IBM ISV boasting more than marketing hype

By Kate Evans-Correia, Senior News Editor 25 Feb 2004 | Search400.com

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As IBM gears up for its annual PartnerWorld conference next week in Las Vegas, the company is once again touting the growing number of business partners it has.

The company announced today that 200 ISVs have joined ISV Advantage. Companies that joined include numerous Microsoft developers, who IBM claims are converting to Big Blue technology. Among the ranks: AlphaNova, a London-based CRM vendor, and KhiMetrics Inc., a Scottsdale, Ariz.-based provider of retail revenue management solutions.

What users get is the difference between a suit off-the-rack and a finely tailored suit. Charles King analyst, Sageza Group

While the message is clearly targeted at resellers and developers, experts say that IBM's push to advance its independent software vendor (ISV) base definitely benefits the end user, especially those in the $300 billion SMB (small and medium-sized business) market.

IBM recognizes that, as huge as it is, it can't possibly meet the specific vertical needs of the businesses it is trying to attract, said Charles King, an analyst with Mountain View, Calif.-based Sageza Group. IBM's software strategy is that ISV specialists are the ones that understand those users in a way that it can't. By partnering with ISVs and resellers, who are making sure their products run optimally with IBM hardware, IBM can produce 70% to 80% of the solution and leave the important details to the ISVs.

"What users get is the difference between a suit off the rack and a finely tailored suit," King said. "There are countless numbers of users that get by with an off-the-rack solution, but it also means they'll use a fraction of what the solution offers. Ideally, with IBM-backed ISVs, users are more likely to go out the door with a finely tailored solution."

IBM launched the ISV Advantage initiative nearly a year ago. The program designed to provide midmarket ISVs, including those serving the iSeries space, with technical and marketing support to help meet the specific needs of SMB customers.

Since then, the company has announced a major expansion of the program, which will now include vertical markets and programs with ISVs to promote Linux and WebSphere.

Currently, more than 70% of ISV Advantage participants are actively supporting IBM's software on Linux, IBM said.

Robert Hale, director of information systems at the Santa Barbara, Calif.-based staffing company Select Personal Services welcomes the backing of IBM.

Select, which has about 50 offices most of them in California, is moving its web services from NT to Linux running Apache because Hale said he "didn't want to be at the mercy of any one vendor anymore."

"It's too dangerous of a position," he added.

His current reseller is an IBM partner and it was one of the reasons Hale decided to make the move to Linux and use this reseller.

"Because they have the backing of IBM," he said. "You can actually call a company with the expertise. It's great to have them backing open source. It's like we're on their team."

Critics argue that IBM's strategy is simply about taking market share from Microsoft, which dominates the SMB market. Others contend that IBM sees an opportunity that's ripe for the picking and, if the end user benefits, so much the better.

By the end of 2004, Microsoft is expected to discontinue support for Windows NT and stop distributing security patches. That means that about 2 million customers will have to develop migration strategies. IBM is going to target executives who are in charge of migration strategies by providing free NT-to-Linux migration classes for resellers, ISVs and other business partners. The added expertise could help Big Blue and its partners nab those indecisive NT customers for IBM, experts say.

"They're offering an alternative to Microsoft," said Mike Sheffey, CEO of Santa Barbara, Calif.-based Versora, an IBM business partner and an ISV specializing in open source management tools.

But users also get the benefit of a big-name brand and its expertise, which is important to many small businesses that are unsure about moving off Microsoft architecture.

Corporations that are making a technology move want the big-name company, Sheffey said. "It's even more scary with open source," he said.

People are ready to make a change, but they're not clear on what they should do.

"From a partner perspective, we have this large company with lots of resources," he said. "It's why ISVs are getting excited. IBM can help us sell our stories."

IBM is sending out a message to the ISV that they're paying attention to the customer, King said.

"IBM is saying: 'As big as we are, we're not smart enough to do it all, but we are smart enough to work with people who can help you do it," King said. "What better IT big brother can you have? But, at the end of the day, the letters 'IBM' will be on the outside of the box."

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