IBM maps out database sales campaign
'People have had enough of Oracle tactics'
With Oracle's results showing further slippage, IBM is feeling pretty bullish about its prospects. Marc Dupaquier, IBM's worldwide VP for data management solutions sales, told IT-Analysis.com how he intends to exploit this slip and why Informix and Linux are key to it all.
What's the state of the DB2 market right now?
We are pretty happy with the way things are going right now. We've had two very strong quarters where we have grown the business from 13% to 15% market share and we continue to make gains over Oracle every day. On the S/390 we continue to grow our business particularly through our ISV relationships and, in comparison to Oracle we are moving forward very effectively.
How important are the ISV relationships that you have established with Siebel, SAP, PeopleSoft and such like?
These relationships are very important to IBM. If you look back a few years we had very little support in this area, there weren't many applications that ran and were optimised for DB2. Now however, that situation has almost completely reversed. We have hundreds of ISVs supporting our efforts and, to be honest with you, this is driving our sales much more than we had ever hoped for. Siebel is making huge inroads for us, PeopleSoft is growing day by day and SAP is coming along very nicely. We still have work to do but these relationships are adding value for all parties every day.
Siebel in particular appears to be a very key part of IBM's strategy against Oracle, how effective is it?
Siebel is making huge gains for us. It is a company that has a huge installed base and it puts us in front of many of those key accounts. In many ways though it is the perfect match. We find that IBM and Siebel work very well in the big financial accounts, which is traditional IBM territory, so the customers are very happy that we work so closely together. The big surprise that Siebel has thrown up however is the number of wins it is getting on the S/390 mainframe. This is producing much more than we could have hoped and we are obviously very pleased with this, it works out very well for both of us.
So can we expect to see more relationships like this being formed?
Partnerships like we have with these companies are very close indeed, we have joint teams working together at many of these companies. But we also have relationships with most of the important software vendors, Ariba, I2 and such like. Now we have the Informix products too we have even more ISVs and we are continuing to invest in these alliances.
How well is the Informix sales team fitting into IBM?
The sales teams merged on July 2nd because we were very keen for everyone to get ready and to get integrated as quickly as possible. But we haven't just dumped Informix people under IBM's umbrella. The Informix acquisition was undertaken for a number of reasons and one of those was because Informix had some very good people which we have postioned across IBM. We decided to put the right people into the right positions rather than just have Informix working for IBM so, for instance, the head of France is now an ex-Informix employee, he was the general manager of Informix France. And that is typical of the way we have tackled this.
Overall we are very happy with the way the teams are working together. We have, from the point of announcing the acquisition up until today, only lost three Informix employees and possibly the same from the IBM, although I think that is slightly less. We did face some problems at the very senior country level but everyone knew about this from the first day and it has been resolved. In the US in particular however we are thrilled. It's very easy for Informix and IBM sales people to get new jobs in the US but virtually nobody has actually left so we were very pleased with that. To be honest we had expected a greater impact but everyone seems very happy.
So what's next for the integration?
January 1st is the next milestone. This is when everyone will be fully integrated, given new quotas and assigned new territories. We had to leave this until January 1st for two reasons. The first was that we have to get everyone fully conversant with the technologies, we need to educate everyone and that takes time. Aside from that though, and this may seem somewhat trivial, we also decided that we didn't want to start juggling sales quotas mid-quarter. It was a headache that nobody needed so we decided to leave that until January.
How did the Informix acquisition come about?
Talk of the Informix sale came about last year during a strategy workshop. In November we were all sat round a table congratulating ourselves on the excellent performance we had given that year. But we all knew that we had to do something more. Janet Perna, the head of the data management division, said okay, we are pretty happy but what else can we do. We all decided that we needed to do something that was going to change the game. But we also knew that we couldn't do this organically - and that's where Informix came into it.
Oracle seems to think that Informix was acquired out of desperation, is there any truth in that?
[Laughing] I think you'll have to decide for yourself who's desperate right now. The strategy that we put in place was aimed at achieving three things, we wanted to increase our sales presence, we wanted to increase our ISV support and we wanted to develop our technologies. We could have done that organically but we would have lost the momentum that we had built up by tackling it like that so we looked at Informix and it was the perfect fit. It had ISV relationships, very strong technologies, very good sales teams, and very good people overall. And, buy buying Informix, we were able to continue the momentum that we had built up and keep the pressure on. It all just made perfect sense.
So do you and your teams see Oracle as major problem on the ground
I only ever see Oracle as an opportunity. Oracle has tried so hard to get Informix customers to switch over to Oracle but it's fighting a losing battle. People, by which I mean customers and ISVs, have had enough of Oracle's tactics and that provides me and my teams with a great opportunity. I have seen no reports of Oracle winning any contracts from us from the Informix installed base. I personally have met with more than 800 Informix customers and none of them to my knowledge have made the switch. They were very happy with our proposition. And who can blame them. Right now our customers are concerned with saving money and that's what DB2 and Informix products can do for them. They don't need the expense of switching over to Oracle.
Are you seeing much of a slowdown?
I would say that we are and we aren't. The only place that I honestly see the slowdown is with big contracts that some of our loyal customers take out with us. Instead of signing a contract for three or five years or something like that they are cutting it back by a year. But overall things aren't too bad to be honest with you.
What about Microsoft, do they hit the IBM radar very often?
Microsoft is a very clever company with very good products and I have to say we watch it very closely. However, whilst we might run up against Oracle on a few hundred deals each quarter, Microsoft probably only appears once or twice. We don't really operate in the same space. Microsoft rules the SMEs and it has a very strong strategy. But IBM operates above that so we don't cross paths very often. The weakness for Microsoft is that it's a one operating system company, the same as IBM was years ago and that will always keep it slightly out of IBM's way. For Oracle however that's a different story. Oracle must feel Microsoft quite a lot in the SME accounts and with IBM attacking it in the high end, Oracle is under big pressure.
I don't imagine you get asked this very often, but does Sybase ever crop up?
To be honest we don't really see Sybase. I can see them moving deeper into the Portals space where they have some very good products but they can't really compete in this space anymore. To be a contender in the database market nowadays you need to invest very heavily and to do that you need a lot of customers. I don't see that Sybase can do that. When we decided to look at a game changing event for the database market we didn't really spend much time considering Sybase, we figured that we could take its market share, and it's technologies didn't really fit with ours.
Tell me about the open source movement. You seem very close to Red Hat. Is this an important relationship?
Absolutely it is yes. Red Hat does resell DB2 for instance and it works very closely with us overall. We also do a lot of work for Red Hat customers and have many specifically designed tools to help people migrate from Red Hat and other freeware installations. For instance, a lot of the dot com companies that started up last year started their operations on Freeware but, as their database demands have grown and they need real scalability, reliability and such like, we have gone in and upgraded them to DB2. Kelkoo is a prime example of this. It found itself reaching the limit of its freeware database and switched to DB2 and there are plenty of companies doing that.
So do you sell many DB2 installations on Linux?
We certainly do yes. We see an awful lot of interest in Linux across all sizes of business. In China for example I would say that at least 50% of our DB2 installations are on Linux. In Europe I could not name one major manufacturer that does not have a Linux project or live installation. Linux is huge. To be honest though, it's not quite so popular in the US. I don't know why. But for some reason the US seems to be more reluctant to go with Linux. Perhaps this is because Sun is so big or Microsoft so popular, or perhaps because Linux came out of Europe, but I don't see the same level of take-up of Linux in the US.
What else are your customers focussing on in data management?
CRM is a huge trend right now. I would say in fact that is perhaps the key trend right now, everyone is doing CRM and they need databases to support that strategy. Similarly with Internet projects. These are, despite all of the problems, still gathering pace. They are much more revenue foccussed than they used to be and much bigger too, they are still popular. One thing that I see slipping is the business intelligence market however. I think organisations have decided that this year isn't the year to be spending on mining their data so that's definitely not doing as well as it has in the past.
Finally, what can we expect to see from IBM over the next 6-12 months?
The big priority for IBM is the Informix integration, that's going to be our core focus. But running in parallel to that we will be putting an awful lot of effort into our ISV development. We have key milestones laid out that we have to execute and we are very committed to that. The third thing we will be doing is growing our tools business. We see areas like content management as absolutely key for instance, and we intend to take charge of that market. Right now we see a lot of good companies in content management but they are all controlling a niche, we intend to assert ourselves as leader in this space, so that will be a big push for us.
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