IBM Announces On Demand Partners for Midsize Market

Two weeks ago, IBM unveiled its “computing on-demand” strategy, which includes a program designed to help software vendors Internet-enable applications (see Big Blue Moves to On-Demand ‘Fast-Track’). While Big Blue avoided using the term ASP, the plan — which calls for applications to be hosted at one of IBM’s 150 data centers — has strong ties to the ASP world.

Those ties became even stronger last Friday when Big Blue announced the first partners for e-business on-demand applications for medium-sized businesses. The list features three successful ASPs and one independent software vendor (ISV) that has played a significant role in the ASP market:

Employease delivers Web-based human resource and benefits solutions designed to automate administrative tasks and connect HR professionals with employees, managers and external service providers such as insurance companies and payroll vendors.

HRsmart provides “talent management” applications (that are built on IBM’s Linux Virtual Services) for online recruiting and applicant tracking.

Intacct offers Web-based accounting systems for core applications such as general ledger and accounts receivable, and special applications (including auditing and consolidation modules).

Onyx provides marketing and sales force automation solutions that use IBM’s hosting and application services capabilities. IBM claims that it and Onyx are the first to deliver CRM process services in an on-demand model.

For Intacct, involvement in the software on-demand program “gives us a cohesive architecture and the credibility of partnering with the largest service provider,” David Thomas, CEO of Intacct, told ASPnews.

“There are lots of providers, but IBM offers a complete solution — data centers, servers, operating systems, databases,” Thomas said. “We considered Microsoft .NET, but they didn’t offer the hardware.”

Thomas said the process began when Intacct decided to move more and more to IBM Global Services due financial uncertainly in the hosting market. “We were at places like Exodus that were having financial difficulties. We said ‘enough is enough’.”

For Intacct, the relationship with IBM is particularly attractive given that its software is sold through a channel of 400 CPAs, a conservative group that is a natural fit for Big Blue. IBM Global Services will also offer consulting services to Intacct CPA partners.

Thomas said that currently Intacct’s relationship with IBM is based on technology, but “we are moving towards a sales relationship.”

IBM believes its computing on-demand strategy is particularly compelling to medium-sized companies. “It is harder for medium businesses to maintain the skills to keep pace with accelerating technology changes. These companies must also demonstrate an immediate return on their technology investments,” said Marc Lautenbach, general manager, IBM Global Small and Medium Business.

IBM defines medium-sized businesses as those with between 100 and 1,000 employees and quotes AMI Partners research that estimates companies of that size will spend more than $150 billion on IT products and services in the next three years.

Intacct and Employease are listed by ASPnews as Top 20 Service Providers.

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