First Takes from Rational Innovate 2010

To paraphrase Firesign Theatre, how can you in two places at once when you’re not anywhere at all? We would have preferred being in at least two places if not more today, what with Microsoft TechEd in New Orleans, IBM Rational’s Innovate conference in Orlando, and for spare change, PTC’s media and analyst day just a cab ride away.

Rational’s message, which is that software is the invisible glue of smarter products, was much more business grounded than its call a year ago for collaborative software development, which we criticized back then as more like a call for repairing your software process as opposed to improving your core business.

The ongoing name changes in the conference reflect Rational’s repositioning, which the Telelogic acquisition closes the circled. Two years ago, the event was called the Rational Software Development Conference; last year they eliminated the word “Development,” and this year replaced “Software” with “Innovate.” Vanishing of Software from the conference title is consistent with the invisible glue motif.

Software is the means, not the end. Your business needs to automate its processes or make better products in a better way. Software gets you there. As IBM’s message is Smarter Planet, Rational has emphasized Smarter Products rather than “Smarter Business Processes. It’s not just a matter of force fitting to a corporate slogan; Rational estimates compound annual growth of its systems of systems (ergo, mostly the Telelogic side of the business) to be well into the double digits over the next 4 – 5 years, compared to a fraction of that for its more traditional enterprise software modernization and IT optimization businesses.

Telelogic played the starring role for Smart Products. The core of the strategy is a newly announced Integrated Product Management umbrella of products and services for helping companies gain better control over their product lifecycles. Great lead, but for now scant detail. IBM’s strategy leverages Telelogic’s stakehold with companies making complex engineered products with other assets such as IBM’s vertical industry frameworks. We also see strong potential synergy with Maximo, which completes the product lifecycle with the piece that follows the product’s service life.

IBM’s product management strategy places it on a collision course with the PLM community. IBM lays claim to managing the logical constraints of product development – coming from its base in requirements and portfolio management. By contrast, IBM claims that PLM vendors know only the physical constraints. The PLM folks – especially PTC – are developing their own counter strategies. For starters, there is PTC’s plan to offer Eclipse tooling that will start with its own branded support of CollabNet’s open source Subversion source code repository. Folks, this is the beginning of a grudge match that for now is only reinforcing the culture/turf divides demarcating software from the more traditional physical engineering disciplines.

Rational also introduced a workbench idea which is a promising way to use SOA to mix and mash capabilities from across its wide portfolio to address specific vertical industry problems or horizontal software development requirements. The idea is promising, but for now mostly vision. These workbenches take products – mostly Jazz offerings – and mash them up using the SOA architecture of Jazz framework to create configurable integrations for addressing specific business and software delivery problems. We saw a demo of an early example that provided purpose built integrations that provided role-based views for correlating requirements to functional and performance tests, through to specific builds that would be accessed through tools that BAs, testers, and developers use. On the horizon, IBM Rational is planning vertical workbenches that apply Rational tools with some of its vertical industry frameworks addressing segments such as Android mobile device development, cybersecurity, and smarter cities.

The idea for the workbenches is that they would not be rigid products but instead configurable mixes and matches of Rational and partner content, through interfaces developed through OSLC, IBM’s not-really-open-source community for building Jazz interfaces. A good use for IBM’s varied software and industry framework portfolio, it will be challenging to sell as these are not standard catalog products, and ideally, not customized systems integrations. Sales needs to think out of the box to sell these workbenches while customers need assurance that they are not paying for one-off systems integration engagements.

The good news is that with IBM’s expanding cloud offerings for Rational, that these workbenches could be readily composed and delivered through the cloud on much shorter lead time compared to delivering conventional packaged software. Aiding the workbenches is a new flexible token licensing system that expands on a model originated by Telelogic. Tokens are generic licenses that give you access to any piece of software within a designated group, allowing the customer to mix and match software, or for IBM to do so through its Rational Workbenches. IBM is combining it with the idea of term licensing to make this suited for cloud customers who are allergic to perpetual licensing. For now, tokens are available only for Telelogic and Jazz offerings, but IBM Software Group is investigating applying it to the other brands.

So how do you cost justify these investments for the software side of smarter products? Rational GM Danny Sabbah’s keynote on software econometrics addressed the costing issue based on Rational’s invisible glue, means not end premise. We agree with Sabbah that traditional metrics for software development, such as defect rates, are simply internal metrics that fail to express business value. Instead, Sabbah urges measuring business outcomes of software development.

Sabbah’s arguments are hardly new. They rehash old debates over the merits of “hard” vs. “soft,” or tangible vs intangible costing. Traditionally, new capital investments, such as buying new software (or paying to develop it) were driven by ROI calculations that computed how much money you’d save; in mist cases, those savings came form direct labor. Those were considered “hard” numbers because it was fairly straightforward to calculate how much labor some piece of automation would save. Savings are OK for the bottom line but do nothing for the top line. However, if you automated a process that would allow you to shorten product lead time by 3 weeks, how much money would you make with the extra selling time, and by getting to market earlier, how much benefit would accrue by becoming first to market? Common sense is that all other factors being equal, getting a jump in sales should translate to more revenue, and in turn, bolster your competitive position. But such numbers were considered “soft” because there were few ways to scientifically quantify the benefits.

Sabbah’s plea for software econometrics simply revives this debate.