IBM's Gerstner touts middleware for e-business

Playing to his company's software strengths, IBM chairman Lou Gerstner Monday pronounced Phase I of the e-business era to be over, and said that Phase II will see the rise in strategic importance of "integration and infrastructure" centering around robust middleware.

Speaking at the company's PartnerWorld 2001 conference, Gerstner contended that if companies are to prosper in this phase, they will need to seamlessly stitch together end-to-end solutions by more tightly tying important applications and business processes together.

"How do you become a fully integrated e-business in Phase II?" Gerstner asked the 4000 attendees during his keynote address. "It is through middleware. It starts at the application integration level. More and more of the integration of applications will be handled through automated processes," Gerstner said.

Taking a veiled but characteristic swipe at archrival Microsoft, Gerstner said that in Phase II, operating systems would no longer be the focus for tying critical business applications and processes together. That task better falls to a variety of middleware platforms, Gerstner said.

"In the past the operating system is where things came together. But now there is no hope that any proprietary OS can tie these things together, but middleware can. We want customers to be able to buy any application they need or want and integrate them," Gerstner said.

The other critical factor in companies' being successful is through the deployment and build-up of infrastructure. Gerstner said IBM will invest $US4 billion in helping its business partners, most importantly service providers, to build that infrastructure through "e-sourcing".

"e-sourcing is the natural extension of the traditional outsourcing of products and services over the Web," Gerstner said.

Backing up his point about the need for robust infrastructure, Gerstner said he envisions IBM eventually will deal primarily with "a small number of mammoth services providers", who in turn will sell and service IBM's customers.

Gerstner said, however, that this end-to-end integration and infrastructure would happen a lot more smoothly only if key industry players strongly back standards, something he said IBM would continue to do with a missionary's zeal.

"This [standards] battle is one we all have to win. This is why we have invested millions in Linux and will continue to do so," Gerstner said.

Gerstner said Phase I of e-business centered largely on building front-end applications for business-to-consumer e-commerce and eventually business-to-business e-commerce, where companies were trying to sell users everything under the sun. Many believed, and wrongly so, that this was e-business at its zenith and the quickest way to get rich.

"But now the IPO alchemists have had their 15 minutes [of fame]. We have learned from this Phase I that there is no New Economy and that e-business is just business," Gerstner said.