IBM Unveils Software for Medium Biz

NEW YORK — IBM is moving aggressively to court new customers in the small to medium-sized business market with “express” packages of software, hardware, services, integrated platforms and financing.

During a press briefing Wednesday, IBM executives from across the tech giant’s major divisions outlined the offerings, which are scaled down, or express, versions of some of its flagship enterprise products. They include e-business software WebSphere Application Server Express, database software DB2 Express, Web development software WebSphere Portal Express and its integrated xSeries servers running the Linux operating system.

“This is not a one-size fits all strategy,” said Marc Lautenbach, general manager of IBM’s global small and medium business division. “There’s no shoe-horning” the products into customers’ systems, he said.

The offerings, he added, are part of an integrated strategy that not only help smaller businesses deploy information technology quickly and for fewer dollars, but also fit in with IBM’s approach to providing computing services on-demand as the customer’s computing needs scale up and down.

The announcement is the latest in a series of moves the Armonk, N.Y. vendor has made to position its products for small to medium-sized businesses, which IBM estimates spend about $300 billion on information technology annually. Of that market, some fifty to 60 percent goes to buying solutions, not just an operating system or hardware separately, but on components together, Lautenbach said.

Wednesday’s products are designed to address the growing mid-market customer segment, where Microsoft is the dominant vendor. They are clearly aimed at undercutting Microsoft’s prices. IBM executives said the new software would be priced as much as 25 percent lower than Microsoft’s for key products such as databases and Internet business software. They also promised lower pricing against Oracle’s database applications compared to its own DB2 Express for small businesses, which is aimed at businesses in the employee-range of 100 to 1,000.

Highlighting the announcement was WebSphere Commerce Express, a package
customers can use to build e-commerce Web sites. The software takes
developers from catalog and storefront creation to merchandising,
relationship marketing, and payment processing. Available September 30, pricing begins at $20,000, which includes a processor license for production and pre-production staging, as well as one seat of WebSphere Commerce-Express Developer Edition.

As a new messaging middleware offering, WebSphere MQ – Express makes it easy to connect a variety of different applications together so businesses can efficiently share data across their disparate platforms. WebSphere MQ – Express will be generally available in the fourth quarter for $4,180.

Big Blue also said its Integrated Platform Express is a hardware/software package geared for busy offices that need to improve collaboration and messaging, such as a physicians’ office tracking incoming patients, how long they are waiting, and which physician the patients are waiting to see. It includes Linux-based portal software that relies on IBM’s eServer xSeries 255 line of hardware, and the ability to consolidate business applications using its middleware WebSphere Portal Express.

The price for the platform, which is aimed at offices with 100 to 250 employees, starts at $35,000 for 20 users.

Ultimately, IBM said it intends support WebSphere Portal Express for Linux
on its POWER microprocessor architecture, and to deliver an employee
workplace solution on both eServer iSeries and eServer pSeries platforms.

Redmonk Senior Analyst Stephen O’Grady discussed the import of IBM’s new Express offerings, noting that it targets two main channels — direct to SMBs, and via ISVs and channel partners.

“They each have different purchasing priorities; smaller enterprises, for example, while
very price sensitive are also just as concerned about the installation process, so IBM’s vastly simplified that,” O’Grady explained. “ISVs, for their part, are going to be sensitive to price, obviously, because higher costs force the price of their own products up. But they’re also worried about reliability, performance, etc. – particularly for solutions where IBM’s products are embedded, as this will often determine how well the ISV’s solution will perform.”

O’Grady said IBM has done a fine job of addressing problem areas “rather than just taking
their enterprise level products, stripping out half the products and boxing it up as an SMB solution.”

Financing for IBM’s Express products includes a low-rate financing solution
that makes it more affordable for medium-sized businesses to install and
upgrade Express software. This also includes the ValuePlan Lease to provide
certain businesses with a short lease contract.

To support the new offerings, IBM will offer services including packaged
implementation, infrastructure support and managed services for medium-sized
businesses as part of its Global Services Express Portfolio.

IBM has already launched a few Express software products
including WebSphere
Application Server Express
, WebSphere
Portal Express
and DB2
, which is priced at $499 for a base server package, with an
additional licensing cost of $99 per user.

The company is serious about this movement, too, embarking on an a $200
million advertising campaign focused on industry trade journals to promote
its software.

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