The Agenda - Fast Change

From Blue to Purple

Tivoli and IBM joined forces because they needed each other. By 1996, the young company had doubled its annual revenues for four years in a row. But Tivoli was still a David -- a small, overmatched underdog -- compared with Computer Associates International Inc., the aggressive Goliath of the systems-management business. The deal with IBM made this David bigger, stronger, and more resilient. As Todd Praisner, 34, Tivoli's director of infrastructure development, puts it, "We got a steroid injection." Suddenly Tivoli had access to IBM's global salesforce, its abundant technical and R&D resources, and a portfolio of software applications designed to manage mainframe systems.

Since the acquisition, that steroid injection has created a lot of muscle. Tivoli now has 3,600 employees around the world and annual revenues of more than $1 billion. Talk about a blend! The company celebrated its passing of the $1 billion revenue mark with a Tivoli-style party on an IBM-style budget: Lyle Lovett performed private shows for Tivoli's employees, in Austin and in Raleigh, charging a hefty $75,000 per event.

But the lasting impact of the IBM-Tivoli deal is best measured not in terms of numbers but in terms of behavior. Just as IBM has bolstered the young company's business performance, so Tivoli has reshaped IBM's human performance -- changing how IBM's people think, work, and make decisions. Most of the IBMers who joined Tivoli no longer sound like IBMers. Or rather, they no longer sound like what IBMers used to sound like. They say that they work in a new way, with a single-minded focus on their customers and on their competition. They say that they attend fewer meetings. They say that they're free to take risks, that they see the link between their work and the bottom line, that they can raise questions about anything with anyone. It's as if the IBMers in the Tivoli unit work for a different company. And, in a sense, they do.

"When someone asks where I work, I tell them that I work for Tivoli," says Lynn Wilczak, 41, vice president of enterprise R&D at Tivoli, who has been an IBMer for 18 years. "I don't know whether it happened right away or whether it happened when I got my new business cards: My cards don't have the name IBM anywhere on them."

Tivoli's influence is visible in the red Ferrari that rotated to the unit's top U.S. salesperson each quarter in 1998. It's visible in the Texas-style saloon doors at a converted IBM development lab in Rome. It's visible in the free soda (or, in Rome, espresso) that's available in company break rooms. And, reflecting a long-standing tradition, it's visible in Tivoli's Friday-afternoon beer bashes.

It's hard to overemphasize the significance of these Friday gatherings. Since Tivoli's early days, its people have gotten together over beer. (In Rome, employees drink wine.) A typical Friday afternoon would involve a few hundred mild-mannered employees mingling under the trees in a courtyard outside one of Tivoli's offices in Austin, passing around Tivoli bottle openers, emptying six coolers of beer, talking about software. "You wouldn't believe how much work gets done at one of these," one Tivolian remarks. The weekly event creates a unity among the Tivoli staff that's rare in most companies.

Which is why, at the official announcement of the acquisition, back in 1996, one of the first questions that people from Tivoli asked John Thompson, 56, the powerful head of IBM's software division, concerned the beer bashes: Would they continue? The answer was not long in coming: At the next bash, held a few days later, a large banner announced that Thompson had provided the beer.

But Tivoli's reverse acquisition hasn't worked just because an IBM big shot bought some beer. It has worked because rank-and-file IBMers were quick to buy into what Tivoli represented. Despite their loyalty to IBM, people in the company's systems-management unit had grown frustrated with its conflicting objectives: Support IBM products -- but also dominate the market for other products. For these people, working with Tivoli didn't require an uncomfortable adjustment. Rather, it made for a better fit. "These were Tivoli people who just happened to work at IBM," says Martin Neath, 35, executive vice president of Tivoli.

Lynn Wilczak was one of those people. She was the IBMer who made the final presentation to Thompson about buying Tivoli. At the time, she didn't know where she would wind up in the new company. But that wasn't important. She longed for the systems-management group to move faster -- to let it rip, like Mark Martin, the NASCAR driver whose picture adorns her office in Raleigh.

"I will never forget sitting in our first meeting, with Tivoli management on one side and IBM management on the other side," Wilczak remembers. "I was just so excited about the opportunity that when Frank Moss went around the room and asked, 'What do you folks think?' I told him, 'I absolutely love this fast pace. Let's make decisions and go.' "