IBM Eyes SMBs With 'Foundations' Servers

IBM Lotus is making a major push into the small and mid-sized business market, debuting Monday a line of hardware/software server packages called Lotus Foundations and a set of software-as-a-service applications that IBM will rely on the channel to sell to customers with 500 or fewer employees.

Lotus unveiled the new initiatives at its annual Lotusphere conference in Orlando where it also announced a development effort with SAP to link that company's business applications with Notes, new "mashup" development tools, and details of upcoming releases of Notes/Domino, Symphony, Quickr and Connections.

"Historically, it's been hard for small companies to take advantage of what IBM has to offer," Lotus general manager Mike Rhodin said during his keynote speech. At a press conference later he said Foundations and the new software-as-a-service offerings, being developed under the code name "Bluehouse," are "a major expansion of our strategy in to SMB."

The Foundations servers will be sold primarily through Lotus channel partners targeting SMB customers with between five and 500 customers and will compete head-to-head with Microsoft Small Business Server. The servers are based on Lotus software and server packages from Toronto-based Net Integration Technologies (Nitix) that IBM announced last week that it is in the process of acquiring for an undisclosed sum.

Taking a cue from Apple CEO Steve Jobs, who debuted Apple's new ultra-thin "Air" Macintosh at last week's MacWorld show by pulling it from an interoffice envelope, Rhodin did the same onstage at Lotusphere, pulling a Foundations server from an only slightly bulkier package.

The first Foundations server, due to ship later this year, will offer a range of collaboration tools and other software including e-mail, file management, directory services, fire wall, backup and recovery, and office productivity software. Lotus executives briefed channel partners attending Lotusphere about the new product on Sunday.

A Foundations communications server is also in the works with others to follow, some incorporating software from ISV partners, Rhodin said.

The Bluehouse software-as-a-service offerings will provide on-demand collaboration tools for SMBs, such as the ability to share files, initiate online meetings and manage contacts. Rhodin said the first contact-management software-as-a-service app is now available on a beta test basis.

Lotus also expects to offer the Bluehouse services through its channel partners, but Rhodin said the company is still working out the details, such as pricing and sales practices, given that the whole software-as-a-service business model is still evolving.

IBM is in the midst of a broad effort to restructure its sales operations and channel programs to regain momentum in worldwide SMB IT markets that are expected to total $550 billion this year.

Rhodin said Foundations and Bluehouse are components of that effort. "This is clearly an extension of the strategies IBM has been announcing over the course of the last few weeks," he said during the press conference."

Sunday Robert Wong, Lotus director of worldwide SMB, channels and software-as-a-service sales, told business partners Sunday that sales of IBM Lotus products through the channel are growing faster than direct sales and the executive urged resellers to take advantage of that momentum.

"With the [product] portfolio we have right now, plus the announcement of Foundations, you have probably one of the richest portfolios in decades," Wong said. He exhorted channel partners to expand their sales efforts beyond Lotus Notes/Domino and sell them other Lotus software such as the Sametime instant messaging/web conferencing software and Quickr collaboration application. "You need to move out of your comfort zone," he said. "Learn to link value across the product portfolio."

IBM Lotus is also seeing growing interest from SMBs in software-as-a-service offerings, Wong said. He pitched channel partners on providing hosted versions of Lotus products arguing that they provide a recurring revenue stream that is more profitable over the long term than installing on-premise applications.

This article has been updated