Q&A: IBM's Anne Altman On Succeeding In The Public Sector

Anne Altman knows she has big shoes to fill. As IBM's general manager of global public sector, and thus the successor to highly regarded Robert Samson, who retired in August, she's assumed command of one of the largest and most visible public sector IT channels in the world.

Altman, who was most recently head of IBM's Systems z group, is tasked with steering IBM's public sector growth -- through programs like its Smarter Planet initiative -- at a time when the ways in which public sector entities procure their technology have changed dramatically, and are changing more every day.

Among her other roles, she manages IBM's various public sector division heads, including Todd Ramsey of IBM Federal, Chuck Prow of IBM Global Business Services for Public Sector, Gerry Mooney of IBM Global Fiscal Stimulus and Economic Recovery, and Dan Pelino of IBM Healthcare and Life Sciences.

IBM public sector channel partners told Channelweb.com they have faith in Altman's abilities, however. Many know her from the years she spent heading up IBM's federal practice, and IBM's once-scattered public sector channel as a whole has been a source of great strength for Big Blue in recent years, especially in 2009.

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In one of her first extended interviews since taking the reins a few months back, Altman joined Channelweb.com Assistant Managing Editor Chad Berndtson for a discussion of IBM's public sector position, hot topics like cloud and stimulus, thoughts on how partners should adjust their expectations for public sector IT growth next year, and what the competition could learn from IBM. Excerpts of the discussion follow:

I wanted to get into a lot of what we're going to be seeing from IBM in the public sector in the new year. Obviously it's such a broad program, but I think top of mind, from your own history at IBM, you came from the fed side and that's where a lot of partners remember you. We've talked so much this year about changes in how the federal government procures its technology, so to kick off, I'm curious what you see as what's changed, fundamentally, about selling into fed.

Oh boy, that in itself could be a lengthy discussion! In the last several years so much has changed. When I was running the fed business it was in the last administration, but before the entire economic meltdown and the crisis. Even then, there was an enormous amount of focused procurement around shared systems and efficiency and improving the effectiveness of government. Today, given the focus and pressure, the federal government is focused on reducing budget and increasing mission outcomes. If you think about it, that's also the message across public sector, not just the federal government. In the U.S. specifically, I won't say everyone is bankrupt, but there isn't a government entity that isn't feeling tremendous pressure and pinch in their budget.

For IBM and our partners, it's about creating value through reducing the costs of the government and improving mission outcomes, whether in social services, transportation, public safety, whatever it is. That's the big question. I like to think about the fact that there will be winners and losers in cities and states especially, and in the federal government, based on how they respond to these pressures. You can't keep doing things the way you've always done them and just cut costs and expect to succeed. You have to think differently.

Are we seeing that reflected in a lot of the existing IT contracts? Given the down economy, some of the legacy contractors are up for renewal and it stands to reason that a lot of the procurement officers may be looking at other solutions or other solution providers with fresh eyes. If I'm a smaller VAR or integrator, that says to me, there's a phenomenal opportunity. Is that accurate you think?

I think you're on an interesting point. I would say that governments -- and I'll use that term government broadly whether it's local, regional or national -- are more open to hearing new ideas than ever before. But they're not looking for pie in the sky. They're not looking for untested investments that may or may not yield results. They're looking for integrators to come in and talk to them about why they think they can save 20 percent of their budget and what they can do to deliver performance in different areas. That's what we've been working on with our partners. Take New York for example, where they invested in a real time crime info warehouse that's today been recognized as having helped reduced crime by 27 percent. They're saying, this can lower my cost, and improve my outcomes -- that's a win for me. It's those kinds of things.

With those opportunities for integrators in mind, I wanted to get into some of your goals for growing IBM's public sector practice next year. It's a healthy channel, one of the healthiest in IT for the public sector. What's top of mind for 2010?

I couldn't have imagined a better time to take over the responsibilities for public sector because there are so many significant challenges and the opportunity for profound impact is so great. When I think about 2010, I think about how IBM is going to continue to take much of this vision of Smarter Planet and smarter cities forward and how we're going to enhance and bring new solutions to market.

Everyone right now is focused on how do we stimulate economic growth, and for IBM and its partners, there is opportunity to deploy solutions that profoundly improve the way things work. For those of us who live in the IT world, it means capturing those more technical underpinnings, including things like how do we drive cloud computing in a way that can improve performance in the public sector, or how do we apply analytics to more rapidly address challenges in transportation.

Next: The Promise Of Cloud Computing And The Reality Of Stimulus

Let's take a couple of those areas individually and look at opportunities for integrators. Starting with cloud, obviously it's come up all year, with greater frequency, and in public sector the debates are around how fast cloud infrastructure is going to be a reality and what combination of public and private clouds are we going to be seeing. Your thoughts on cloud and where you see the ripest opportunity?

Having come out of Systems z -- which we think of as cloud in a box -- I liken the whole notion of cloud as this tremendously scaleable and secure environment. Of course it's much more than that, but in public sector, there's huge opportunity in the adoption of the cloud delivery model to improve efficiency and establish a basis for a standard platform for citizens, government, students, everybody. I'll give you a couple of examples.

I was just down in North Carolina and in conversation with a mayor down there, and we were talking about the potential of cloud computing to level the playing field for all students regardless of where they happen to live, rural or metro. Through cloud, you can deliver education materials and you can do things like content delivery in realtime in a way that makes specialized teachers available broadly within a school system. In Pike County in Kentucky, there is a great example of a school district with 10,000 or so students that utilize this model, and they're already seeing that they don't need a lot of technical support on hand to manage individual PCs. We worked with a partner, and over time, as students have access through laptops or other portable devices, they'll be able to locate content. It's very exciting.

We also recently announced our Cloud Academy, and the goal of that is to get educational institutions to collaborate around best practices for cloud and work with our partners to develop frameworks for future cloud computing in education. We're able to offer research grants and other things and IBM can offer a leadership position in areas like this. This is a huge opportunity for growth for us and for the integrator community.

And it's fair to say cloud is definitely a public sector-wide opportunity?

Definitely. Government, education, and certainly healthcare with collaborative medicine, is going to be huge for us. The cloud is becoming an obvious delivery vehicle for capuring, managing and sharing information.

I remember the announcement this month about the Cloud Academy, and it's a good opportunity to bring partners and educators together but it's also a good opportunity for IBM to direct the conversation around cloud, especially for those who can conceive of cloud but don't yet know how to execute. Do you envision similar programs for other areas like state government and healthcare?

Yes. There are already consortiums and collaboration at a number of different levels. I do think folks want to hear what IBM has to say, but also partners want to hear what each other is saying about how to get started, what they've learned and what helped the early adopters take the plunge.

Another topic that's been big this year, and certainly not mutually exclusive to cloud, has been stimulus. Back in the beginning of the year we looked at how the [American Recovery and Reinvestment Act] money would be beneficial to the tech sector. But judging from recent public sector events I've been to and conversations I've had about stimulus, the enthusiasm as waned. Whether it's waiting for the spending or whatever else, what's your take on stimulus and how should integrators be approaching stimulus in the new year?

I think you're right. Obviously the initial enthusiasm for stimulus is gone and there's been in a dip in because it's been slow to roll out and some of the money has been applied in less innovative or less progressive ways, shall we say. But for the IT community and our partners and integrators, there are still a number of high value projects on the docket that'll give a chance to apply stimulus money.

In Mobile, Ala. public schools for example, they've applied economic stimulus funds to help deploy an analytics system, which is something [to which] you might say, analytics, why would they do that? Well, this was used for the teachers and principals and school administrators to have a means of gauging academic performance and gain quicker access to student needs. They hadn't had a tool for that type of critical insight before. So I think there's going to be some great stories heard in 2010 about stimulus driving change for the better like that, and the business opportunities for IT around that.

Do you think a lot of those opportunities will come from deployments such as that one? A school system like that looking toward analytics wouldn't be the first thing I would think of, you're right, but it's a not-so-obvious opportunity.

I do think we're going to see things in less obvious areas. In cities, for example, you hear the phrase "don't just pave potholes." That holds true. In Washington D.C., for example, we're working with a partner, ESRI, with the [District of Columbia Water and Sewer Authority]. I'm not sure this is directly funded by stimulus money, but it's the kind of project where you're not just saying we have 1,000 miles of sewer pipes and whatever -- it's around how do we monitor, track, instrument and modernize the infrastructure so we can track water usage and meter it.

The other thing they're seeing is it's allowing them positive outreach around customer service -- they're able to talk to their people and explain what they're doing. That type of thing can make people feel better about where money is being spent. If cities and states aren't doing that, they're missing out on a huge opportunity to win their populations over and have their people know why their state is progressive and doing the right things.

Next: Changes In IBM's Partner Program

You're managing a public sector channel ecosystem that's enormous and varied. Do you see structural changes at all for IBM's public sector partner program, and as you add to it, what types of partners are you looking to attract?

I don't think I'd say structurally necessarily. My ambition is to ensure we're constantly improving the value and support we provide to our partners, and part of that is rationalizing and articulating a position around very diffcult problems. That involves frameworks, and while everyone has a different definition of framework, I like to think of it as a blueprint that consists of hardware, software and services that meet specific requirements. It's in meeting those challenges that the partners become part of the framework.

We have groups around the world focused regionally, and we have innovation centers to enable partner training and support. Through those centers, we're doing an awful lot of work through workshops and seminars and certifications, and a lot of our partners -- people like Sirius and Mainline and others -- are getting a lot out of it. We'll continue to work on developing resources.

Will we see any changes in the current structure of your unit, which has Chuck's group and Gerry's group and Dan's group and Todd's group all under you?

It's interesting you mention that because we all just spent a day together walking through strategy for 2010. I wanted to make sure we were all on the same path for next year. This is a highly collaborative team and very well integrated, and I'm fortunate enough to have leaders that are committed to the marketplace as much as I am. I don't think you'll see any substantive changes.

You've no doubt had constant conversations with solution providers and integrators in the past four or five months as your fact-finding continues. What concerns are they bringing you? What do they want more of from the program?

I think a couple of things. There's a common concern out there about budgets being down and how that's going to make life harder. That's a half-empty view. I think budgets being down is an extraordinary opportunity for all of us, and my message back on that is that here is our opportunity to bring costs down, deliver better outcomes for x, y or z, and work together. In other words, we can be far more collaborative with our partners and prescriptive with our clients.

The second thing I'm hearing is 'How do I get started?' They want to know how they fit into a lot of these engagements, and how to get the right skills and make an agenda to keep up with those skills. We're sensitive to providing the right avenues to give them the skills they need. I really do think we're going to pull each other along in this area. I spent a lot of time probing my team, and seeing as we're in the first six months, I ask any question I can. If I don't ask it, shame on me.

Next: The Competitive Threat from HP, Dell and Others

Switching gears here, Anne, we've seen HP, Dell, Xerox and others all making acquisitions of services-oriented systems integrators. All of those, especially EDS, have very strong public sector flavor, and for a company like Xerox, suggest expanding into areas where they haven't been previously strong. IBM's global services and public sector being what they are, IBM has been in this game for a long time. How are you and your team evaluating the competitive field?

Yeah, you know I think it's been interesting. They're saying they have to get into the same business that IBM has always been committed to, which is solving the challenges of these clients. IBM has a nearly 100-year history of serving the public sector and I know it's attractive because in an economic downturn, the one thing you learn about government is that it has to continue to operate, and it spends in good times and bad times. But it also doesn't project growth rates that are huge. When the economy turns around, the question I have for these guys is: are you committed for the long haul?

You can't be in government for the short term. Governments won't tolerate having a fairweather friend. They're making investments [HP, Dell, Xerox] but what sets IBM apart is that our investment has been for nearly 100 years in this market and we can leverage the total value of what IBM brings to its clients, with committed teams and deep domain expertise and the R&D work we do every day. All of that is there, and so is a massive services engine that is worldwide in scope. Our partners see that. We'll just have to wait and see how HP, Dell and Xerox do.

Indeed, indeed. Do you think we're going to see continued consolidation in this market? We're not only seeing large vendors buying services-oriented integrators, but there are also integrators getting together through mergers, or sell-offs of pieces of their businesses, or strategic partnerships around things like BPO. More of the same next year?

I would think so. First of all, there's great opportunity right now in how business models are changing, and you're seeing people who are both looking to and willing to change their models to acquire skills and capabilities they don't have. That said, the days of massive acquisitions in this space -- like what you saw in the heyday of federal a while ago -- are probably over. There just aren't that many players anymore. But after that massive acquisition phase, we also saw a divestiture phase as people looked to reconcile their portfolios and realized they had to remove one thing because it prevented them from pursuing another opportunity.

That's the thing: these acquisitions you mentioned weren't around new business models, they were on the idea of needing deep domain expertise and how can I get it fast. If you're buying domain expertise, domain expertise can walk. That's a risk.

As a last point, I wanted to ask a little about the selection process for your role. It's a highly visible position, so can you talk about when it became clear Bob [Samson] would be moving on to retirement and how you threw your hat in the ring?

Candidly, Bob is an extraordinary human being. I've known him for a very long time and he made an enormous contribution to our clients, to our industry, and certainly to IBM. I don't need to tell you that, of course, because he was recognized over and over for that impact.

For me, it's an incredible honor. Like Bob, I spent the majority of my career in positions in and around public sector, predominantly in the federal business. I love it. I get up and I'm proud to be in a position to serve some greater good, you know? IBM has so much to bring to the table here, and I'm thrilled they felt I was the right person to do this. I don't know who I was being evaluated against but I'm honored to have been selected.

You couldn't have picked a more interesting time to come back to public sector, eh?

Absolutely. I'm jazzed about 2010 even though I know it's going to be tough. But it's the best time to show what you're really made of.