IBM Aims at SMB Growth

IBM Corp. announced the pilot of its new Blue Business Platform solutions this week, aimed at simplifying the delivery and management of applications for small- to medium-sized (SMBs) businesses using both on-site and cloud-based computing capabilities. Additionally, the company also unveiled several new security and risk management services to help midsized businesses address emerging threats.

Focal Points:

• IBM is aiming at the heart of the SMB space with its Blue Business Platform offering. It hopes to help its software business and its independent software vendor (ISV) business partners more easily deliver and manage software solutions using a new open platform and Internet technologies. According to the company, it is going after the $500 billion SMB marketplace and a targeted one million clients worldwide ranging in size from five to 500 employees. IBM hopes thousands of software and solution providers will sign up to participate in the new business transaction and delivery mechanism, as it expects to radically reduce the cost of attracting, obtaining, maintaining, and delivering solutions to SMB customers. The Blue Business Platform includes an Application Integration Toolkit that includes a set of open standard interfaces that can conjure up services including applications, systems management, and remote data protection in addition to the open marketplace upon which the applications and services are offered. IBM is said to be working with Google Inc. to build the supporting global network of servers and services.
• The first product offered as part of the Blue Business Platform is IBM Lotus Foundations start, which will be available this quarter. The product is delivered as an on-premise software server that includes anti-spam, anti-virus, backup and recovery, directory services, file management, firewall, and Lotus Notes and Domino mail and collaboration. The appliance is said to be deployable within a 30 minute window and features self-management functionality that minimize the need for IT support. IBM expects to pilot the Blue Business Platform throughout 2008 as it works to build out the network and collaborators, with the aim of reducing application and service cost, complexity, and support requirements for SMB customers.
• IBM has further entered the software-as-a-service (SaaS) fray by launching its security-as-a-service offering under its Express Advantage product offering set. The new managed service is delivered by IBM's Internet Security Systems (ISS) team, which was acquired when the company purchased ISS in August of 2006. Available either as a managed service or an on-premise offering, IBM is offering several new and improved product sets that it aims to help combat the $100 billion annually online fraud and hacking industry. Products include fully managed security bundles, a penetration testing service, server protection services, and a Payment Card industry (PCI) offering to protect credit card information in compliance with the PCI Data Security Standard.

Experton Group believes IBM's new managed services offerings and global reseller/solution provider marketplace exemplifies the direction in which a majority of IT solutions will be offered in the future, and follows the business model of other successful Internet-based businesses. Time-consuming, expense software installations and customizations have long been the bane of all businesses, and the software-as-a-service model allows customers to greatly reduce cost, complexity, and the management burden to IT providers. This removes the majority of the risk associated with getting an application or applications up and running, and provides vendors with a channel upon which existing and new services can easily be added and/or updated to service emerging customer needs. Experton Group expects that all corporate software users – whether they are small or large in nature – will increasingly look to the Internet as a delivery and support mechanism for software and management services that they lack either the resources or desire to support. While there will always be a role for software deployed at a corporation's site, Internet-based services can offer lower costs given specialization and economies of scale. IT executives should investigate and continue to adopt SaaS models where appropriate – particularly in areas where there exists no competitive advantage in having customer-deployed solutions, such as non-core business processes.