with Rational Systems?
Mills: No, because this is very much in the systems management space. There will be times when some of these tools will get used by developers. As they build an application, they might want to use some of these tools for monitoring and testing up front. So there are some things that overlap into the systems management space but they are complimentary because these are things Rational has not invested in. For instance, we are getting synergy today between Tivoli and Rational. This [Candle deal] is helping fill in monitoring holes that existed in the Rational portfolio.
Q: So Tivioli will manage the integration of Candle's products into IBM's overall strategy?
Mills: Right. This will be under Robert LeBlanc. Robert's mission is systems management, and that is the part of the portfolio he manages and drives and that is where this technology fits in best.
Q: How long before all things are smoothly melded with IBM's stuff? Six months, 12 months, longer?
Mills: We tend to move on things like this very fast. Once we get government approval and close it, we will immediately align the resources and will integrate right away.
Q: Are you anticipating layoffs at Candle?
Mills: As far as I am concerned we are in midst of adding developers, sales people, and marketing people. Those are all critical skills to us and so we intend to make full use of the resources that are there. As always you have to go through the general administrative staffs and look at what is required and see who is needed in those areas. But they have great development skills and strong customer relationships. So we plan to keep all that.
Q: What is the overlap of their 3,000 customer base with yours?
Mills: Their whole business is around monitoring things that IBM makes, so they are 100 percent aligned with us in terms of customer set. What is incremental here is, they do not touch all of the IBM customers so with a market reach across 160 countries and with our relationships on a global basis, we believe we can take the Candle portfolio and sell a lot more of it among a lot more customers around the world.