IBM executive explains company's buying spree

Deborah Magid discusses the thinking behind company's software strategy

So how are those relationships established?

We may get to know them, explore some customer engagements together. We're very customer-focused and require our business partners to be. We use a lot of open-source [software] and open [application programming interfaces], since integration is so important, making sure companies we partner with take similar approaches.

Where are the hotbeds of technology development these days?

I have been spending a lot of time in Ireland, interestingly enough. Maybe that will be illustrative. The Irish government has business development agencies to not only bring business into Ireland but to grow new businesses. They put seed money into brand-new companies and a lot of software companies around Dublin and biotech companies around Galway. I was just there last month with Steve Mills, head of our software group.

What other regions are hot?

Eastern Europe, for sure. There's no doubt that there's a lot of skill and entrepreneurship going on there, in places like Estonia, Slovenia, Hungary, the Czech Republic. The other place that's interesting now is South Africa. This is another region where the private equity and venture capital market have grown a lot in the last 18 months. There are a lot of Internet services companies [there].

What types of technology companies have you looked at in China?

In China, we've looked at things related to our hardware business, such as blades, servers and semiconductors. This is another area where there are lots of Internet services businesses. We haven't done business with them yet. We're also tracking a lot of what's happening with games developers, given its impact on our chips business.

Are there aspects of Latin America that interest you?

There's quite a bit of activity in Brazil, specifically. Brazil is one of the more active markets, with a lot of software skills and Internet businesses.

The data management space seems to be popular destination on IBM's acquisition trail. Are there certain areas where IBM is looking either to fill a product or functionality gap or to move quickly into an emerging market?

I think the important trend now is what happens with analytics and BI. The use of information to run businesses has become much more sophisticated, much more semantics involved. Not just for business, but for government and homeland security. We're expanding the reach of what we sell into government and other businesses.

For example, we bought a company called FRD in early 2005 to help gaming companies look for people or employees who were being fraudulent -- looking at information based on their relationships. It's now in the information management business. Now, homeland security agencies can use this to look at relationships between people and information about people who might be terrorists.

You have degrees in cognitive psychology from the University of Pennsylvania and the University of Connecticut. How have you been able to apply that in your role at IBM?

I started out doing human interface design, understanding how customers use computers, what's meaningful to them. That's pretty useful right now. Analytics, data management and semantics are all relevant right now. I'm also aware of body language in meetings since I was trained to look at the world that way.

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