Part 2: Mills unplugged: IBM-Microsoft-Sun love triangle is 'great fun'

Tech Update: The word standard used to mean that some officially recognized standards-setting body ratified it. I get the sense that that's no longer true. What is a standard today?

Mills: Well, take it from the customer view. The customer is seeking things that are common, well-understood, highly accessible, repeatable, and ubiquitous. They don't really care if it has an imprimatur on it; it's valuable through use. So, traditional notions of standards bodies have given way to a more fluid approach. Classic standards bodies in existence will continue to be in existence, but there are also de facto standards bodies that are created within industries today.

Industrial chemicals [companies] and financial institutions are coming together to create their own XML standards that are specific to their industry and the way they want to exchange information. The vendors are not engaged in those meetings because the vendors are not making the decisions as to how banks are going to define their transactional structures. The banks are deciding what that's going to be and they'll instantiate those things in XML. They'll in effect declare a Web service for those interactions [that] will then have to be adopted by the vendors who want to participate in those opportunities.

So we're democratizing to an ever greater degree these standardization processes in the industry today. It's very powerful in terms of accelerating standards in general.

Tech Update: You say common, well-understood, repeatable. What's the ultimate benefit to the customer?

Mills: Integration.

Tech Update: What about the notion of complying with standards, competing on implementation? I thought that one benefit was that companies can actually make substitutions based on those standards as another way of lowering their costs.

Mills: Absolutely. It's absolutely a priority for customers to make easy substitutions and it's a priority for us. As a heterogeneous supplier of hardware, software, and services, it benefits our business. The emergence of standards reduces the time and energy it requires to deploy information technology and makes it possible to do more in a given year than you can do today. The industry is labor-limited today.Tech Update: When I look across the board here at the parts of your portfolio, I see WebSphere, which is Java-based. I see the Tivoli management stuff, the Lotus collaboration tools, the DB2 database software, and a bunch of operating systems. If there's one guy I can point to in all of IBM who is the competitor to Microsoft, that guy is you. On top of that, IBM has this interesting relationship by sitting between Microsoft and Sun. You have Java on one side and Windows on the other for your Intel-based business. How does it feel to be in that job? What is it like to know that your company has to work really closely your chief competitor?

Mills: It's great fun. We cooperate with Sun on Java and other standards. And with Microsoft, we have found ways to cooperate on XML and Web services, and we're quite pleased with that. We're enthusiastic about their embracing of this technology. You know, you can spend a lot of time wondering about Microsoft's reasons for doing that. But I think they know that they need to drive customer adoption. Delivering products that are proprietary and that don't operate well with other things gets in the way of their business, so they have had to find ways to move closer to a standards-based approach than perhaps they were doing years ago.

Tech Update: Have you asked Sun to join the Web Services Interoperability Organization?

Mills: Sun is in a position to join the WS-I initiative. It's open to them.

Tech Update: Have you approached them and asked them to please join?

Mills: We've approached lots of companies to join, and Sun has to make their decision as to what they want to do and how they want to do it, but it's open to them to join.Tech Update: While we're talking about who's joining what, what are your thoughts on Passport and Liberty? For a company of IBM's size and importance not to have an opinion on it …

Mills: We have a very strong opinion on this subject. We know what end point we're seeking here--an open structure for identification and authentication so that client devices of various kinds can easily be identified and that the users of those devices can have an open identity structure and anybody and any device can authenticate to any server.

So this becomes an any-to-any model, not dissimilar to other standard structures that you'd like to see emerge in the marketplace. We do not want a proprietary mechanism where you get a tight link, where this device must authenticate to this server and only this server or only to this piece of software on the other end. You want an open structure between the devices and the users and the servers and the applications to which they're trying to connect. We think a Web service-based approach is the right way to go here.

Tech Update: So which of the two, Liberty or Passport, do you think leans more in that direction?

Mills: We'll have to see how this evolves here. We know what design is the right design. We know what this should look like. We know what the end result is and what we're seeking. We have a lot of dialogue going here in this space with all the right people.

As you know, we've worked with Microsoft on Web services. We've made announcements over the last couple of years with them. This is a logical element of Web services. So, obviously we're talking to Microsoft extensively on what the Web services interfaces should look like to enable this capability. We're continuing that dialogue, and it's important to us. We think that Microsoft's participation in an open standard is fairly critical here. With so many of the devices enabled to Windows, it's fairly undeniable that you have to have a Windows-based open mechanism to do this.

We also talk to the customers and other vendors that are part of Liberty.

Tech Update: Any upcoming announcements?

Mills: We'll have to see. These things are percolating. Nothing is boiled yet.Tech Update: Some people see Passport and .Net My Services as the key to another Microsoft monopoly. Do you see it that way?

Mills: I don't believe that the past is prologue to the future. I think that there were unique conditions that led to the dominance of Windows and, even more particular, to the dominance of Microsoft Office. This is a $220 billion software industry. Last year, Microsoft's share of that was less then 10 percent. They're an important player to be sure, but there are lots of spaces and domains in this industry and a disproportionate percent of all of Microsoft's total revenues comes from these unique franchises in Windows and Office.

When you look beyond that, you find that they are a much smaller player in all the other critical spaces--transactions, databases, true line-of-business applications. It's disproportionately skewed to … literally two [products] if you think of Office and Windows as products. Some 99 percent of all systems that use a desktop productivity suite run Office. It's a bigger franchise than their Windows franchise. That's unique, but it's not going to repeat itself. This is not a market that seeks homogeneity; it's a market that seeks choice and only falls back to homogeneity when conditions force it. It's not inherently human nature to want one thing, one choice.

There are more servers on the Web that are not Windows servers. Most of the world's transactions do not run on Windows servers. They run on Unix servers and IBM mainframes. So, the preponderance of real, valuable activity is not occurring in the Windows world. It's occurring in other worlds.

Microsoft wants to play in these other worlds and to get a piece of that, it's going to have to deal with using open standards for identity and authentication and data access and all these other pieces. Otherwise, their business is isolated to that entry point of the client, and businesses are not going to allow Microsoft to control their relationships with their customers. Customer identity is a relationship that you as a bank or a retailer have with me. My relationship is with you, not Microsoft. We need to have standards and structures that make it possible for me to have that relationship with you and vice versa and extend it and so on. It's not going to be vendor-controlled. It's just not going to happen that way.

Tech Update: What are your customers saying?

Mills: They're not going to do it. It's not going to happen that way. So there will be a move toward open standards in this space. It's just a matter of how long it takes and how many iterations we must go through to get there.

I think Microsoft is going to play a key role in whether it settles out quickly or not. The Liberty Alliance obviously serves as a catalyst. It throws down the gauntlet. Just look at the name. The gauntlet has been thrown down to say, "No, no, there is not going to be a proprietary way--there is going to be an open way." This is going to be a very interesting year to see how this evolves.Tech Update: I just want to circle back to something you said earlier--that a year from now, we were going to see some significant improvements to the way collaboration is embedded as a feature. Did I miss an announcement?

Mills: Well the portfolio continues to evolve. We have matured and added significant features to technologies like WebSphere and DB2 that provide us with an opportunity to further connect the Tivoli technologies. Some elements of Tivoli will now come over to the WebSphere infrastructure for better integration of the tooling. And in 2003, we'll be delivering a revamped version of Notes, which in fact builds on top of WebSphere and uses some of the native XML services of DB2 to provide a more scalable, flexible, and open collaboration environment than the Notes business we have today.

So we're reaching that point, as you do with all technologies, where you have to go through a major renovation. You typically invent something and you do incremental modifications to it. Sometimes you can evolve it very seamlessly, and in other cases, you reach a juncture where you realize you've got to make some deeper underlying changes.

Tech Update: So, does this come after Release 6, which is due later this year?

Mills: After this year's R6 deliverable, the next version will be a WebSphere-based version. Notes is 80 percent middleware today. It already has some WebSphere and pieces of DB2 embedded in it today. But it's fundamentally built on the Notes file system, which is a late '80s design point.

Tech Update: So you're replacing the whole underlying data store?

Mills: Throwing out the whole infrastructure and revamping the data storage. We have flexible schema-mapping capability in DB2 today, so we can map the Notes file systems and we can map XML natively. You can use alternative syntax like XML to actually access the data that sits in DB2 today. So that capability in DB2 now is allowing us to pull out the old Notes file structure and insert the DB2 infrastructure.

Tech Update: And you can put in a whole Web services interface on top of any discrete collection of data or embedded procedure?

Mills: Right. Almost all commercial applications today use an underlying relational store. And the Notes file system is not an easy thing to integrate into those applications. Once we get on to DB2, we'll have a much easier time making seamless collaboration work effectively around existing applications, so I can more easily apply collaboration.

As [Lotus General Manager] Al [Zollar] pointed out, collaboration is not an application. It's a feature of all your applications--CRM, procurement, ERP, HRMS, etc. The collaborative infrastructure behind that feature remains invisible.