IBM’s Software Guru Is Calling it Quits


Steve Mills, the IBM veteran who transformed that company’s software strategy, is retiring.

The news is hardly a surprise. Mills, joined Big Blue fresh out of Union College in 1973, according to his official bio and is thus, after 43 years with the company, closing in on retirement age.

A year ago, Mills was promoted to executive vice president for IBM Software and Systems, reporting directly to IBM chief executive Ginni Rometty, whom he advised on software and hardware issues. But for years up till that point, he had helped shape what became the IBM (IBM) Software Group.

Going back to 1995, when IBM formed its Software Group, Mills played a key role, at first supporting then senior vice president John M. Thompson. In 2000, he himself was named senior vice president of that group.

A big chunk of Mills’ job there was corralling many dozens of product and research groups that all had their own ideas about what technologies to use.

WATCH: IBM CEO on most disruptive technology.

“That was not easy because he inherited fiefdoms both in products and in research each of which had its own language, its own middleware, its own database of choice. He had to fight that battle of getting them on the same page,” said long-time IBM watcher Judith Hurwitz, founder and chief executive of Hurwitz & Associates, a Needham, Mass.-based IT consulting firm.

“Steve set a mandate: ‘No, you won’t use that database for your product, you’ll use DB2.’ He had to fight that battle and people fought him back tooth and nail and he won,” Hurwitz said. DB2 is IBM’s own database that competes with Microsoft (MSFT) SQL Server and Oracle’s (ORCL) database.

Mills, she added, was also able to look at the strengths and weaknesses of all IBM technologies and identify gaps where an acquisition could help.

MORE: On IBM Software.

In this quest, Mills helped IBM move its software business from a bewildering array of hundreds products into four basic brands—Lotus for communications and collaboration; WebSphere for middleware or the software glue that ties together different layers of technology; DB2 the aforementioned database, and Tivoli systems management software. The Rational Software tools acquisition happened later to add a fifth brand.

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Mills also helped guide IBM’s $4.9 billion acquisition of Cognos in 2007 that it used to parlay a shift from being a database provider per se into offering what it started calling “business intelligence.” That is a higher-value (ie. more profitable) category as database sales became increasingly commoditized.

During Mills’ tenure, IBM acquired more than 30 software companies. Ingesting all those piece-parts and making sense of them in a single company context was not for the faint of heart. The net result is there’s still a lot to be confused about, but the overall lineup makes more sense now than it did 20 years ago.

A former IBM insider also credited Mills with pushing the company to embrace Linux, the open-source operating system that now runs on everything from mobile devices to IBM mainframes.

Suffice it to say it was not easy to persuade IBM to back what was essentially a free operating system for hardware that it sold for millions of dollars at a pop. But it did so, and analysts now credit the use of Linux as helping to keep mainframes relevant.

But critics would note that IBM let Amazon (AMZN)Web Services take an uncontested lead in cloud computing starting in 2006. IBM’s early efforts in cloud were roundly dismissed, and were the reason IBM was forced to buy SoftLayer, the cloud and hosting company IBM bought three years ago for $2 billion.

IBM skeptics’ chief complaint is that the company has been more focused on financial engineering for the past decade by prioritizing stock buybacks and promoting unrealistic earnings projections rather than building great products. And Mills, who headed the software group for so long, bears some responsibility for that although most criticism has been directed at former IBM chief executive Sam Palmisano.

In 2010, Palmisano sought to boost shareholder confidence by promising that IBM would achieve $20 annual earnings per share by 2015, a goal that no one outside of Armonk, N.Y., believed to be credible.

Still, Mills will be missed.

Lance Crosby, co-founder and former chief executive of SoftLayer, said working with Mills was an education.

“In my two-year stint at IBM, I had the privilege to work directly with Steve and learn from one of the all-time best,” Crosby wrote on his Facebook page.

“From his photographic memory to unstoppable work ethic to his hands-on customer style—Steve left everything he had on the field every single day. I’ve met very few people who go 110% at all times and Steve was one of those.”

Who knows? Crosby, who last year launched a new security startup called StackPath, may end up bringing Mills aboard over there.


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