Talking to one of IBM’s top strategists

[podtech content=http://media1.podtech.net/media/2007/07/PID_011951/Podtech_IBM_Ventures.flv&postURL=http://www.podtech.net/home/3635/meeting-ibm-ventures &totalTime=3335000&breadcrumb=f85ae6e9e4b84d9e8e835b6b0f49f5dd]

The world’s biggest technology company. No, it’s not Microsoft. It’s still IBM.

And my first IBM interview starts with Drew Clark, co-founder of IBM Venture Capital and one of IBM’s top strategists.

We spend an hour together talking about a range of things. Not just IBM stuff either. It’s Drew Clark unedited.

I have the best job in the world. I get to have conversations with interesting people like Drew and I get paid for it.

Thank you to Seagate for sponsoring my show, which enables me to do stuff like this (congrats on reporting good financial results, too).

I’ll bet a lot of people at Microsoft watch this video…

Oh, this guy is damn smart. We talk about everything from Eclipse to Nuclear Power and a bunch of things in between.

Comments

  1. Robert, I really liked your idea of walmart execs being able to monitor the aisles using mashups. I can see silicon valley thriving for a long time to come. Technology is alive and well :)

  2. Robert, I really liked your idea of walmart execs being able to monitor the aisles using mashups. I can see silicon valley thriving for a long time to come. Technology is alive and well :)

  3. Out of curiousity, how are you defining “World’s Largest Software Company”?

    Is IBM the world’s largest software company or just the largest company that has a division that produces commercial software?

    By what measure?
    Number of total employees?
    Total sales of software they develop in house?
    By unit? By commercial value? Retail only? Counting “funny money” transactions used to close hardware and consulting sales? Are you counting the value of consulting contracts as software sales?

    I’m really curious how you’re measuring it since Mitsubishi, Fujitsu and many other conglomerates sell software they develop. How does IBM compare to them?

    Some facts would be really nice rather than just hyperbole.

  4. Out of curiousity, how are you defining “World’s Largest Software Company”?

    Is IBM the world’s largest software company or just the largest company that has a division that produces commercial software?

    By what measure?
    Number of total employees?
    Total sales of software they develop in house?
    By unit? By commercial value? Retail only? Counting “funny money” transactions used to close hardware and consulting sales? Are you counting the value of consulting contracts as software sales?

    I’m really curious how you’re measuring it since Mitsubishi, Fujitsu and many other conglomerates sell software they develop. How does IBM compare to them?

    Some facts would be really nice rather than just hyperbole.

  5. IBM did $4.8b in software *revenues* while MSFT did $3b in *profits* (on $13.4b in revenues).

  6. IBM did $4.8b in software *revenues* while MSFT did $3b in *profits* (on $13.4b in revenues).

  7. Nice discussion. Always interesting to hear the Enterprise view on Web 2.0 – when i spoke with some enterprise companies about some of this stuff a while back they had a *totally* different view from most of us in the Web 2.0 world.

    AlphaWorks is very cool – haven’t checked that for a while but after Drew’s mention of it i checked it out again. Will need to go back more often!

    The emerging markets, culture etc stuff is interesting – like to hear more on that…

  8. Nice discussion. Always interesting to hear the Enterprise view on Web 2.0 – when i spoke with some enterprise companies about some of this stuff a while back they had a *totally* different view from most of us in the Web 2.0 world.

    AlphaWorks is very cool – haven’t checked that for a while but after Drew’s mention of it i checked it out again. Will need to go back more often!

    The emerging markets, culture etc stuff is interesting – like to hear more on that…

  9. Biggest as in “ego” ? Or biggest as in “willingness to burn bridges to ensure OpenXML doesn’t get a yes vote at ISO” ? Maybe it’s “biggest mistakes made in software history” or “biggest workforce”. Biggest brand ? Hint: some detail would be good :^)

    Personally I think somebody in your position needs to be a little more careful than others when it comes to throwing around the hyperbole. Once you get to the top of the stack you’re held to a higher standard and you should deliver it or step down.

  10. Biggest as in “ego” ? Or biggest as in “willingness to burn bridges to ensure OpenXML doesn’t get a yes vote at ISO” ? Maybe it’s “biggest mistakes made in software history” or “biggest workforce”. Biggest brand ? Hint: some detail would be good :^)

    Personally I think somebody in your position needs to be a little more careful than others when it comes to throwing around the hyperbole. Once you get to the top of the stack you’re held to a higher standard and you should deliver it or step down.

  11. Mike, it’s just Scoble saying the first thing that comes to mind. You get used to it after a while

  12. Mike, it’s just Scoble saying the first thing that comes to mind. You get used to it after a while

  13. I can’t watch this video from work, but you bet I will watch it when I get back from Montreal.

    Did you talk to him about Metronome?

    http://www.research.ibm.com/

    Open up IBM with a tour of the research lab like you did with Singularity at Microsoft. Singularity may have been a pointless project, but at least we got to see what they were working on.

    Ask him if he can use his access pass to get you backstage over there at the Research facility with your camcorder.

  14. I can’t watch this video from work, but you bet I will watch it when I get back from Montreal.

    Did you talk to him about Metronome?

    http://www.research.ibm.com/

    Open up IBM with a tour of the research lab like you did with Singularity at Microsoft. Singularity may have been a pointless project, but at least we got to see what they were working on.

    Ask him if he can use his access pass to get you backstage over there at the Research facility with your camcorder.

  15. “By what measure?
    Number of total employees?”

    All you have to do is compare public fiscal reports to see that IBM is much larger than Microsoft.

    We do the exact same thing as IBM and work with some of their customers. Though we charge a LOT less money than IBM does and provide roughly the same quality in North America.
    I look up to IBM because they are much better at making money the right way, unlike Microsoft.

  16. “By what measure?
    Number of total employees?”

    All you have to do is compare public fiscal reports to see that IBM is much larger than Microsoft.

    We do the exact same thing as IBM and work with some of their customers. Though we charge a LOT less money than IBM does and provide roughly the same quality in North America.
    I look up to IBM because they are much better at making money the right way, unlike Microsoft.

  17. We do the exact same thing as IBM and work with some of their customers. Though we charge a LOT less money than IBM does and provide roughly the same quality in North America.
    I look up to IBM because they are much better at making money the right way, unlike Microsoft.

    Comment by Chris — July 21, 2007 @ 4:19 am

    Interesting, defending the IBM white coats?,and they know how to make money the right way? what company do you work for so at least I have an idea what moral high ground you think big buisness works from.

  18. We do the exact same thing as IBM and work with some of their customers. Though we charge a LOT less money than IBM does and provide roughly the same quality in North America.
    I look up to IBM because they are much better at making money the right way, unlike Microsoft.

    Comment by Chris — July 21, 2007 @ 4:19 am

    Interesting, defending the IBM white coats?,and they know how to make money the right way? what company do you work for so at least I have an idea what moral high ground you think big buisness works from.

  19. “Interesting, defending the IBM white coats?”

    Those IBM white coats gave us more free AS IN FREEDOM stuff, than Microsoft, borland, Adobe, and most other software companies combined.

    http://www.fsf.org/free-software-award-2006
    IBM’s Ted Ts’o won this year’s FSF grand award for Free software for kernel devlopment.

    http://ws.apache.org/

    See all these apache web services, including Tomcat?
    Guess where they came from?
    IBM.
    Tomcat is basically a community edition of websphere.
    But they also have a free version of websphere branded as well.
    Eclipse is a fully featured GUI development environment for Linux, all contributed by IBM, all for free.

    http://www.research.ibm.com/WearableComputing/linuxwatch/linuxwatch.html
    IBM has done some of the most ground breaking work in the last 8 years as far as free software. Here their research labs put Linux into a wrist watch with bluetooth. And this was back in 2000.

    IBM sells software accounts, like us, where they use Free Software to provide business solutions to problems. To me that’s selling software legitimately. Selling millions of copies of buggy software at a sick price when it took you pennies on the dollar to create it based on market bullying is not my idea of legitimate.
    IBM makes a lot of money, but they work honestly for it.

  20. “Interesting, defending the IBM white coats?”

    Those IBM white coats gave us more free AS IN FREEDOM stuff, than Microsoft, borland, Adobe, and most other software companies combined.

    http://www.fsf.org/free-software-award-2006
    IBM’s Ted Ts’o won this year’s FSF grand award for Free software for kernel devlopment.

    http://ws.apache.org/

    See all these apache web services, including Tomcat?
    Guess where they came from?
    IBM.
    Tomcat is basically a community edition of websphere.
    But they also have a free version of websphere branded as well.
    Eclipse is a fully featured GUI development environment for Linux, all contributed by IBM, all for free.

    http://www.research.ibm.com/WearableComputing/linuxwatch/linuxwatch.html
    IBM has done some of the most ground breaking work in the last 8 years as far as free software. Here their research labs put Linux into a wrist watch with bluetooth. And this was back in 2000.

    IBM sells software accounts, like us, where they use Free Software to provide business solutions to problems. To me that’s selling software legitimately. Selling millions of copies of buggy software at a sick price when it took you pennies on the dollar to create it based on market bullying is not my idea of legitimate.
    IBM makes a lot of money, but they work honestly for it.

  21. Color me impressed that anyone that high up at IBM spoke with you.

    I can understand a lot of Valley companies desperate for publicity, but, a main-stream, old-world company like IBM; that’s cool stuff.

  22. Color me impressed that anyone that high up at IBM spoke with you.

    I can understand a lot of Valley companies desperate for publicity, but, a main-stream, old-world company like IBM; that’s cool stuff.

  23. There is absolutely no way that IBM is a bigger software company than Microsoft. IBM, by revenue, by employees, by almost every metric is a larger company, but not a larger *software* company. IBM is not a software company; IBM is no longer a hardware company either with their sale to Lenovo.

    IBM is a services company. IBM Global Services (or IGS in the industry) is huge. It’s a big beast. It makes Microsoft Consulting Services (MCS) look like a chihuahua to their saint bernard.

    IBM made this switch in focus in the late 90′s and has since never looked back. They don’t want to compete with Dell, Gateway, etc to build PCs anymore, and they certainly don’t care too much about their enterprise software, except as a channel to get more consulting services.

    Full disclosure: I work for a Microsoft Gold Certified Partner.

  24. There is absolutely no way that IBM is a bigger software company than Microsoft. IBM, by revenue, by employees, by almost every metric is a larger company, but not a larger *software* company. IBM is not a software company; IBM is no longer a hardware company either with their sale to Lenovo.

    IBM is a services company. IBM Global Services (or IGS in the industry) is huge. It’s a big beast. It makes Microsoft Consulting Services (MCS) look like a chihuahua to their saint bernard.

    IBM made this switch in focus in the late 90′s and has since never looked back. They don’t want to compete with Dell, Gateway, etc to build PCs anymore, and they certainly don’t care too much about their enterprise software, except as a channel to get more consulting services.

    Full disclosure: I work for a Microsoft Gold Certified Partner.

  25. “Color me impressed that anyone that high up at IBM spoke with you.”

    If he keeps going like this, his blog would be *MUCH* better, and way more credible. He needs to stop posting BS and start interviewing more people at IBM, Sun, Cannonical and even the FSF.

    These people have real value.

  26. “Color me impressed that anyone that high up at IBM spoke with you.”

    If he keeps going like this, his blog would be *MUCH* better, and way more credible. He needs to stop posting BS and start interviewing more people at IBM, Sun, Cannonical and even the FSF.

    These people have real value.

  27. “You just gave me a great idea, I’m going to go introduce Twitter to the retail guys”

    This is a good example of someone being swept up in Twitter-hype IMO. What does Twitter add here that didn’t already exist? Why not just have the retail system update an RSS feed, or send out IM’s or text messages? Why would a company want to send their data through Twitter?

  28. “You just gave me a great idea, I’m going to go introduce Twitter to the retail guys”

    This is a good example of someone being swept up in Twitter-hype IMO. What does Twitter add here that didn’t already exist? Why not just have the retail system update an RSS feed, or send out IM’s or text messages? Why would a company want to send their data through Twitter?

  29. Robert, it would be interesting if you could let us give you potential questions to the people you interview before you actually interview them. Andy, from Marketing Pilgrim, does that before doing is Podcast. It would be another level of interaction adding the value of answering what people want to hear.

  30. Robert, it would be interesting if you could let us give you potential questions to the people you interview before you actually interview them. Andy, from Marketing Pilgrim, does that before doing is Podcast. It would be another level of interaction adding the value of answering what people want to hear.

  31. And as far as the market is concerned IBM has a 1/3 the market cap, even apple has a bigger market cap than IBM :)

  32. And as far as the market is concerned IBM has a 1/3 the market cap, even apple has a bigger market cap than IBM :)

  33. Brian: >What does Twitter add here that didn’t already exist?

    A combined Web/RSS/SMS stream that’s already built for you. Plus one that has a robust identity system and a good API and an ecosystem of apps and search engines built on top of it.

    You sound like a Microsoft engineer: “I could build me one of those in a week.” Sigh.

  34. Brian: >What does Twitter add here that didn’t already exist?

    A combined Web/RSS/SMS stream that’s already built for you. Plus one that has a robust identity system and a good API and an ecosystem of apps and search engines built on top of it.

    You sound like a Microsoft engineer: “I could build me one of those in a week.” Sigh.

  35. “I have the best job in the world. I get to have conversations with interesting people like Drew and I get paid for it.”

    It’s just too bad you haven’t found a methodology to connect all of those readers to the interviewers. Imagine the collaboration value that could be created.

  36. “I have the best job in the world. I get to have conversations with interesting people like Drew and I get paid for it.”

    It’s just too bad you haven’t found a methodology to connect all of those readers to the interviewers. Imagine the collaboration value that could be created.

  37. While I can always do more it is disingenuous to say there is no connection made here. The methodology is you ask a question here and I will get it answered.

  38. While I can always do more it is disingenuous to say there is no connection made here. The methodology is you ask a question here and I will get it answered.

  39. So many errors, so little time (the commenters I mean, this time at least).

    It’s hardly hype to compare Microsoft and IBM, definitely more correct to say “technology company” than “software company”, although if you are measuring the amount of work done at IBM pertaining to software (whether it is profitable or not) I don’t think it outrageous at all to consider IBM as the larger of the two. (Consider all the consultants out there who are writing user-specific software for their clients.)

    Software has never been a PRIMARY aspect of IBM’s business model, a distinction Gates wanted to make when he named his company. As Microsoft goes into making mice, video game consoles, providing web services and the consulting business (as they were claiming a year ago) the name “Microsoft” will be as hard to apply to what the company does as the name “International Business Machines” was to that company (I think “IBM” now officially stands for nothing).

    To the comment that IBM selling off Lenovo constituted exiting the hardware business: Go get a book on the history of computing. IBM has been in and out of the PC business more than once. They used to make clocks, typewriters, copiers, and they still do make mainframe computers and fab chips, including the guts of the XBox 360.

    IBM is a MUCH more agile company than Microsoft, especially when you consider how long they have been around. Their business doesn’t depend on “superstars” such as Gates or Ballmer. Since most of their products are for business use, not consumerism, the average person, including apparently the average techie who reads this blog, isn’t aware of all that they have contributed to how we lead our lives today.

    Did I mention that they bankrolled the invention of the PC, and, errm, the founding of Microsoft?

  40. So many errors, so little time (the commenters I mean, this time at least).

    It’s hardly hype to compare Microsoft and IBM, definitely more correct to say “technology company” than “software company”, although if you are measuring the amount of work done at IBM pertaining to software (whether it is profitable or not) I don’t think it outrageous at all to consider IBM as the larger of the two. (Consider all the consultants out there who are writing user-specific software for their clients.)

    Software has never been a PRIMARY aspect of IBM’s business model, a distinction Gates wanted to make when he named his company. As Microsoft goes into making mice, video game consoles, providing web services and the consulting business (as they were claiming a year ago) the name “Microsoft” will be as hard to apply to what the company does as the name “International Business Machines” was to that company (I think “IBM” now officially stands for nothing).

    To the comment that IBM selling off Lenovo constituted exiting the hardware business: Go get a book on the history of computing. IBM has been in and out of the PC business more than once. They used to make clocks, typewriters, copiers, and they still do make mainframe computers and fab chips, including the guts of the XBox 360.

    IBM is a MUCH more agile company than Microsoft, especially when you consider how long they have been around. Their business doesn’t depend on “superstars” such as Gates or Ballmer. Since most of their products are for business use, not consumerism, the average person, including apparently the average techie who reads this blog, isn’t aware of all that they have contributed to how we lead our lives today.

    Did I mention that they bankrolled the invention of the PC, and, errm, the founding of Microsoft?

  41. I’ve worked with IBM consultants before. I’ll leave it at that. I’m sure anyobody else who has done the same will have a sour smirk on their face as well.

  42. I’ve worked with IBM consultants before. I’ll leave it at that. I’m sure anyobody else who has done the same will have a sour smirk on their face as well.

  43. Hey I didn’t say they did GOOD work, just a lot of it.

    The blame should be shared by most companies in the consulting business. A lot of “Gee whiz” applications ideas turn into death-march projects and companies like IBM are called in only after in-house resources have exhausted themselves. But the REAL blame often lies with the customer for not adequately spec-ing the project to begin with.

    I rather doubt IBM is as good at this game as they once were, but then I’m not sure most of the other companies in the business are either. The industry threw out detailed project planning a long time ago in favor of JAD/RAD techniques and now we are living with the results.

    A consultants approach is very simple: “I’ll bid on this project on a fixed price basis if you let me do the whole think MY WAY, or I’ll do it using your methodologies on an hourly basis. Guess which route most customers take?”

    Preaching to a potential customer that their basic assumptions are wrong is a thankless job, and it doesn’t pay very well.

  44. Hey I didn’t say they did GOOD work, just a lot of it.

    The blame should be shared by most companies in the consulting business. A lot of “Gee whiz” applications ideas turn into death-march projects and companies like IBM are called in only after in-house resources have exhausted themselves. But the REAL blame often lies with the customer for not adequately spec-ing the project to begin with.

    I rather doubt IBM is as good at this game as they once were, but then I’m not sure most of the other companies in the business are either. The industry threw out detailed project planning a long time ago in favor of JAD/RAD techniques and now we are living with the results.

    A consultants approach is very simple: “I’ll bid on this project on a fixed price basis if you let me do the whole think MY WAY, or I’ll do it using your methodologies on an hourly basis. Guess which route most customers take?”

    Preaching to a potential customer that their basic assumptions are wrong is a thankless job, and it doesn’t pay very well.

  45. IBM must be doing something right over the last few quarters, check out the stock price. Cell technologies, patent donations, open source community participation, as well as running the IT backbone of most fortune 500 companies, state and federal governments create lots of revenue opportunity. It would be nice to see IBM support free unlimited online storage, a open search platform and free domestic wifi initiatives.

  46. IBM must be doing something right over the last few quarters, check out the stock price. Cell technologies, patent donations, open source community participation, as well as running the IT backbone of most fortune 500 companies, state and federal governments create lots of revenue opportunity. It would be nice to see IBM support free unlimited online storage, a open search platform and free domestic wifi initiatives.

  47. [...] Talking to one of IBM’s top strategists « Scobleizer And my first IBM interview starts with Drew Clark, co-founder of IBM Venture Capital and one of IBM’s top strategists. (tags: ibm strategy drewclark) Tags: [...]

  48. >> What does Twitter add here that didn’t already
    >> exist?

    > A combined Web/RSS/SMS stream that’s already
    > built for you. Plus one that has a robust identity
    > system and a good API and an ecosystem of apps and
    > search engines built on top of it.

    I was referring specifically to a scenario involving a company publishing private internal information. Simply providing an RSS stream is sufficient – you can get web and sms from that easily. The apps and search engines would provide little value for the “retail publishing sales info” scenario. I think you just gave me a knee-jerk pitch for Twitter in general. Robust identity??? I don’t think so.

    The API may be decent, but I doubt companies will trust their sensitive private info to the Twitter network. I also don’t think they’ll want to be a the mercy of Twitter’s downtime, system update outtages and delays in getting messages.

    I’d actually love to be proven wrong – care to list companies using Twitter for their private info?

    > You sound like a Microsoft engineer: “I could
    > build me one of those in a week.” Sigh.

    Ouch – that’s *really* hitting below the belt with the Microsoft engineer crack! You’re missing the point, it’s not, “I could build it in a week”, it’s “I could assemble the pieces in half a day – they already exist.

  49. >> What does Twitter add here that didn’t already
    >> exist?

    > A combined Web/RSS/SMS stream that’s already
    > built for you. Plus one that has a robust identity
    > system and a good API and an ecosystem of apps and
    > search engines built on top of it.

    I was referring specifically to a scenario involving a company publishing private internal information. Simply providing an RSS stream is sufficient – you can get web and sms from that easily. The apps and search engines would provide little value for the “retail publishing sales info” scenario. I think you just gave me a knee-jerk pitch for Twitter in general. Robust identity??? I don’t think so.

    The API may be decent, but I doubt companies will trust their sensitive private info to the Twitter network. I also don’t think they’ll want to be a the mercy of Twitter’s downtime, system update outtages and delays in getting messages.

    I’d actually love to be proven wrong – care to list companies using Twitter for their private info?

    > You sound like a Microsoft engineer: “I could
    > build me one of those in a week.” Sigh.

    Ouch – that’s *really* hitting below the belt with the Microsoft engineer crack! You’re missing the point, it’s not, “I could build it in a week”, it’s “I could assemble the pieces in half a day – they already exist.

  50. @23 “A combined Web/RSS/SMS stream that’s already built for you. Plus one that has a robust identity system and a good API and an ecosystem of apps and search engines built on top of it.”

    And you sound like a nerd simply infatuated with bright shiny objects without any clue how they could be put to any real business use or what the risks of doing so are. Clearly you’ve never worked in any sort of enterprise environment (no, MS doesn’t count.) and lack the understanding of the risks IT orgs have to consider. (and, no, 30 minute interviews with random CIO’s wanting to sell their product doesn’t qualify you either)

    Brian is asking the exact questions every IT manager asks when considering a new technology. You, on the other hand think that because every nerd in SV uses some technology, it must be good for everyone.

  51. >I’d actually love to be proven wrong – care to list companies using Twitter for their private info?

    Again you’re missing the point. It’s too early to note its “official” use by corporates.

    But, then, back in 1977 we’d be having the same argument about Apple IIs, wouldn’t we?

    And you would have missed the forest for the tree.

    Twitter will be used by corporates. In about two years.

  52. @23 “A combined Web/RSS/SMS stream that’s already built for you. Plus one that has a robust identity system and a good API and an ecosystem of apps and search engines built on top of it.”

    And you sound like a nerd simply infatuated with bright shiny objects without any clue how they could be put to any real business use or what the risks of doing so are. Clearly you’ve never worked in any sort of enterprise environment (no, MS doesn’t count.) and lack the understanding of the risks IT orgs have to consider. (and, no, 30 minute interviews with random CIO’s wanting to sell their product doesn’t qualify you either)

    Brian is asking the exact questions every IT manager asks when considering a new technology. You, on the other hand think that because every nerd in SV uses some technology, it must be good for everyone.

  53. >I’d actually love to be proven wrong – care to list companies using Twitter for their private info?

    Again you’re missing the point. It’s too early to note its “official” use by corporates.

    But, then, back in 1977 we’d be having the same argument about Apple IIs, wouldn’t we?

    And you would have missed the forest for the tree.

    Twitter will be used by corporates. In about two years.

  54. @35 So you are saying in two years Twitter will be completely secure,and scalable, and companies will feel safe about SOX compliance with its use? So this is on Twitter’s roadmap? Are they planning a version that can be run inside a corporate firewall? Are they planning a version that can interoperate with any directory? Hell, they care barely scale to satisfy their current user base.

  55. @35 So you are saying in two years Twitter will be completely secure,and scalable, and companies will feel safe about SOX compliance with its use? So this is on Twitter’s roadmap? Are they planning a version that can be run inside a corporate firewall? Are they planning a version that can interoperate with any directory? Hell, they care barely scale to satisfy their current user base.

  56. Robert, I can see we’re only going to be able to settle this with a bet. So, I’ll bet you lunch that no company will use Twitter for “reporting on real-time retail sales transactions” before July 22, 2009.

    I just put a note in my PDA – hopefully this thread will still be in the archive by then :)

  57. Robert, I can see we’re only going to be able to settle this with a bet. So, I’ll bet you lunch that no company will use Twitter for “reporting on real-time retail sales transactions” before July 22, 2009.

    I just put a note in my PDA – hopefully this thread will still be in the archive by then :)

  58. Heheh. I’ll bet with you on that, but one thing, the loser donates the winnings to the winner’s choice of major charities. Something like Breast Cancer Research (my choice).

  59. Heheh. I’ll bet with you on that, but one thing, the loser donates the winnings to the winner’s choice of major charities. Something like Breast Cancer Research (my choice).