Analyst Notes from IBM’s Maximo World 2007

Analyst Notes from IBM’s Maximo World 2007

Almost a full year after the acquisition of MRO Software (See IBM's MRO Acquisition: Good News For EAM Implementations), IBM hosted the 21st annual Maximo user event in Orlando, Florida this week. Last year, we noted concerns that the EAM product enhancements would not be a high priority under the Tivoli umbrella. A year later, IBM has responded with a string of announcements proving a clear commitment to the product line.

A few highlights:

• Al Zollar, GM for IBM Tivoli, announced that there has been a 50% increase in year over year development spend for the Maximo products. This has allowed them to expand into new markets like Japan as well as build out solutions for emerging verticals like life sciences and transportation.


• Jack Young, VP of Maximo Development, walked us through some key investments in new vertical areas. One notable area is the renewed commitment to the nuclear power industry. I view this as a direct move to monopolize on any loss of momentum experienced by Indus as they merge their company with MDSI to form Ventyx. Note: Indus has been recognized as owning the market share of nuclear EAM customers. If IBM plays their cards right, they should be able to pluck a few key accounts looking for an upgraded solution as Indus adjusts.


• IBM also announced the introduction of two new solutions for government and service providers. These are two good examples of initiatives MRO Software had on the radar before the acquisition but never made it through funding prioritization. Now, with IBM’s deeper pockets, these solutions have been revisited and it gives Maximo a real competitive edge. As companies look to modernize their architectures and move away from legacy systems, more and more will consider the hosted option. Companies like ABB and Johnson Controls are well positioned to capitalize on this opportunity using the hosted Maximo solution.

On the topic of asset class ‘convergence’ across IT and enterprise operations:

Al Zollar noted in his presentations that convergence is all about breaking down silos and giving c-level executives a unified view into both IT and operational assets both from a financial and efficiency perspective.  This sounds great but none of the EAM buyers we’ve talked with purchased the solution with this in mind. Yes, they all recognize that increasing, many of the operational assets in a manufacturing plant are high-tech devices. However, what convergence really means to them is the centralization of asset management across more than one location (facility), giving them the ability to benchmark best practices, come up with common procedures, and move to a state of more predictive maintenance (See Next Generation Enterprise Asset Management). This is how IBM can make convergence relevant to their actual end users. This often comes down to solving cultural, governance, and political issues – not limitations of the software.  In an attempt to elevate EAM to a higher level buyer to stimulate buying in what is really a very mature software space, I’m concerned IBM is losing sight of this.

A final observation:

One reason EAM end users report not getting a ROI on their solution investment has been the difficulty interfacing the solution to legacy ERP apps, most commonly SAP. I expected IBM to put more time and energy into packaging up a supported out of the box interface toolkit and methodology to make this easier. Before the acquisition, MRO worked to achieve Netweaver certification but there has been very little movement on this front since. This could be because of the sometimes competitive, sometimes cooperative relationship between SAP and IBM. Notably, I could not find an IBM executive at the event who could give me a concise answer to what their strategy is for dealing with SAP on both fronts specific to this product line (and believe me I asked everyone from the Tivoli GM down to mainline consultants). This leads me to believe that IBM does not have a SAP strategy at this point, view SAP as a competitive EAM threat, or really feel their customer’s integration pains. When these same customers start jumping ship and going with SAP’s Service and Asset Management solution to complement their ERP suite, maybe someone will take notice. Based on the conversations we are having with CIO level decision-makers, this is not as far off as some IBM executives would like to think.  None of these companies are struggling with interfacing IT and enterprise asset management solutions today so convergence is not a differentiator for IBM over SAP. Most users report using only 20% of the available features / functions, so the best-of-breed debate is dead. In my view, a clear vision of how IBM can interoperate in an SAP ecosystem and a commitment to solving the Maximo integration woes is IBM’s best answer to losing EAM market share to the ERP goliaths. 

Patrick Connaughton | Senior Analyst - Supply Chain
Forrester Research