How Tivoli Acquired IBM. On Pulse 2012 and Cultural Change for Smarter Computing.

I couldn’t make it to Pulse 2012 this year, but we sent Tom and Donnie over to check out what IBM Tivoli has to say about “Optimising The World’s Infrastructure”.

IBM streamed the keynotes so I was able to keep abreast of some of the content, and it seems like IBM Software is finally nailing it when it comes to customer references at events speaking fluently about business issues and best practices. Pulse began to get this right in 2009.

Given I couldn’t make the event, what could I really add? Well plenty obviously- the key themes of mobility, analytics and virtualisation are all worth talking to in a management context – take IT security, which now needs to both encompass these themes, and be enabled by them. The beta release of SmartCloud Continuous Deployment server is another big deal.

But as someone growing into the “elder” role I increasingly see it as important to remind everyone of how we got here.

Tivoli went public in 1995. IBM acquired the company outright for $750m+ in 1996, creating today’s thriving Austin Angel and VC scene in the process. At the time IBM was instituionally still pretty clueless about running an independent software business.

Tivoli’s CEO Frank Moss as the time described the deal as a “reverse takeover of IBM by Tivoli”. It was pretty easy to scoff at the time, but Tivoli changed the culture at IBM permanently and fundamentally. Arguably the Tivoli acquisition was the one that really set IBM on the way to its current Software and Services success.

It starts with developers. Well it would, wouldn’t it? Tivoli engineers were used to developing on Sun workstations. They were developing Unix software, and Sun built the best workstations at the time. Soon after the acquisition was announced Tivoli bought some new hardware for development (well you would, wouldn’t you?) or rather it tried to. Sure enough an IBM bean counter popped up and tried to scotch the deal. IBM of course sold its own RS/6000 workstations, and of course Tivoli developers should be using those instead. The absurdities of IBM internal purchasing aside, this was an existential moment for Tivoli, and in fact for IBM’s entire future. Tivoli fought back and insisted that the developers got their way- I don’t whether Martin Neath, Tom Bishop or Frank Moss deserves the credit, but the end result was that Tivoli could keep building Open Systems software, using Open Systems hardware- but it could choose suppliers. Why was this event such a big deal? The answer is pretty simple – if Tivoli was perceived to be built on, and optimised for, IBM hardware then IBM had thrown away its money – you don’t buy a cross platform management framework while Unix is exploding and then hobble the acquisition…

LinkedIn Twitter
James, aka @Monkchips is co-founder of RedMonk, the open source analyst firm, which specialises in developer advocacy and analytics.