IBM Software Goes Vertical

The group also said its five product sales divisions will be folded into a single organization under Donn Atkins, worldwide vice president of sales and marketing at IBM Software. The transition will be led by Mark Bishof, the newly named vice president of worldwide industry sales solutions at IBM Software.

Bishof will work with IBM's field teams, product divisions, partners and IBM industry teams to further consolidate the company's industry focus, Atkins said.

"He will take this industry approach and ensure that, one, we are doing the proper integration of products for the industry and, second, we connect with ISVs and partners to make sure we deliver the right capabilities," Atkins said.

Beginning next month, the group will initiate a series of steps,including new middleware, business development and training for its salespeople,that will match domain-specific channel partners and ISVs with IBM's software. The vendor expects the resulting "solution maps" to help its midmarket partners quickly automate business processes for different industries.

Also next month, IBM's Industry Advantage program will offer ISVs a variety of incentives, tools and promotions to better tie applications to IBM's new vertical middleware products, said Mark Hanny, vice president of worldwide ISV alliances at IBM.

The changes,which will occur through next year and affect almost every part of the software group's operations,will include additional partner programs, doubling the number of software account managers working with ISVs and partners, and launching 60 new industry-specific middleware products aimed at business processes, including dealer collaboration in the automotive industry, electronic payment processing for banking, and claims management for insurance companies. IBM will also invest "millions of dollars" to help ISVs and partners go to market, executives said.

"We think IBM's vertical focus will help us," said Theodore Bayer, president and CEO of Syscom, a Baltimore-based solution provider that targets the health-insurance and financial industries.

"Having a handful [of IBM sales reps] working on a specific vertical will make it easier to get our message out to them," Bayer said. "The only people who lose will be the partners who compete with us who don't bring added value."

While IBM executives say this reorganization is the most strategically significant shift since the Armonk, N.Y.-based giant abandoned the applications business in 1999, they also describe it as evolutionary.

"This is really a continuation of a journey we've been on a couple of years," said Atkins, who oversees the 13,000 employees involved in IBM Software's sales, marketing and technical efforts.

Solution providers and ISVs agree. Many say the software group for years has trained a laser beam on specific industries, in the process improving its efforts to build alliances that serve those industries.

One example comes from PureEdge, a Victoria, British Columbia-based developer of electronic forms that sells primarily to U.S. government agencies and insurance institutions. In the past year, IBM's sales organization has introduced PureEdge to Kofax, which provides document-capture software, and to Document Sciences, whose content-processing software helps customers create "mass-customized" written materials.

The three ISVs have created a joint solution aimed at midmarket insurance and financial companies.

"We've developed relations with IBM resellers in every major region," said Mark Upson, president and CEO of PureEdge. "We are the model of how IBM wants this to work."

IBM executives said half of its sales force will have received training on industry-specific requirements by this time next year. Such training will span IBM's product lines,providing a better understanding of how, for example, to combine WebSphere, DB2 and Lotus software for insurance processing.

Another quarter of its sales force will receive that training by the end of 2005.