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IBM's Steve Mills talks Oracle, Watson's future

Oracle's one goal is to "make Larry rich," according to IBM's head of software and systems

By Chris Kanaracus, IDG News Service
June 22, 2011 12:40 PM ET

IDG News Service - IBM's Steve Mills has long been known for his leadership of the company's software division, but last year he added hardware and systems to his responsibilities as well. That move put Mills in charge of 100,000 employees and products that generate US$40 billion in revenue for IBM, according to its website.

In an interview this week at IBM's Netezza Enzee Universe conference in Boston, Mills shared how he feels about rival Oracle these days, gave a preview of the commercial future of the Watson supercomputer that famously trounced human contestants on the game show Jeopardy, and discussed the future of SaaS (software as a service).

IDG News Service: Oracle, led by CEO Larry Ellison, is now selling a vision of integrated systems combining software and hardware, a strategy that many have said simply mimics what IBM did long ago. What do you think of what Oracle is doing?

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Steve Mills: Oracle's got a very simple strategy, and that's make Larry rich. It's the reason the company was founded, it's its core purpose. As the biggest shareholder, it delivers value to Larry. It makes sense to Wall Street.

They're not a customer-friendly company. They want the customer's money and they're very creative with coming up with different ways to get the customer's money. They cannibalize their own ecosystem, they compete with their partners. It's a very pragmatic strategy. Whatever it takes to get money, that's what they're going to work on. If they think they can get money putting things together, they'll put them together. If they can only get so much money out of that, they'll take them apart and do it another way.

It's not driven by a strategy, per se, on some vision of where information technology is going. It's driven by the money-making motivation. All public companies have a motivation to make money. It's not a matter of, they're the only ones that think about making money. But some companies are more aggressive in their singular pursuit of that goal than others.

Oracle does a lot of this at the expense of their clients, which makes them my favorite company to compete against. They use schoolyard bully tactics, they make a lot of claims they can't back up, they tend to back away from benchmarks and any real-world evaluation of their technology. We find they're a great opportunity creator. They put a lot of silly statements out that are easy to challenge. Customers don't like negotiating with them. They're difficult to get along with. They anger clients.

IDGNS: What is your opinion of Oracle's decision to stop developing software that supports Intel's Itanium chips, which Hewlett-Packard uses in server systems?

Mills: [The decision] essentially put a sharp stick in HP's eye. You look at that from a customer perspective and you say, Oracle may hate HP, but by the way, they just put a sharp stick in my eye, because I bought a bunch of HP Itanium boxes, I'm running HP-UX and Oracle stuff on top of that and now they're saying they're not going to support that. In effect, it's an attack on the customer. Oracle didn't ask their customers whether ending support on Itanium was something that they would like. There were no customers consulted on that decision. They did it because they wanted to pick a fight with HP.

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