Q2) Why is an Alliance with the Linux Development Community Potentially attractive to

IBM? What could IBM accomplish in conjunction with the community that it can’t
accomplish on its own?

IBM always had the strategy to supply hardware, software and professional service to its
client. Its clients always looked out for mission critical software as well as the day-to-day
information flows within their corporations and have always looked at IBM to supply them a
close to fail-safe system at a reasonable cost. However, the time has been changing now,
the world had migrated to ISP, ASP, dot com startups and now has different priorities than a
typical MIS department.

Customer priorities have changed to speed, being flexible and the ability to innovate and
scale using internet. They migrated swiftly from being Risk Averse client that IBM previously
had. Therefore, access this new growing market, IBM needed to grow its software and
middleware business and migrate it to a neutral platform, one that would not be dependent
on proprietary products being supply by Microsoft, Oracle or other competitors. In nutshell,
Linux was the ultimate open standard that supported the requirements of the customers. It
was a system that supported computing functionality independently and was available to all
to read and implement without royalties or fees.

IBM on the other hand had very less experience of dealing with OSS. It has always
established a productive arrangement with “Apache Community”, However, Linux was
entirely different from it. Hence to be the customer centric organization, it was required for
IBM to have and alliance with Linux Development Community.

Things that IBM could achieve in conjunction with the community that it can’t achieve on its
own are as follows:
 The idea supported IBM’s strategy of supporting open standards. It was also a
neutral platform not being owned by any other entity. It would have been fairly
difficult for IBM to develop that individually hence should have formed an alliance
with the community.
 Linux was already gaining a lot of popularity with the customers since it was being,
hence to achieve that it should form an alliance with LDC.
 OSS as a model can be viewed by anyone and modifiable by the licensee without
violating the copyright. Such transparency would have helped IBM to a larger cost
saving and easy upgrade for users and system integrators.
Q4) What are the risks and benefits of collaborating with the community? What barriers
stands in the way of a successful alliance?

RISKS
Linux software development and support
appeared very Ad-Hoc. Users can’t look out
for a software vendor to solve their issues.
Linux long term sustainability was always a
risk.
There wasn’t a trusted base which could
control the base, it was just handled by
Linus Torvalds and handful of trusted
lieutenants.
IBM never had any connection with Key
Lieutenants, hence it never had any control
to “commit” code to official Linux releases.
BENEFITS
It was a neutral platform, not being owned
by any corporate entity. Hence IBM
software could run on Linux without
creating a strategic vulnerability to any
Corporation.
Linux had shown high penetration in Lower-
end server markets. Its performance was
ranked equal to that of Windows. Hence a
collaboration with them could have given a
broader customer base to IBM.
OSS as a model can be viewed by anyone
and modifiable by the licensee without
violating the copyright. Such transparency
would have helped IBM to a larger cost
saving and easy upgrade for users and
system integrators.

Barriers in formation of successful alliance are as follows:

 Alliance structure would have very difficult considering the business structure of
LDC, which is nothing more than a cloud.
 People of LDC were loosely affiliated group of people living at different parts of the
world, IBM being a well-structured company would have faced quite a lot of
difficulties in forming an alliance with them.
 IBM never had any sort of connection with LDC Lieutenants hence it would hinder
the success of an alliance.
 The way in which both companies work independently has very less correlation. LDC
was an OSS whereas IBM revenues and profits are usually derived from Hardware,
middleware and services. Hence, they never had parity in the revenue model which
would create an issue.

Q6) If you are Dan Frey, how do you approach this community? Recommend a strategy and
action plan?

Being in the shoes of Dan Frey, I would approach the LDC as follows:
 Since IBM has already gained an OSS experience with Apache, I would have
approached LDC with an attempt to create an short term alliance on the similar lines
and would show what they have achieved with OSS in the past.
 Depending on the success/failure of this tentative alliance, IBM could leverage the
big Clientele it had and ask for a much-structured alliance by forming a separate
legal entity besides the Core IBM business.
 Making a separate entity would always help IBM to separate its core business from
the alliance. Outcomes of the alliance would certainly help IBM to cate to the change
in demand