Microsoft and IBM Love Their Spots

Vendors, like leopards, feel most comfortable in their own skin - warts, spots and all. Recent developments with IBM and Microsoft prove this adage. Despite the economy, both have enormous resources to avoid existential crises; in fact, a bigger concern could be that their employees are too insulated from reality. The layoffs each announced recently were comparatively minor, leading some analysts to view them more as "wake up calls" to their employees. Their enduring spots, though, have become apparent in how they are adjusting products and services.Regarding Microsoft, while I don't have too much to add to the fine articles and commentary at Intelligent Enterprise by Doug Henschen and Cindy Howson, I'd like to offer a few observations. Microsoft's PerformancePoint repositioning isn't all that surprising; all the way along in its BI adventure, Microsoft has seemed most interested in finding a way to embed BI and performance management in its other applications, particularly Microsoft Office Excel. Just as the other BI vendors have learned that they must live with rather than replace Excel, Microsoft knows that spreadsheets are forever. Of course, the question remains as to whether its customers can manage information effectively across their organizations if "the masses" are using spreadsheets enhanced with BI rather than an enterprise BI platform. Studies by Ventana Research in particular have exposed the difficulties spreadsheets bring in terms of data quality, consistency and scalability.

The PerformancePoint/SharePoint move seems like a similar "live inside your own skin" strategy. Performance management (PM) may have had its origins in BI, but if its future is in serving operational requirements, the BI aspect is not necessarily the big draw. More significant is the role PM plays in continuous process improvement cycles, which makes it sensible to bring PerformancePoint closer to business process management, workflow and modeling. Performance management is also important to applications: but while Microsoft has applications, its biggest "spots" are its tools. The company would surely like to see SharePoint become as ubiquitous in its own way as Excel is on the desktop. So, why not just enhance SharePoint? Plus, this way PerformancePoint doesn't have to compete nakedly against IBM, SAP and other more entrenched BI and PM players that already have a bulwark of established relationships with customers, particularly in IT. Finally, the PM-process connection fits with Microsoft's vision of the role of BI in Office 14.

What about IBM? In the past, tough economic times have been relatively good times for the company, and earnings reports so far indicate that things may be no different in our current troubling period. IBM management proved wise in acquiring Cognos and other firms, which bulked up its stable of software licenses to keep the revenues flowing. Now, IBM is pushing hard into cloud computing; CEO Sam Palmisano, just before visiting President Obama last week to offer support for the stimulus package, named Erich Clementi, general manager of Enterprise Initiatives and previously IBM's Managed Business Process Services to head up a new amalgamation of services, software and hardware dedicated to fulfilling customers' cloud aspirations.

IBM's "spot" is that it never goes after trends like cloud computing in a small way, even though the low-hanging fruit in the cloud market (pardon the mixed metaphor) could be small and medium-sized businesses. IBM clearly sees cloud computing as right in its sweet spot, harkening back to the days of time-sharing. Focused on applying cloud computing to giant data centers and business processes, it may not see demand at lower points in the market.

The company's other indelible trait is its sometime cloudy, albeit interesting advertising campaigns. "Money," states a recent IBM print ad, "has been reduced to zeros and ones. It's intangible, invisible. It's information. Which is central both to the problem we face and to its solution." Intellectually, that's a fascinating observation, but probably of cold comfort to organizations desperate to cut costs so they can meet payroll. Maybe Bernie Madoff could tell Zsa Zsa Gabor, who reportedly lost $10 million in his swindle, "It's just zeros and ones, dahling!"Vendors, like leopards, feel most comfortable in their own skin - warts, spots and all. Recent developments with IBM and Microsoft prove this adage. Despite the economy, both have enormous resources to avoid existential crises... Their enduring spots have become apparent in how they are adjusting products and services.