CIO UK: Does the rise of cloud mean the death of the mainframe?
Bill McCracken: I think there are cycles and particularly when a new technology comes out the discussion usually comes back to what is going to happen with mainframes, but I think the mainframe will continue to be a major driver in the industry. It continues to be a major part of our business so I don't see it going away. It's not growing fast, no more than 2 per cent. So, it's about $2.5bn in terms of revenue in the mainframe for us, against in the enterprise we have low double-digit digit growth.
So cloud services can drive mainframe usage?
We see the mainframe being used in cloud implementations. One of the best ways to change the utilisation of mainframes is a private cloud implementation. We did that ourselves internally. So about three years ago, we changed our test environment. We went to a cloud implementation because we have about 35,000 developers and when they went to test-time they would have to wait as much as a week to get the resources, which was a major productivity barrier. We installed a cloud application to the test environment and now it's ours. What it did is it took advantage of all of our mainframes we had around the world and brought everything together so we were able to reduce from the week to a number of hours.
How will cloud services impact on what businesses do with technology internally?
When I joined this industry the real value was in the application but in today's world, the application holds a little bit less value and here's why. If you wanted to do an ERP system you can get it from Oracle, you can get it from SAP, you can get it from so many places so the challenge is how fast you can get it up and running in your location. And the answer is you get it running more quickly because it's in the cloud. We are a great example of that. When I joined the board of this company back in 2005 and we did not have sales data about this company. We were not going to have sales data about this company for a couple of years. We were pulling SAP in around the world and converting everything to SAP, so all our resources were dedicated to that and they were not available to put sales reporting in place. One of our board members said why don't we install salesforce.com and two months later we were getting that sales data.
How do you think your customer base is likely to change in the next few years?
I think there's a lot of change going on in the industry and I think service providers could be a big part of our business going forward, because they provide services around the technology that customers need but we don't provide and we don't plan to provide. Our customers need them but it's oftentimes specific to their industry and to be able to provide that support you need to be an IBM. Our effectiveness in the marketplace is enhanced by partnering with many service providers, systems integrators and so on so it's a major trend in our business and how we reach our customers. I think the reach of a partner program now is in the high single digits now. I think that will approach a third of our business over the next couple of years and grow beyond that as well.
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