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Strategy Letter V and IBM

The strategy letter is entirely wrong about IBM's Open Source strategy. It's a lovely theory, but the premise is inaccurate.

Myth: They're doing this because IBM is becoming an IT consulting company. IT consulting is a complement of enterprise software. Thus IBM needs to commoditize enterprise software, and the best way to do this is by supporting open source. Lo and behold, their consulting division is winning big with this strategy.

I work for an IBM business partner, doing consulting. They are NOT commoditizing enterprise software. Have you looked at the prices of Websphere or DB2? The new version of Websphere Commerce Suite is apparently going to cost US$150,000 for a single license. A lot of our revenue, and a lot of IBM's revenue comes from selling software. We count on this.

Of course, JBoss have other ideas. They _do_ want to commoditize the application server, and live off the consulting fees. But they're also (or at least their spokesman/head coder is) madly passionate about the ideals of Free Software.

IBM's Open Source strategy comes from making use of things that have /already/ been commoditized to some extent, like Unix-on-Intel, and web-servers. They're also capitalizing on the buzz, which has done a lot to defeat the view in many hacker circles that IBM is evil.

Charles Miller
Monday, June 17, 2002

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