IBM To ISVs: Choose Us, Not Microsoft

IBM Software insists that it--not Microsoft--is the ISV-friendly partner of choice since it doesn't offer its own applications and doesn't lock partners into proprietary software architectures. IBM partners that develop to J2EE standards will always be free to move to other infrastructure vendors should IBM deviate from its strategy, said Scott Hebner, vice president of strategy and marketing for developer relations at IBM.

And the company has 70 new ISV partners, many of which came from the Microsoft world, said Hebner. This is just the latest salvo in an increasingly heated battle between the two powers for ISVs, especially in the midmarket (see story).

IBM Software exited the software applications business five years ago and has been recruiting ISV partners since that time. In its efforts, the company--along with some outside observers--said it has been aided by Microsoft's own applications business, which is extending beyond desktop applications such as Office to core ERP, finance and CRM applications.

Of course, IBM has some evangelizing to do. The ISV push comes largely in the SMB market, which IBM defines as companies with 100 to 1000 employees. IBM is typically stronger in larger enterprise accounts, observers say. The SMB market, on the other hand, is squarely in Microsoft's wheelhouse.

But Hebner said the company's new SMB effort, lead by its "Express" products, is changing all that. IBM's DB2 Express and WebSphere Express are tailored and priced for smaller companies.

"We're seeing a resurgent IBM in terms of brand. Five years ago it was all about OS/2, and we kind of shot ourselves in the foot. But now we have some middleware products, we're doing better in servers and we have a sincere focus on ISVs," he said.

Among newer members of IBM's six-month-old ISV Advantage program is Logo Business Solutions, a large Turkish ISV that doubles as a big Microsoft distributor in Turkey, according to IBM. Other program members include Friedman Corp., Deerfield, Ill.; and Strategix, a U.K.-based company, both of which opted to use WebSphere-based infrastructure over Microsoft .Net, IBM said. Another new partner is Callidus Software, a White Plains, N.Y.-based developer of incentive compensation management applications that ride on WebSphere, DB2 and IBM eServer pSeries hardware. IBM has said that it wants its ISV Advantage partners to lead with IBM solutions in more than half of their business.

"IBM has assured us that they don't compete with their partners. That's reassuring to a company like ours, that there'll be an open, mutually beneficial relationship. With Microsoft, one doesn't get that feeling. Their move into business apps just underscores that," said Philip Brittan, chairman of Droplets, a New York-based ISV allied with IBM.

Van Symons, president of Clear Technologies, a Dallas-based CRM ISV, concurred. While his technology works with Microsoft's e-mail and other offerings, he said committing to Microsoft's .Net architecture could lead to lock-in. "Microsoft talked to us about converting to .Net, but that actually limits us. %85 If we do that, we're locked into Intel only. %85 We find IBM to be much more of a partner. With Microsoft, it seems more like a 'we want to purchase your installed base' conversation. Sleeping with Microsoft is like sleeping with a tiger."

Those are the kinds of comments that drive Doug Burgum, senior vice president of Microsoft Business Solutions, crazy.

Burgum, who was president of Great Plains Software when Microsoft acquired it, maintains that Microsoft's entry into business applications does not put it at odds with third-party ISVs. He disputes reports that the company is repositioning its business applications to be more ISV-friendly. "There is no repositioning. This was the strategy we had the day we got acquired. Microsoft loved how [Great Plains] built its ISV community," he said.

Microsoft has said its nascent Microsoft Business Framework (MBF) will be made freely available to third parties to boost their development. It will include base-level functionality that many ISVs would not want to duplicate, Burgum said. Their use of MBF foundations will let them innovate further up the stack, he said.

In a series of announcements this week at its Partner Momentum conference in New Orleans, Microsoft is expected to outline new programs designed at recruiting ISVs and keeping existing partners in the fold.

But even Microsoft insiders acknowledge that the company has to prove itself to ISV partners after several ill-fated programs. Many Microsoft partners speaking off the record acknowledge that they are wary of the company's product plans, which they see will be competitive with their own offerings in the future if not now. Many cite an attempt by Microsoft years ago to recruit ISVs to write vertical capability atop Microsoft Office. That effort failed, leaving ISVs complaining that Microsoft left them no room to add value.

For more on Microsoft channel changes, see story.