ISVs Navigate Maze Of IBM Software Relationships

In their battle to wrest independent software vendors away from Microsoft, they maintain, as they will this week again at Lotusphere, that IBM is a better partner for application developers than the Redmond, Wash., giant. After all, Microsoft has its own Sasquatch-like footprint in most applications from word processors to databases to ERP and CRM.

However, when IBM anointed Siebel Systems as its partner-of-choice for "on demand" CRM, the folks at Onyx Software, a rival CRM player with its own IBM relationship, were, understandably, less than thrilled. One can only imagine that PeopleSoft/J.D. Edwards, another ISV partner that also fields CRM applications, was not amused either.

Part of the problem is IBM's sheer size: If IBM Global Services blesses one ISV over another, there may not be much IBM Software can do about it. After all, Somers, N.Y.-based IGS, by virtue of its acquisition of PricewaterhouseCoopers consulting, now fields a group dedicated to Oracle applications.

IBM execs stress that the software group partners with ISVs that are best suited to the vertical it is attacking, especially in its SMB push. They also maintain that even if IBM irritates partners, its J2EE-centric thrust means partners will always have other options.

But just mention IBM's love of ISVs to Gerald Cohen and he rolls his eyes. "I guess that depends on what type of ISV you are," said the chairman and CEO of Information Builders, a New York-based maker of business analytics applications and EAI tools. "Three years ago IBM was our No. 1 partner. That is no longer true," Cohen said. Why the change? Cohen said IBM bought Crossworlds and its EAI expertise to bolster the IBM WebSphere application integration push. So much for partnership.

ISVs say they know they're dancing with an elephant and act accordingly. "We certainly do not cover the breadth [IBM does] so we try to pick the things IBM is doing where they have synergy with us," said Jay Dorenkamp, vice president of technology development at Lawson Software, St. Paul, Minn. When IBM partnered with Retek in retail, "that's one where as Lawson I wish they hadn't done that."

But, it's all relative. "I'd say we have more faith that IBM isn't going to be a threat, or is the least threat, when you look at our other partners,Oracle and Microsoft," he noted.

James Governor, analyst at RedMonk, said IBM Software has done well nourishing ISV relationships. "For now it has a reservoir of goodwill. However, we will know by 2005 whether the firm can really avoid treading on its partners' toes as it sells products including vertical functionality."