IBM Makes All-Out Product And Services Play For Midmarket VARs

IBM is addressing what Marc Lautenbach, general manager of global small and medium business at the company, called a $300 billion small and midsize market. More than 50 percent of the revenue in the market is spent on services, Lautenbach said. "We are in this to serve what we believe to be an underserved market," he said.

The move to beef up services for the channel came only days after IBM provided principles of engagement to its solution providers (see related story).

The new services and products are already being offered to solution providers targeting the midrange space, which IBM defines as companies with 100 to 1,000 employees.

They are being sold under the Express brand name, said Elaine Lennox, director of marketing for small and medium business at IBM.

Such products and services are designed according to a number of criteria, including ease of installation, which Lennox defined as the ability to be installed with no more than five clicks of a mouse. Other criteria include being easy to use, easy to manage and modular so that they can scale as the customer's business grows.

Express-branded products and services will be sold through IBM's channel partners and were developed with input from them, Lennox said.

IBM this week also introduced two new software offerings for midrange solution providers.

The first, WebSphere Commerce Express, is aimed at helping midsize businesses quickly and easily create and manage e-commerce sites, said Mark Ouellette, vice president of worldwide small and midsize business software sales at the vendor.

Such businesses should be able to use the software to start building an online store within an hour and a half, Ouellette said. Pricing for the software, expected to be available in September, should be about $20,000, with a similar solution from Microsoft costing about $26,000, he said.

Also new is WebSphere MQ Express, an application that makes use of Java and XML to allow multiple applications to share critical data, said Ouellette. It is expected to be available late this year with a starting price of $4,180, he said.

Also coming this fall are Item Synchronization Express, which allows vendors and customers a gateway to connect to each other; Content Manager Express, for the storage of electronic documents; and Runtime Beta, which makes its easier for midsize businesses to write and test business applications, Ouellette said.

IBM this week also started bundling its previously announced WebSphere Portal Express software with an xSeries 255 server and FAStT storage equipment with the Linux operating system and suitable for 20 users at a price of $35,000, said Mark Shearer, vice president of eServer products in IBM's Systems Group.

The IBM eServer Integrated Platform Express for Employee Workplace is aimed at companies with 100 to 250 employees looking to handle content management, integration and security--including authentication and authorization--in a single bundle, Shearer said.

The company plans to offer a similar bundle for its iSeries servers in the near future, he said.

In addition, IBM is offering a new series of 13 desktop and notebook PCs under the Express name and priced specifically for midrange customers, said Frank Vitagliano, vice president of channels marketing for IBM's Personal Computing Division.

Included are five new desktops that have Pentium 4 processors running at up to 2.6GHz, 40-Gbyte hard drives and the company's ThinkVantage self-managing and self-healing technology. They are priced from $699 to $849. The company also introduced eight mobile PCs, starting with an ultraportable model with 1.4GHz processor and 12-inch screen, said Vitagliano. Pricing runs from $1,299 to $1,799.

The new pricing reflects the difference between enterprise and midrange PC markets, Vitagliano said. "In the enterprise, all transactions come about by special bid," he said. "With our prices, customers and business partners can immediately recognize the value."

All these products and software can be combined with services from IBM Global Services (IGS) delivered via solution providers, said Mary Garrett, vice president for small and midsize business at IGS.

New this month is the Wholesale Distribution Solution for SAP, a service that also uses DB2 Express and WebSphere Express. Garrett said IGS can get this service up and running in a guaranteed 10 weeks for a fixed price of $300,000.

This new service for IBM's channel partners joins the previously announced Services Anywhere Select, a flexible management service for equipment installed at the customer's premises, said Garrett.

Also available is Infrastructure for Server Management Entry, an entry-level service for hosting a customer's e-business infrastructure in an IBM data center, Garrett said. In addition, IBM is offering hosted CRM solutions based on the Onyx marketing and sales-force automation application in a service called Application Hosting for Onyx.

IBM also plans to introduce a number of services based on J.D. Edwards applications this September, Garrett said.

These services are available to solution providers to resell, ISV partners to wrap with their applications and systems integrators to do the integration, said Garrett. "It's a tough market, and partners should focus on what they are good at," she said.

IBM Global Financing (IGF) is also making a midrange channel play with new pricing and enablement strategies, said Thomas Eckstrom, director of small and midsize business and channels for the organization.

IGF is the world's biggest financing company, with about $35 billion in revenue, said Eckstrom. Between 25 percent and 35 percent of the company's overall financing volume comes from the small and midsize space, and 30 percent of the overall volume goes through channels, he said.

New this week is an aggressive pricing strategy, said Eckstrom. "We are pricing to win," he said. "We are giving partners rate cards which are aggressively priced with actual customer pricing. We almost never deviate from the rate card because it's hard to customize in this space."

IGF is also making it easier for solution providers to sign contracts with midrange customers, Eckstrom said. This is done by offering them quick pricing, contract preparation and delivery, and settlement, he said.