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IBM's Mills Sets Software Sights on Middleware, Linux

By Computerworld staff
October 27, 2003 12:00 PM ET

Computerworld - Steve Mills, senior vice president and group executive at IBM, runs the company's $13.6 billion software business. Last week at IBM's headquarters in Armonk, N.Y., Mills met with a group of Computerworld editors to discuss his middleware-centric software strategy and Microsoft-related security issues. Excerpts from the discussion follow:
You've said that $11 billion of your $13.6 billion software business is middleware. Why the disproportionate focus on middleware? We do that because it's a good business -- we have shareholders to satisfy. Middleware has always been important to customers. They need to do transactions, data management, development tools, systems management, security, collaboration.
We continue to invest in MVS on the mainframe and OS/400 for the iSeries platform. There are investments we have to make in support of the hardware platforms -- the operating systems are important. But the bulk of the money goes into middleware. And that's where the growth comes from.

How would you characterize your operating system business in general and AIX in particular? The operating system business, which is a multibillion-dollar business for us, in recent years has essentially been a flat business. AIX has been a flat business. We're supporting Linux on the pSeries today, and I think we'll see more and more customers over time decide to run the pSeries with Linux.
Linux will run on a variety of different chip sets; it certainly runs quite nicely on the Power chips. In the future, we'll see more and more customers run Linux on Power instead of running AIX on Power, and to us that's fine. AIX has always been an enabler. All the money in the Unix market has been made in hardware, in middleware on top of Unix, in applications and services on top of Unix. But not in Unix operating systems -- that's not where the payback has been.

So is it a matter of shifting your investment from AIX to Linux? We'll continue to invest in AIX probably for as long as I'm on the planet. More and more people, we believe, will choose Linux to run on Power vs. AIX on Power over time as Linux continues to increase in maturity and more and more things run on Linux on Power. So that's a logical progression of usage, and that's fine with us. We'll reach an inflection point where it'll be appropriate to spend less on AIX to enable the hardware.

Steve Mills, senior vice president of IBM's Software Group
Steve Mills, senior vice president of IBM's Software Group
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