If IBM can, why is it so hard for Compaq and HP?

You almost certainly don't care that Jan Lindelow wears a T-shirt and cutoffs to work. But since that fact could indirectly have an impact on the cost-effective management of your network systems, you probably should.

Lindelow is the president and CEO of Tivoli Systems, the systems management software outfit that was acquired by IBM about three years ago. Since that acquisition, the nine-year-old, Texas-based Tivoli has emerged from obscurity in Asia to become not only a formidable competitor to the likes of Computer Associates International, but one of the few IT vendors that has enjoyed net growth in the region during the past year despite the economic downturn.

What makes it so noteworthy that Lindelow wears a T-shirt and cutoffs to work is the simple fact that it demonstrates how smart IBM is in leaving its software acquisitions alone to do what they do best. As was the case with its acquisition of Lotus Development, IBM has refrained from imposing its own cultural and managerial sensibilities on Tivoli so that the Tivoli crew is free to develop the software you need to solve some of the problems you face and to generally make your life easier.

Judging from the user and analyst response to the recent introduction of a range of revamped systems management products and initiatives that comprise what the company calls Tivoli Enterprise, a lot of people have been impressed by how Tivoli is actually managing to deliver more substance than hype with this stuff.

You have to give IBM its share of the credit for that, because it's been able to accomplish two things that are notoriously difficult to accomplish: making acquisitions work well almost from the outset; and getting the hardware and software camps within its own organisation to leverage each other's strengths and to work effectively together to solve real-world problems faced by IS managers.

That Tivoli's acquisition by IBM has worked out well is difficult to refute. Tivoli started out as a very US-centric company which, in its first six years of existence, grew to a 300-employee operation and a $US50 million business, with almost all of that business in the US with a handful of very large customers. Since IBM's acquisition three years ago, the company has achieved a global presence with 3500 employees in 45 countries, and it expects to do over $US1.5 billion in revenue this year with thousands of customers around the world.

Making acquisitions work that effectively isn't easy, as other large IT vendors that have gone on acquisition sprees can attest. Compaq Computer is a case in point. I recently spoke with two former Compaq employees who now happen to be working for Tivoli, and neither had much good to say about the new, acquisition-fed Compaq. "I just wasn't having fun anymore," said one. Compaq CEO Eckhard Pfeiffer "bit off more than he could chew" with the acquisition of Digital, said the other.

IBM CEO Lou Gerstner, on the other hand, is getting high marks for his acquisition prowess.

"This is the new IBM -- this would never have happened in the pre-Gerstner days," said Bob Hayward, group vice president at GartnerGroup Asia-Pacific, referring specifically to IBM's acquisitions of Lotus and Tivoli. "These acquisitions, if they would have occurred at all -- because IBM was not an acquisitive company -- would have been really screwed up," Hayward said.

Hayward also has a lot to say about IBM's ability to get its hardware and software sales arms working in sync, an ability that's lacking in some other big vendors -- notably, Hewlett-Packard.

HP has traditionally been strong in Asia with its OpenView offering, with an installed base that's kept it ahead of both IBM and Computer Associates. But HP has had a hard time holding on to that lead over the past couple of years, Hayward noted.

"It's been a struggle for them. They've got some good people in Asia, and the product's not that bad. It's just not in the centre of the HP sales force radar screen," Hayward said. "The (HP sales) guy's really only interested in selling these big servers or 5000 PCs or whatever -- that's what he's really juiced about. And trying to get him to understand OpenView and the value (proposition), they're not interested -- I've been there and I've seen it. They'd just rather sell the hardware and if it gets managed by something else that's fine. They're not going to put up a big fight about that."

And IBM isn't going to put up a big fight about what the CEOs of its software subsidiaries wear to work, which is a good sign. "They've run their Tivoli organisation very much like a software company as a standalone unit, which I hope they'll continue to do," Hayward said. "I'd be very, very worried if they mothered Tivoli to death." Fortunately for IS managers who have systems management problems to deal with, IBM has demonstrated that that's highly unlikely.

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