What problem?
The word inside Tivoli sounds remarkably different. Company executives say IBM is not unhappy with Tivoli.
"I hope we're in good graces," says Mike Toomey, senior VP for global and midmarket business solutions at Tivoli. "IBM has approved our plan for the year, and our management team has the total backing of IBM. Tivoli is core to IBM's e-business infrastructure."
Moving forward, Tivoli says its solutions are clearly interwoven into IBM's new marketing campaign.
But what ails the company is execution, as exemplified in its failed integration of Software Artistry, say industry experts. Tivoli bought the company in 1998 and late last year sold at a loss its ServiceDesk solution-which grew out of the acquisition-to competitor Peregrine Systems. Peregrine's product is widely installed by IBM Global Services. As part of the deal, Tivoli will resell Peregrine's product.
"ServiceDesk was once hailed as critical to its future as an end-to-end service-management provider," says Jonathan Eunice, president of Illuminata, an analyst firm. "Basically, Tivoli failed to follow the right development plan, and they are losing ground."
In addition, Tivoli has been hobbled by a steady loss of executive and technical talent. The departures in 1999 of Tivoli torchbearers such as Martin Neath, former executive VP, and Tom Bishop, former CTO, were just the beginning.
"There has been some executive turmoil at Tivoli," says Robert J. Labant, chairman of Candle. "I wouldn't want to be at Tivoli with Lou [Gerstner] breathing down my back."
On the strategic front, the company's marketing activities never fanned the right customer fires to fend off competition by aggressive startups such as Micromuse, NetIQ and Procuity, experts say. Those companies developed key point solutions that could work alone or with larger systems-management software.
Those new competitors also zeroed in on key markets like small-to-midsize business, sectors in which Tivoli never got the chance to play.
Partner sales
"They don't have a product fit in our business demographics in the five- to 50-seat company," says Ted Hunter, president of solutions provider Downtime. "We work with Procuity. It's not the high-end super stuff that Tivoli has, but it gets the job done."
Tivoli also has been slow to react to a changed market. Computer Associates, in contrast, has rebranded itself as a company that manages e-business and has loosened its once ironclad licensing agreements.
While Tivoli says its indirect sales increased 50 percent last year, and that its partner relations have improved, service providers say it has a lot to learn and it needs a better pricing model. "They have not been a good partner in the past," says Jim Nichols, VP of operations at Solid Systems.
Tivoli insists it has IBM's backing. The question is, for how long?
