By Charles King, Pund-IT, Inc.
The news on Monday that Steve Mills, IBM’s EVP of Systems and Software, has retired was a hell of a way to kick off 2016. Personally speaking, Mills has been one of IBM’s most familiar faces during my entire time as an IT industry analyst. But far more important has been the ways in which he affected the company over the past 20 years, a period in which IBM fundamentally altered its focus as a business and organization.
The event signaling that shift was IBM’s launch of its eServer strategy in 2000 which compartmentalized and rebranded the company’s four disparate server platforms. But central to that effort was a fundamental refocusing on the role that software played in differentiating the capabilities and value of those platforms. Mills had been a senior executive in IBM’s Software Group (SWG) long before that, but his appointment as the group’s SVP in 2000 provided him a role that he had both the energy and imagination to take it to the limit.
IBM’s evolutionary shifts came at a critical time, as the company recognized fundamental changes impacting its own business and the greater IT industry. Consider that in 2000, IBM’s total hardware revenues ($37.8B) handily beat those from its global services ($33.2B) and software ($12.6B) organizations. Today, partly due to a massive, continuing commoditization of computing hardware, those positions have virtually flip-flopped. But while Global Services are IBM’s chief revenue generator, SWG has become its leading driver of profit margins.
Under Mills’ leadership, IBM SWG grew by leaps and bounds, became a leader or contender in enterprise solutions and focused on key development efforts, including numerous open source projects and its recent crucially important product design efforts. After becoming SVP of both IBM Software and Systems in 2012 (and EVP in January 2015), Mills worked diligently to enhance margins and lower expenses in those businesses.
This included controversial decisions, particularly in the Systems organizations. Those included selling the company’s System x (Intel-based) server organization to Lenovo and divesting its microprocessor manufacturing facilities to Global Foundries. But Mills also:
- Expanded development of IBM’s core z Systems mainframe platform (whose sales continue to grow year over year),
- Embraced unconventional strategies for IBM Power (such as open sourcing the Power architecture and co-founding the OpenPOWER Foundation), and
- Acquired key technologies for IBM Storage (including purchasing flash storage vendor Texas Memory Systems in 2012).
As a result, while IBM is certainly feeling many of the same pressures plaguing other system vendors, the company has mostly stabilized or grown its hardware margins and sales (accounting for those divestitures).
For IT industry analysts, Mills was a fount of both wisdom and humor. Not surprisingly, he knew IBM and its customers inside and out. But Mills also deeply understood the company’s competitors and willingly discussed them in often unvarnished terms. In fact, Mills’ unscripted Q&A sessions highlighted numerous IBM analyst conferences, eliciting both laughter and heightened perceptions of the subjects he addressed.
The phrase “smartest person in the room” is a cliché, especially in a technology industry that enjoys more than a fair share of bright people. But it’s also a sobriquet tailor made for Steve Mills. His willingness to share his knowledge and experience, and to use sometimes sharp-edged humor to its best instructive ends made him, in my estimation, one of IT’s brightest and best executives.
At the company’s Analyst Relations Forum in November 2015, Mills noted, “At IBM, I’ve lived with nothing but transition. The opposite of that is believing you have achieved perfection.” No career is perfect and none lasts forever, but Mills’ latest transition is one that leaves IBM and the wider technology industry a poorer place.
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