ZDNet presents an interview with Paul Horn, director of IBM Research about its $ 6 billion R&D budget.
While some of the research he describes in hardware like blade servers and power management reflect the traditions of "Big Blue", I was less impressed with what he calls "R&D" in software and services.
a) Microsoft R&D
"We have a very different corporate culture and corporate focus than Microsoft....Microsoft is sort of where we were at 15 or 20 years ago. They are manically focused on how they will build their next generation of their application suites and how they will maintain the Wintel duopoly and how they will maintain Windows position."
CIOs pay IBM twice as much for software as they do SAP. They want IBM to be just as maniacal in its R&D as Microsoft or SAP. Most of IBM's software innovations have come from the wide range of acquisitions it has made, not from its labs.
b) Open source
"We have over a billion dollars a year of bottom line profit from licensing intellectual property and yet we're embracing open source because we know it's going to be completely disruptive."
Where are Open Source principles being aggressively applied in IBM's proprietary software stack and where are Open Source communities being leveraged to cannibalize their expensive consulting resources? IBM is THE "cathedral" to the "bazaar" that is Open Source.
c) Automation of services delivery
"...technology hasn't been applied to IT services delivery. So there is more opportunity for automation, and the surface is barely getting scratched."
Paul, we have been waiting for a while for this as I wrote in Systems Integration v/s Management Complexity
d) Process Improvement
"Just think of the gross domestic product of the world with all these companies operating in some inefficient manner. If you could squeeze a little inefficiency out by detailed analysis and modeling of how a company operates--there are huge opportunities there."
IBM's $ 50 billion services unit is itself a huge opportunity for process efficiencies as I wrote in Frederick Taylor and Technology Services. For many clients re-engineering their IBM (and in fairness, their Accenture or EDS or TCS) contract is one of their biggest improvement opportunities given the inefficiencies in services today.
Paul seems like a sincere guy. But the old IBM salesman and the more recent PwC consultant in the blue suits now just outmuscle the engineer in the blue jeans. I know R&D spend does not directly correlate to innovation, but IBM now spends 4X on SG&A as it does on R&D. To me, the icon of US technology innovation is dying. And that is a reason to feel blue.
Update : Jeff Nolan posts about IBM's SOA hub in India. My comments there say I view it more as a marketing than an R&D investment - till I can see tangible labor productivity improvement.
