What IBM really thinks about the cloud

Steve Mills, who recently became head of all IBM products, gives his frank opinion about cloud computing and HP's new cloud initiative

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Mills: One of the things we've been busy doing for years is identifying the companies that are the service providers to the industries twe sell to and making sure that we're going to where the buying is taking place. A company would say to us: "Well, IBM, we're no longer running that in-house, we're not running HR applications, so go sell your computers and your capability to Hewitt. We're not doing benefits, we're not running 401(k) plans, we've pushed all that out -- Fidelity, Hewitt, other third-party insurance companies that we work with. You have to sell it to them, not to us. We're not buying computing for that."

So we've got to go to where the puck is going. I get these weird sort of semi-statements, semi-questions from a variety of people who want to say -- well, how are you going to compete in the future if everything is done on Google? The real world doesn't work that way.

Knorr: So a lot of what cloud delivers is what has been delivered before, but optimization of business processes is as difficult as it ever was.

Mills: Yeah. It's always been the hard part, right? The technology has gotten easier and easier, reconciling governance and process is hard.

Knorr: What do you think about HP's entry into the cloud?

Mills: We're going to have to watch and see what HP is going to do here. What I'm watching is HP's entry into software. HP was actually a big software producer in the '80s and into the very beginning of the '90s, and then Lew Platt actually began to move HP out of high-value technologies into commodities. And then Carly [Fiorina] moved them further into more high-volume, commodity-oriented stuff.

They bought many, many software companies over the years, and people are not looking at what's going on at HP in terms of the dozens and dozens of software companies that have been purchased going back to 1993. They've been doing lots of purchases, but they haven't done anything with their software assets. They haven't really built their software business per se.

So we'll see what Leo [Apotheker] does and what he is able to do, and obviously they have a lot to do around their culture, their capacity, their ability to execute a software business strategy that's not hardwired to a hardware or a service business strategy. Just as we've done -- we don't hardwire the IBM company together. It's a loose coupling, and we need to be able to bring things together for certain clients, but also take them apart and do things one by one.

And, by the way, the same client behaves in every dimension imaginable. They buy big transformation things, they want the whole IBM company, but then at 2 o'clock in the afternoon they just want to buy a box. At 5 o'clock they want to talk about some software pieces. It's all over the place; every major company is a scatter of different buying behaviors. The ability to roll with that and adapt to that, become capable of dealing with all of it -- it's very hard. It takes a lot of years of practice to get the organization lined up around those kinds of things. So time will tell.

I don't know exactly what [HP is] really talking about. They bought Opsware from Marc Andreessen and the Opsware product is a very weak offering in the marketplace today. So I don't know what they're going to do around cloud. Obviously, people that run clouds buy boxes, so I think HP sort of starts with the idea that -- well, people buy HP hardware and therefore we're in the cloud business. And I guess that's true.

Knorr: You mean you can grandfather anything you like into the cloud?

Mills: The cloud is a particular deployment model, right? A shared deployment model. And we know HP has sold lots of boxes to lots of people who run shared deployment models, so if that's the definition, then HP is in the cloud. But then again, everybody's in the cloud. We're in Los Vegas, we're all Elvis.

Knorr: One last question. If you could boil down the core value proposition of what IBM is offering these days to one word, would it be "integration"?

Mills: Well, I think on one side there's an integration play, and on the other side there's an optimization play. I think of integration more in terms of process of flow and effectiveness of end-to-end execution. And I think of optimization as all the analysis of understanding -- do I have clarity and visibility to what's happening? And that's more where the analytic stuff goes into. So I like to use the "I" word and the "O" word.

This article, "What IBM really thinks about the cloud," originally appeared at InfoWorld.com. Read more of Eric Knorr's Modernizing IT blog, and for the latest business technology news, follow InfoWorld on Twitter.

This story, "What IBM really thinks about the cloud" was originally published by InfoWorld.

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