Steve Mills, the longtime head of IBM's ever-expanding software unit, spoke at the company's Information on Demand conference – the first such event featuring the Cognos-IBM brand – in Las Vegas, Nev. last week. Almost one year after the $5-billion unification of the two companies, OBJ asked Mr. Mills to reflect upon life following the biggest software company acquisition in Big Blue's history.

OBJ: What are your thoughts on the current high-tech climate in Ottawa, and in Canada?

MILLS: We've got a lot of software development going on in Canada, and Ottawa has become an ever-bigger location for us through the companies we've acquired. We've had a presence in Canada since IBM was formed, and our tech-related investments go back many decades for obvious reasons, such as open trading.

But I think what's of equal importance is that Canada has great universities, and a lot of strong technical programs and computer science capabilities. And so we've always seen Canada as a great environment to leverage technical presence.

Ottawa has gotten bigger and bigger – our first Ottawa-based acquisition was Object Technology International in 1992 or 1993, and that was one of the first acquisitions in the software business that we ever made. And I often tease my Canadian counterparts that it gets so cold in the winter, there's not much to do but ice skate and write code. And our Canadian teams are very prolific in how much they write.

OBJ: What's the importance of the new release (IBM Cognos 8 v4) to IBM and Cognos?

MILLS: (We've had) a continuing flow of technology out of Cognos, and we've had a lot of announcements of new Cognos functions since we completed the acquisition last February. We've had some 40 distinct new offerings come out, focused on different types of industry dashboards and analytic capabilities, and that's really what the new version is all about.

And we've got a very strong focus on bringing more of the IBM sophisticated research technologies, which are ideally suited for creating new types of end-user displays, and more ability for the user to manipulate some of these deep algorithmic mechanisms. That's always been a problem with this stuff – it's wonderful math, but you don't ever want the user seeing the math inside. You just want them to see the information organized the way they want to see it, and so we've always needed dashboard capability to provide better manipulation of the deeper analytic infrastructure technologies we have inside IBM. And Cognos has given us that window to the user, that just didn't exist before in our portfolio. So it's been a tremendous lift.

And the enthusiasm within the company, globally, has been greater than any other acquisition we've ever done. IBMers around the world see this as bringing relevancy to their conversations with customers, because the breadth of Cognos functionality allows conversations to be extended ... from customer care to financial management, and performance indicators, and on and on. And so this adaptability of Cognos allows that conversation to move across the entire organization. Over and over, there's yet another framework we can bring in to optimize different parts of their business.

There's tremendous excitement – sometimes I think Rob's biggest problem is containing the excitement.

OBJ: It's the biggest deal you've done in the software division at IBM, which has lately been the company's fastest-growing revenue generator ($5.2 billion in Q3 2008, an increase of 12 per cent over last year). How has the acquisition helped in the revenue department?

MILLS: Well, you've seen our reported results – the software part of IBM's business has been reporting good growth performance this year in a tough economy. So it's clearly been of help to us; there's no question. And there's the short term and long term – a lot of our success this year has been the sustainability of our portfolio overall, but the addition of Cognos has opened doors that weren't open before. Cognos has provided a lot of touch points for us, and has increased the number of people that our message is relevant to.

OBJ: The term 'blue-washing' is sometimes used when acquisitions are brought into the IBM fold. Explain the ramp-up process when you absorb a new company, and in particular during the past several months with Cognos and IBM.

MILLS: Well, the term of 'blue-washing' is used specifically for technology. We're not trying to make the Cognos people blue. And in fact, that's a key part of our model – yes, the technology needs to align because that helps with its value proposition. But on the human side, what they want is the deep expertise and enthusiasm of the company we bought to be sustained. They want all the good stuff – they don't want the people to lose their enthusiasm and energy, and that sense of quest that many tech companies have.

Tech companies talk a lot about changing the world, and that's characteristic of the industry, and Cognos is no exception. So clients still want to deal with Cognos reps, and Cognos development teams, and all those things that are Cognos – it was a company that was very well thought of by customers.

Look, I run a 50,000-plus-person business, and 68 per cent of the people who work in my part of IBM have either been hired or acquired in the past five years. So there's no 'majority,' in that sense. There's not IBMers here, and newcomers there – the newcomers are far more numerous, and we don't make a big deal about using the names of the companies we've acquired. People still talk about Informix databases, and we bought them in the year 2000, and people still talk about Filenet, which we bought a couple of years ago. We're not trying to take away that identity, but rather make that identity part of a larger IBM.

OBJ: What's the prognosis for Cognos's Ottawa operations in the future? Are you keeping things status quo?

MILLS: (We'll) keep going. We're really driven by the market, and for Rob (Ashe, Cognos chief) and his team will be looking at what are the things they need to do, to grow and to make investments. And at some point, the existing team is full up, and you've got to make additions. And Rob, like all the leaders in the software group, will have to examine his options.

(And where we grow) has to do with core competencies, and where we do the work – I mean, many of my products are built in six different locations, all involved in producing the final deliverable. And one lab always has the lead in doing the final packaging and delivering. And Rob's team continue to have that lead for Cognos technologies.

I've been growing in Massachusetts, I've been growing in California, and I've been growing in Canada. And you get all this folklore about growing in India and China, and going to where the cost is low. But all salaries rise to meet the high end of the market - that's the way it is in the tech industry. Canada used to be less expensive, and Canada is now as expensive as the U.S. is. And we knew that when we began to invest heavily in Canada.

OBJ: You've been described as an IBM 'lifer' in the past. How has this helped yourself and your company grow?

MILLS: I've been helping build the IBM company for a long time, and the software business, from where there wasn't much of an identifiable business, a few decades ago, to what there is today. Having been involved in the building of the business, obviously I've been a major architect in driving it to where it is today given my executive leadership role for many, many years in the organization. And hopefully IBM benefits from that – most people think that's true, but time is the true judge of these things.

But for all of us who joined the company (early on), no matter where we joined, we all became a citizen beyond our borders. We all think globally, and it's a change in perspective, especially when your career begins at a local perspective.

Steve Mills has worked for IBM his entire career, and heads the company's software division.