IBM

Historical notes on computer giant IBM’s efforts in software. Related subjects include:

November 17, 2013

Software delivery and pricing — the first 55 years

The commercial computing, software and services industries have existed for half a century or so each. It might be interesting to review how their pricing and delivery models have evolved over time.

1960s and 1970s

Modern IT is commonly dated from the introduction of the IBM 360 mainframe in 1964-5. But even before then, there was a growing industry in what we’d now call outsourced services, specifically in payroll processing; major players included Automatic Data Processing (ADP), the company that gave us Senator Frank Lautenberg, and a variety of banks. This was (and to this day remains) a comprehensive service, priced by unit of work (e.g., number of payroll checks cut).

IBM mainframes, which quickly came to dominate the market, were in the 1960s and 70s commonly rented. IBM software that ran on them was hence typically priced on a rental/subscription basis as well. The independent packaged software companies, however, often preferred to get paid up front,* and hence sold perpetual licenses to their software. Annual maintenance fees for the licensed software started in the range of 10% of the perpetual license or even less, but migrated up to today’s 20-22% range.

Read more

April 29, 2013

DBMS acquisitions

Recently I expressed doubts about Actian’s DBMS-conglomerate growth strategy. For context, perhaps I should review other DBMS vendors’ acquisition strategies in the past. Some — quite a few — worked out well; others — including many too minor to list — did not.

In the pre-relational days, it was common practice to buy products that hadn’t succeeded yet, and grow with them. Often these were programs written at enterprises, rather than third-party packages. Most of Cullinet’s product line, including its flagship DBMS IDMS, was came into the company that way. ADR, if memory serves, acquired the tiny vendor who created DATACOM/DB.

Then things slowed down. A Canadian insurance company oddly bought Computer Corporation of America, to utter non-success. (At least I got an investment banking finder’s fee on the deal.) Computer Associates, which did brilliantly in acquiring computer operations software, had a much rockier time with DBMS. It acquired Cullinet, Applied Data Research, and ASK/Ingres — among others — and didn’t have much growth or other joy with any of them.

Indeed, Ingres has been acquired three times, and hasn’t accomplished much for any of the acquirers (ASK, Computer Associates, Actian).

I used to think that Oracle’s acquisition of RDB provided key pieces of what became Oracle’s own extensibility technology. Andy Mendelsohn, however, disputed this vehemently — at least by his standards of vehemence — and his sources are better than mine. Rather, I now believe as I wrote in 2011:

… while Oracle’s track record with standalone DBMS acquisitions is admirable (DEC RDB, MySQL, etc.), Oracle’s track record of integrating DBMS acquisitions into the Oracle product itself is not so good. (Express? Essbase? The text product line? None of that has gone particularly well.)

Experiences were similar for some other relational DBMS pioneers.  Read more

October 2, 2008

A bit of DB2 history, per IBM

I meant to put up a longer post some months back, reproducing some of the 25th anniversary DB2 history IBM provided, courtesy of Jeff Jones and his team. Seems I didn’t get around to it. Maybe later.

Anyhow, I ran across the following concise info, from a January, 2003 web page posted by (who else?) Jeff Jones: Read more

July 30, 2007

Setting the record straight

Computerworld got software industry history a bit wrong by implying that John Cullinane innovated packaged software (specifically, they said “packaged application”). Here’s what really happened, as I learned soon after becoming an analyst in the early 1980s:

February 9, 2006

Prerelational DBMS vendors — a quick overview

IBM. With BOMP and D-BOMP, IBM was probably the first company to commercialize precursors to DBMS. (BOMP stood for Bill Of Materials Planning, foreshadowing the hierarchical architecture of IMS.) Out of those grew DL/1 and IMS, IBM’s flagship hierarchical DBMS, and the world’s first dominant DBMS product(s). Of course, IBM also innovated relational DBMS, via the research of E. F. “Ted” Codd, then some prototype products, and eventual the mainframe version of DB2. To this day DB2 on the mainframe remains one of the world’s major DBMS, as does the separate but related product of DB2 for “open systems.”

Cincom. In the 1970s, Cincom was probably the most successful independent software product company. Its flagship product was Total, a shallow-network DBMS that was a little more general than the strictly hierarchical IMS. What’s more, Total ran on almost any brand of computer hardware. Cincom remains independent and privately held to this day.

Cullinane/Cullinet. Charlie Bachman innovated a true network DBMS at Honeywell, but it didn’t turn into a serious product at that time. B. F. Goodrich, however, ran a version. This is what John Cullinane’s company bought and turned into IDMS, which at least on the mainframe supplanted Total as the technical, mind share, and probably revenue market leader. Cullinet (as it was then called) ran into technical difficulties, however, losing ground to the more flexible index-based DBMS. It was eventually sold to Computer Associates.

A lot of software industry leaders cut their teeth at Cullinet, notably Andrew “Flip” Filipowski, later the colorful founder of Platinum. Other alumni include Renato “Ron” Zambonini, Dave Litwack, Dave Ireland, and the original PowerBuilder development team. John Landry and Bob Weiler ran the firm for a while toward the end, but they don’t really count; rather, they’re the most prominent alumni of applications pioneer McCormack & Dodge.

Note: Index-based is a term I used in and probably coined for my first report in 1982, comprising both inverted-list and relational RDBMS, as opposed to the link(ed)-list hierarchical and network products such as IMS, Total, and IDBMS. The companies that beat Cullinet were long-time rival Software AG, and then especially Applied Data Research; then all three of those independents were blown out by IBM’s DB2. And then the whole mainframe DBMS business was in turn obsoleted by the rise of UNIX … but I’m getting ahead of my story.

Software AG. Like Cincom, Germany-based Software AG is a 1970s DBMS pioneer that has always remained independent and privately held. Sort of. Twice, Software AG of North America was spun off as a separate, eventually public company. Software AG’s flagship DBMS was the inverted list product ADABAS. SAP’s MaxDB was also owned by Software AG for a while (and seemingly by every other significant German computer company as well – or more precisely, by Nixdorf where it was developed, and by Siemens after it bought Nixdorf).

I actually visited Software AG in Darmstadt once. Founder Peter Schnell and key techie Peter Page were both gracious hosts. Schnell was proud of their new building, and especially of the hexagon-based wooden dual desks he’d personally designed. General analytic rule – when the CEO is focused on the décor, this is not a good sign for the company’s near-term prospects. (I call this having an “edifice complex.”)

Applied Data Research (ADR). ADR is often credited as being the first independent software company, having introduced products in the late 1960s and prevailed in antitrust struggles against IBM to allow the business to survive. Basically, it sold programmer productivity tools. This led it to acquire Datacom/DB, an inverted-list DBMS developed in the Dallas area. In the early 1980s, Datacom/DB began to boom, and was on a track to surpass both IDMS and ADABAS in market share until DB2 showed up and blew them all away. ADR was particularly aided by its fourth-generation language (4GL) IDEAL, which was an excellent product notwithstanding the famous State of New Jersey fiasco. (As John Landry said to me about that one, “4GLs are powerful tools. In particular, they allow you to write bad programs really quickly.”)

ADR was an underappreciated powerhouse, boasting all of the Fortune 100 as customers way back in the early 1980s (yes, even archrival IBM). When the DBMS business stalled, however, ADR was quickly sold — first to Ameritech (the Illinois-based Baby Bell company), and soon thereafter to Computer Associates.

Computer Corporation of America (CCA). CCA’s DBMS Model 204 may have been the best of the prerelational products, boasting an inverted-list architecture akin to that of ADABAS and Datacom/DB. The company was also interesting in that it was first and foremost a government contract research shop, and hence did all sorts of interesting prototype work that sadly never got commercialized. In about 1983 it became that the company wasn’t going anywhere, and it put itself up for sale.

I was personally instrumental in that decision. Our investment banker pretended he was considering taking CCA public. CCA President Jim Rothnie showed us revenue projections. I asked how he had gotten them. He replied that he had taken the market size projection 5 years out, assumed 10%, and drawn a “plausible curve.” However, I quickly got Socratic with him. “How many salesmen do you have?” “How much revenue does the average experienced salesman produce?” “How many experienced salesmen do you expect to have next year?” “How high do you think their average productivity can grow?” “Let us multiply.” (Yes, I really said that. I can be a jerk. And anyway Jim was the sort of analytic guy one can say that to without giving serious offense.)

CCA was sold to a Canadian insurance company whose name I’ve now forgotten. Eventually, it was spun back out (perhaps after some intermediate changes of ownership), and resurfaced as primarily a data integration company, called Praxis.

In the real old days (mid 1970s, perhaps), Model 204 was resold by Informatics (later Informatics General, later the hostile takeover that became the guts of Sterling Software, which like so many other companies was eventually absorbed into Computer Associates). I know this because Richard Currier used to sell the product when he worked at Informatics. That probably makes Richard and me about the only two people who still remember the fact.

Hmm. I forgot to mention Intel’s System 2000. Well, truth be told it was a dying product even back when I first became an analyst in 1981, and I recall nothing about it, except Gene Lowenthal’s observation that Intel had had trouble selling chips and DBMS through the same salesforce. I think Al Sisto, who I probably met when he was head of sales at RTI (Relational Technology, Inc. — later called Ingres), came out of that business, but I’m not 100% sure. I remember Pete Tierney from that RTI management team more clearly anyway, although that’s mainly because we stayed in touch at subsequent companies over the years.

November 14, 2005

Ingres memories

The news about Ingres being spun off by Computer Associates brings back a lot of memories. First of all, Ingres (then called Relational Technology Inc.) was one of the centerpieces of my first-ever research trip to the West Coast in April, 1982. Second, the day CA’s acquisition of Ingres closed, Charles Wang (CA’s CEO, of course), called me personally and asked me to consult to CA about their forthcoming product strategy. It was an intense, month-long project, perhaps still the single largest one I’ve ever done.

So with no further ado, here some observations of and about Ingres through the years.

I think I’ll go write about the rest of the story over in the DBMS 2 blog.

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