Where is IBM?

I had been wondering this lately, and so have been asking people: who are IBM's software customers? My company sells into a wide range of Global 2000 companies, but we almost never bump into IBM databases or application servers (or hardware, for that matter). I can count the number of times on two hands, yet we often run into Oracle, Microsoft, BEA Weblogic, even Sybase. Rarely IBM.

IBM is doing a ton of revenue in software sales. But to whom does it sell its software?

I asked an analyst friend, and she had the same question (and had heard the same thing from other vendors). I asked a friend at a large competitor of IBM's, and she suggested that IBM's software business is mostly mainframe-based (where we would not compete).

What do you think? Do you see customers using IBM's software with your solution? Please let me know. I'm genuinely curious (and continue to be very surprised).

Savio?

[Vertal]

Sears and the US Federal Government

These two come to mind.

[botchagalupe]

Where is IBM? You have to be kidding.

Where is IBM? You have to be kidding.

They are running the infrastructure of your life. My guess is that your bank, energy company, your insurance, your hospital, your cable company, state government, your federal government, airline, the companies that stock most of your refrigerator and pantry all run some IBM hardware and Software even though I have no idea where you live. Have you ever looked at the financials of the IBM services origination and know how many global 2000 companies they are running? What software do you thing they use? Come on, just google websphere. Even though you don?t see DB2 as much as Oracle more often than not Oracle is running on IBM hardware in the larger enterprises. I personally have empirical data on over 1000 of the global 5000 that are running IBM software which I?m obviously not going to disclose. All I can say is you and your friends are looking in the wrong places.

johnmwillis.com

[Matt Asay]

John, that's my point

I know that they're everywhere. I know that IBM has a massive software business. But I literally rarely see them, yet I see Oracle/etc. all the time. I don't claim to have a good answer as to why, but it's a serious question. How can IBM be so pervasive and yet be invisible (to my company, which sells into the exact same companies that you just described)?

[botchagalupe]

Honestly, I think they don?t want to people to rea

They are very selective about their showcases (at least in my ESM space). A great example is, I know through the grapevine that Google runs Tivoli. I could not get anyone at OSCON to confirm this. I don?t know if you attended Chris Dibona?s Google presentation. I was the one making a fool of my self trying to get him to tell what Google does for ESM - no budge. The Tivoli community has a vast and active list serve that IBM has been trying to shut down for years however the community won?t let them. You can see millions of entries from a lot of big companies running Tivoli. Also, the Micromuse lists are even more active. The thing is I know IBM services is working on about five well know outsourcing/service deals and you won?t see any of those company names on any of these lists. IBM puts a blanket around these customers and basically runs in stealth mode. IBM is very protective of their customer lists. In fact IBM use to have a logo on Ebay saying ?Powered by Tivoli?. It?s not there anymore. I have been selling Tivoli services for years and I can not get near the Google Tivoli guys. I also know that internally in IBM different divisions don?t share their list even internally. For example I don?t think the DB2 sales guys get a list of all the P5x customers (which is huge).

Anyway, I did want to tell you that even though I tend to be critical in some of my comments I really enjoy your blog. It is one of the blogs that I check every day with out fail.

Thanks
John

[Savio.Rodrigues]

Why not look at our SEC filings?

Matt, unfortunately IBM's business conduct guidelines don't really allow me (or any other IBMer) to give more details on customers or revenue than what is available in our public SEC filings or other public data.

To your analyst friend who believes we make our revenue mostly from mainframe-based software, please pass him/her the url to our 2006 Annual Report here: ftp://ftp.software.ibm.com/annualreport/2006/2006_ibm_annual.pdf

On pg 32: Of the $18.161B software revenue in 2006:
$9.369B came from Key Branded Middleware and $4.522B came from "other middleware" which is defined as "products, including host software products such as compilers, certain tools and Other Storage and Printer software" on pg. 40.

Key Branded Middleware is made up of five key brands (WebSphere, Lotus, Tivoli, Rational, DB2/Information Management) which provide an integrated suite for the company?s customers.

The Key Branded Middleware revenue grew at 17.1% vs. the old host stuff which grew at -0.6% (i.e. declined).

I hope you can appreciate how awesome it is that our software revenues grow year on year when a $4.5B portion of our revenue (from host-based products) is declining and being replaced by revenue from Key Branded Middleware.