IBM sells Collaboration Business fully to HCL – few thoughts

Those of you who know me for a longer time know that I have been part of IBM’s Collaboration business for a very long time and have recently left IBM.

With the announcement last week, I must admit I do have very mixed emotions about it. First of all I am thinking of my former teams (if they are even still existing and still part of IBM. I think some people had seen the writing on the wall (so had I) and have moved on.

In general I think Domino and Connections have been good ideas (I am not saying good products, hold on for a few more min). They changed the world, they both were an impulse in the industry to make people think about collaboration differently. Why I don’t call them good products? Because of the lack of investment. Both product families were profitable for IBM – at least that was my last understanding (ICEC was for sure, the product I was last responsible for in IBM). But I do believe that there were wrong decision made for a to long time. Sure, Cash Cows need to pay for new developments, but the business needs to maintain balance and actively manage development. What happened from my PoV is that Domino had to pay for a lot of things, but it didn’t have to pay for it’s own development. And this lead to fewer innovations and enhancements and made I think the fear of clients that was articulated a self – fullfilling prophecy. People looked to migrate away from Domino for eMail mostly. And because eMail was never the real focus, it was to late when things changed. But at that point in time, in my opinion, the focus was switched to mail, ignoring that the most important reason for Domino to be used by clients was the AppDev capabilities. So with the focus back to mail, the next important area lost the focus. So, to make a long story short, I think the decline of Domino was mostly driven through IBM.

I think Connections is a similar story. Because new products had to be launched, development was cut back on it, customers became unhappy and the new pink vision was the direction people wanted to go for. As much as this was the right direction, reality is as well that pink was a rewrite of the stack with little new value and innovation. Sure, it was the way to enable it, but that would have been some time before it would happen.

In general I think as well that the whole ICS brand was in a very difficult situation. It was pretty much (with Portal) the only end-user facing software IBM was selling and majority of people didn’t care about this business and were rather looking (especially the CIO office) to get SAAS offerings from the market. There was little to no appetite to use IBM itself to improve the software. It was rather sacrificed (as so many other profitable business) on the altar of shareholder value – sucked dry, then sold to pay for the next acquisition – in this case RedHat.

So it hurts me to – in a retrospective – see all this happen now. But as I said earlier, the writing was clearly on the wall for a while. I think who had ignored this was living in a bubble….

For the products the sell to HCL is a good thing, I think. HCL wants to invest, a lot of the former engineers are already over and make an impact. They can make decisions without the burden of IBM and politics, hopefully without teams being constantly cut.

There are 2 concerns I have on this:

  1. it is the same people again. I do really hope the leaders have learned from the things that happened in IBM and the critics they got from clients to do things better now. I am pretty sure the pink vision will rise again, but this time I hope there is a ongoing focus on delivering customer value instead of only technology
  2. this is the even bigger one – is this a to big task? With he lack of investment by IBM I have the feeling that both products are a few years behind competition. So can that gap be closed? Or is HCL willing to have a clear focus and communicate that to the market? And – is there a value prop compared to some many other tools that have been developed in the meantime and are established already?

Time will clearly tell what is going to happen. I wish all my former colleages well and I also hope everyone will have a choice what to do next and make the right decision.

At some point I want to write a little more about my own PoV, why I left and what I felt changed for me since. But that will be a few more days, maybe around Christmas at some point.

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3 Responses to IBM sells Collaboration Business fully to HCL – few thoughts

  1. edbrill says:

    Very well thought-out Christian. And a lot of accurate historical evidence.

    However, I disagree on “the same people.” The people who made the decisions around investment levels in Domino and Connections were a level or two up from those at HCL or those of us who ran the business. My vision in divestiture was always to unshackle from these financial equations and allow the gross margin to be reinvested in the products. It already seems to have been happening under the partnership approach, and I think will be even moreso under the next phase. I probably still can’t comment on business terms but the first deal was set up well for HCL to do the right things.

    If I sound a bit defensive, it is because the perception of some corners of the market has been that the functional leaders were part of the problem. The reality at IBM is by the time these decisions got to people like me and Richard Jefts, we mostly had to go make them work (rather than shape or influence). You lived through one such time period in Q2 of 2017. I have a lot of confidence in the HCL team already, as long as they get the right people that come over in this second deal they should level up. To your second point is it enough, is it too late? Don’t know but I am enjoying watching it play out.

    • cholsing says:

      Ed – I totally agree with your point that the decisions that lead ICS here were made above even the ICS GM, I know and I also have been told some of those things. I do wish the team all success to do this right and be successful!

  2. Michael Schlömp says:

    Thanks for sharing your POV and I hope to hear more from you soon. Happy X-MAS for you and your familiy.

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