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IBM buddies with MS over Win2k server

Near Redmond, IBM techies beaver away on 'Microsoft technologies'

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Analysis More than four years on from white-knuckle IBM-Microsoft negotiations over Windows 95 and technology access, the pair are buddied-up again, and IBM has access to Windows NT source code at its Kirkland, Washington site (near Redmond). As Microsoft trial evidence made clear earlier this year, source access for Kirkland was a key issue for IBM in the run-up to 95's launch. These days the Kirkland facility is known as the IBM Center for Microsoft Technologies, and the focus is Win2k. IBM's vision is apparently to make IBM hardware "scream with Microsoft software", and some of IBM's code fixes have been incorporated into Microsoft's forthcoming product.. Pat Gibney, IBM director of competitive products and Windows 2000 systems, has handled the technical aspects of the Microsoft collaboration since November 1996. With 40 per cent of IBM's revenue coming via third parties, it is hardly surprising that IBM would not want some form of profitable relationship with Microsoft, but the seriousness of it is quite surprising. Who would have thought, after the revelations about the state of the IBM-Microsoft relationship in 1994 and 1995 in Gary Norris' rebuttal evidence in the Microsoft trial in June, that there would be a large scale Windows 2000 collaboration? But it's clear that in the last few years there has been a fundamental change in the Microsoft relationship. From Microsoft's perspective, OS/2 has been removed as a competitor, and IBM has signed a First Wave agreement for NT. Gibney says it is as though there were "a single team": there are site visits, regular meetings and "a wide-open pipeline ... with mutual respect, mutual interest, and a healthy dose of paranoia". Discussions between IBM and Microsoft technical staff are apparently free and uncontrolled, but with IBM employees being instructed to "stick to business". An NT product technology council meets on a regular basis. For its part, Microsoft only collaborated when it thought, with its usual arrogance, that IBM technical staff were up-to-scratch on Microsoft products. IBM says it is not two-faced in its relationship with Microsoft, but multi-faced. The transformation from the IBM of the 1960s, 1970s and 1980s is quite remarkable, but there can be no doubt that IBM is serious about this openness policy. For its part, Microsoft also pays a price in that it has to accept that IBM competes in several sectors. IBM evidently sees value in having a major NT support effort, designed of course to keep its lucrative customers happy. This means that IBM will not pass the buck to Microsoft, even if a problem is with NT. With access to the source code, IBM can often fix a problem or get quick assistance from Microsoft when needed. Office 2000 problems are also covered, since IBM has a premium service agreement with Microsoft that gives it priority for getting work-arounds or fixes. IBM's current slogan is to convert mindshare to market share. Since DB2 became its first Intel server product in 1995, the value of IBM's server business in the sector has risen to $2 billion/year in 1998. It is clear that IBM is now putting a great deal of effort into its server business, and expects this to increase considerably. Expects Win2k to ship in January Gibney believes that Win2k will be sent to manufacturing around the time of Comdex and delivered in January, but that very few people will use it initially. IBM has been offering a free upgrade to Win2k from NT4 with its hardware from August, it transpires, and will continue this until March next year. Significantly, IBM says it will not increase prices for when Win2k is loaded instead of NT4. It is evident that there have been considerable culture changes on both sides of the IBM-Microsoft relationship. Lest it be thought that IBM is totally beholden to Microsoft, there is a very interesting slide presentation (entitled "IBM has got it covered") that shows how IBM's product portfolio can systematically substitute for all Microsoft's offerings. The paranoia element in the relationship seems to be very much alive, and doubtless Microsoft, in its heart-of-hearts (some assumptions here) is aware that IBM, and others, are positioned to provide substitutes should Win2k be deemed a failure, or if the Washington court makes it impossible for Microsoft to proceed as it plans. It's a heterogeneous world for everybody but Microsoft, and IBM seems confident that the homogeneous player will never provide the connectivity that the industry requires. Even Microsoft cannot control whether a Web page is served by a Microsoft product (yet - Ed.), so some measure of de jure standards observance is necessary by Microsoft if it is not to be vilified for sabotaging standards. The relationship has apparently not given IBM significantly better prices for Win2k, but with the software being only a small percentage of the overall systems price for large servers, IBM is perhaps not overly concerned about this. The collateral opportunities for additional selling that IBM gets by being seen to collaborate seriously with Microsoft must be sufficient to make the loss of face acceptable, and profitable. IBM is not the only NT collaborator (HP is hard on its heels) but its seriousness is significant. Big Blue faces both ways It looks as though Big Blue sees loads of money coming from the relationship and the NT collaboration. It is particularly interesting that IBM has been separately ramping up its Unix efforts under Project Monterey, to be ready as Win2k either delights or disappoints in the server space. If the former, IBM plans to be there with all its kit and server software, but if Win2k server flops, lo and behold, IBM has rejigged its Unix and is ready for business with its magic boxes. The relationship between IBM and Microsoft does not appear to be merely the political correctness du jour. All IBM products will work with Windows Terminal Server (Hydra). IBM is not without its criticisms of Microsoft's Win2k effort. It has evidently found inconsistencies in the look and feel of Windows Web controls, for example. There are however limits to the collaboration. All IBM middleware will interoperate with COM, but not COM+. So far as component models are concerned, IBM is very serious about Enterprise Java Beans, and evidently hopes that EJB and CORBA will move closer together. In response to the natural question as to why IBM should in effect link its software to more than one component model, Gibney's response is that "IBM is big enough to do it twice", adding that this is the price for not owning the Windows platform. Gibney says that a component is a component is a component, and IBM evidently has no religion in terms of preference, pushing the idea that IBM is dropping religion and building components. He sees the future of software as very much being bound up with components. IBM is backing InstallShield (with money and some translation assistance, as it is a small company) rather than MS Windows Installer, although as it turns out, Installer has certain advantages such as the ability to re-install without a complete uninstall, and what Microsoft likes to call self-healing whereby missing or damaged code can be replaced. Factoid: there are 40,000 lines of code in DB2 InstallShield. IBM has not been talking much about why it favoured InstallShield over MS Installer, but this could well be connected with IBM's desire to make it easy to load IBM software, and to retain at least some control. The other reason is almost certainly that Active Directory is in too early a stage to be reliable and trusted. It is known that Cisco has had problems developing for it. So far as security is concerned, It looks as though IBM will not surrender the administrative user interface to Microsoft, and will insist that its customers can see the Tivoli console, for example. Active Directory presents something of a dilemma to IBM, since it would like to provide the directory service preferred by its customers. Microsoft has welded AD on to Win2k so that its security and replication depends on the use of AD. There is a problem that there is no de jure directory services standard, but just a few strong players wanting to force their own de facto standards. IBM has decided that it will not use Active Directory initially at least, in view of its decision to use InstallShield rather than MS Installer. Kerberos does authentication, but not authorisation, and IBM is finding it takes considerable work to get kerberos to interoperate, but this is one of the prices for of the Win2k relationship. IBM wants to have its whole software and hardware portfolio ready for Win2k from day one, but knows that it will be some time before it is taken up in volume as a server. A consequence for Microsoft could be that Win2k might not produce the revenue that many have been forecasting, at least on the server side. Few users are likely to install W2K on existing kit, in view of the considerable resources required. As a consequence, there must be considerable uncertainty as to whether Microsoft will generate the revenue that Wall Street expects in the current financial year (ending 30 June) at least, and probably for the latter half of 2000. Wall Street would be shocked if Microsoft's revenue for the current FY fell below that of the present year, but it may happen. But whether Win2k server succeeds or fails, IBM seems to have covered its bets. ®

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