IBM PartnerWorld: Gerstner Sketches Plans For Future - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

IBM PartnerWorld: Gerstner Sketches Plans For Future

IBM chairman and CEO Lou Gerstner talked about E-business, Linux, middleware, and outsourcing. He talked about resellers, systems integrators, and independent software vendors, and how IBM is handing them more authority. But in his keynote address at the vendor's PartnerWorld 2001 conference in Atlanta on Monday, Gerstner didn't talk about what may be the hottest topic in IT: the cooling economy and its impact on customers' spending.

On Friday, Salomon Smith Barney cut its 12-month price target for IBM shares to $135 from $140; they closed that day at $104. Salomon also cut its IBM revenue target for 2001 by $1 billion, citing tepid demand for IT. But Gerstner avoided those topics in his speech, instead painting the downturn in tech stocks as a shakeout of weak business plans.

"We've passed through the roller-coaster ride of E-business phase one," he said. "There were a lot of false starts." Gerstner was on hand to assure the audience of resellers and integrators that their channel isn't one of them. One-third of IBM's $88.4 billion in sales last year came though the channel, compared with less than 12% in 1993, when Gerstner took over as CEO. And the vendor is trying to hand partners more authority to lead product sales and service contracts, especially in the midmarket.

IBM plans no cap on the amount of channel sales it finances through its credit arm this year, Gerstner said. It's stepping back from more consulting and systems integration engagements to let resellers lead. The vendor will continue its exit from the application software development market, instead augmenting the 50 independent software vendor contracts it signed last year, which accounted for $700 million in sales. And IBM plans to invest $4 billion this year to build its data-hosting capacity, which the channel can resell.

Outsourcing is key to IBM's software strategy of developing middleware that sits on its servers and mediates between customers' apps and operating systems. With hosted software, more data processing, security, and systems management occur on the server and in the network layer of an application. "E-business workloads are not going to be processed on the desktop," Gerstner said. In a veiled dig at rivals Microsoft and Sun Microsystems, he said customers should be able to run software without worrying about compatibility with "any vendor's application suite or operating system."

There's one operating system IBM likes a lot, though, and that's Linux. The vendor is tailoring the system to run on all its servers, and Gerstner said IBM has 1,500 Linux developers on staff. "We think Linux matters," he said. Presumably, the economy does, too.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
News
Rethinking IT: Tech Investments that Drive Business Growth
Jessica Davis, Senior Editor, Enterprise Apps,  10/3/2019
Slideshows
IT Careers: 12 Job Skills in Demand for 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/1/2019
Commentary
Six Inevitable Technologies and the Milestones They Unlock
Guest Commentary, Guest Commentary,  10/3/2019
Register for InformationWeek Newsletters
Video
Current Issue
Data Science and AI in the Fast Lane
This IT Trend Report will help you gain insight into how quickly and dramatically data science is influencing how enterprises are managed and where they will derive business success. Read the report today!
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll