Whatever Happened to IBM's Software Factory?

| About: International Business (IBM)

Dennis Byron submits: Whatever happened to the Factory of the Future? GM MAP and all that stuff? And whatever happened to the Software Factory?

Well on the Factory of the Future question, Google (NASDAQ:GOOG) didn’t turn up much written after 1990. I suspect it all happened with a different buzzword a la the way artificial intelligence is all around us but no one dares whisper the term AI.

But I don’t think IBM (NYSE:IBM) has forgotten about the Software Factory and I think it wants to own the machines that run the Software Factory of the Future. The December 11, 2007 IBM announcements about new Rational capabilities is just an example. It means there are some legs in the software development tools market despite the open source software [OSS] development trend. While heavily funding OSS as a tactical move vs. Microsoft (NASDAQ:MSFT), IBM is really thinking long term to the Software Factory.

A big part of my research agenda is OSS, but I am constantly amazed at what a cottage industry OSS development is. I don’t mean it literally takes place in homes per conventional wisdom (in fact it is completely dominated by IBM and other leading IT supplier funding) but it is still highly individualistic (which means full of errors that no one else can correct because they don’t know what the individual that made the error was thinking).

That fact means that software development today is still figuratively where shoe manufacturing was in the 1860s when my great grandfather beat leather around a last in what is now my sister’s kitchen. A generation later his son (not my line of the family which is why I think for a living rather than make something useful) founded Plymouth Rubber to make soles and heels with a machine. Is the software industry still a generation away from automating the manufacture of its piece parts?

If so, IBM looks like it plans to be there. Of course, given IBM’s overall business strategy of building up its IT services businesses and becoming more of a management services provider, you constantly have to ask whether it will spin Rational back out the way it has spun out PCs to Lenovo (OTCPK:LNVGY) and so forth. You never say never but in the short term, the answer is probably no.

PCs had truly become a commodity. Because of OSS, software is almost the opposite of a commodity. Even layers of the software stack such as application/web server software that I have dubbed commodity still offer dozens of choices. Rational development tools give IBM a leg up on everyone else in the services business in dealing with these choices. Almost everyone else in the services business such as HP (NYSE:HP) and even in higher layer parts of the software industry is highly dependent on OSS for their tooling. Or, like SAP (NYSE:SAP) they still have to build their own tools.

This recent Rational announcement tells me IBM’s services guys do not want to be caught sitting in a little shoe shop waiting for the leather guy to drop off a hide.