If you’re a subcorporate-size business, expect to get a knock on the door from IBM or one of its resellers over the coming year.
The company is rolling out products under the Express name, a range which promises faster installation at better prices. Worldwide, Big Blue is putting $US500 million a year into marketing, education and incentives for business partners. It’s offering them higher commission rates, 10% to 18% depending on volume, for sales into small and medium-sized (SME) organisations and will pay for some close partners to get tech training — if they pass.
As for the SME products, the WebSphere Portal Express, launched in October, is typical of what can be expected. It’s on five CDs and can be up and running in 45 minutes, according to Richard Smith, IBM’s SME regional head. At $US25 a seat a company can have a full-featured portal product — offering content management, collaboration and website analysis — for about $US2000.
But can a cheaper version designed for smaller firms ever be full-featured?
IBM insists the products are not “cut down”; their features were decided on by a group of customers and integrators who were sequestered for about a month. They decided what was key to smaller businesses was price, ease of use and the ability to modify and scale up if necessary.
This they can do, says Smith, as the enterprise version is based on the same code. It’s only user numbers reach 1000 that prices get hiked.
IBM is already making headway in the SME market in the region. Smith says the company has sold 1500 copies of Portal Express in Asia-Pacific. It claims 18% year-on-year growth for the past calendar year in Australasia. Growth in the SME software business in New Zealand was 35% in 2002 — presumably from a small base relative to the company’s traditional enterprise market — outstripping Australia. At present, growth is coming largely from existing customers, says IBM New Zealand software head Lisa Buchan.
Only once the company’s partners get into full direct sales drive — starting to knock on the doors of customers that IBM admits it doesn’t know so well, selling them bundled “solutions” that meet needs rather than standalone products — will we see the full extent of IBM’s strategy success and the pain of its competitors.
Broatch heard about IBM’s SME plans in Shanghai, where he travelled courtesy of the company.