IBM Takes ISVs to the Web

Thursday Sep 30th 2004 by Dan Muse
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As small and mid-sized businesses start to explore new options for software delivery and pricing structures, IBM announced that it is stepping up its efforts to work with independent software vendors to help them offer their wares as Web-based services.

The jargon has changed a bit over the years. There's ASP-delivered software, software-as-a-service, Web-based applications, hosted software, software on-demand ... the list goes on. Whatever you call it, the hosted application model — in which you pay a monthly fee to access via a Web browser applications and data that resides in a data center — hasn't been widely deployed among small and mid-sized businesses.

But that may be changing. It could be due to the convenience of anytime, anywhere access to your applications and data, maybe it's the predictability of fixed monthly pricing, perhaps it's the freedom from having to install new version of applications. Whatever the reason, SMBs may be ready to tap the benefits of Web-based software, according to IDC, a Framingham, Mass.-based research firm. IDC predicts that sales of subscription-based and hosted software will grow at 17 percent and 26 percent, respectively, through 2007.

IBM agrees that SMBs are ready to move their applications to the Web and it's working largely behind the scenes to help software vendors that serve the SMB market to bring their products to the Web. Big Blue today announced that it is working with more than 60 independent software vendors (ISVs) and application providers to offer their software as a service to their SMB customers.

The relationship is good news for SMBs themselves. Trusting a third-party with valuable is not something that comes easily to any business and they will most likely find some comfort in knowing that their applications and company data are stored at an IBM data center.

Web-Based Apps Rising
"We've seen a surge of interest in Web hosting," said Mark Hanny, vice president of ISV alliances at IBM. "On-demand automates the business process and the flow of information, and makes it easier to share information among a value network of customers and partners. We are seeing it popular for CRM, ERP and supply chain applications."

Hanny also said the some companies simply find the hosted model a better way to procure and use software, especially if they don't have deep IT resources. "Some customers find it a faster way to deploy applications. They don't have to worry about things like heterogeneous networks."

As smaller businesses start to explore new options for how they acquire and pay for software, ISVs, according to IBM, are being asked to deliver their applications in new and less-costly ways.

Many ISVs, many of whom are SMBs themselves, can benefit from IBM's Application Enablement Program (AEP), which is being expanded as of today to include resources designed to ISVs prepare for the impact of delivering software on demand.

With today's announcement, IBM will offer new financial workshops, virtual education resources, tool kits, sales kits, solution templates and platform guides to help IBM Business Partners transform their business models.

AEP, according to IBM, uses a six-step enablement process that ranges from qualifying for the program to assessing market opportunity to deploying the application with customers. The program offers financial modeling tools designed to help ISVs plan for the immediate and long-term impact of selling software on a subscription basis.

IBM reports that through expanded enablement resources ISV partners will now complete new workshops and training sessions on new and developing technologies, such as Grid computing and Web Services. In addition, experts from IBM Business Consulting Services are available as are development and testing capabilities at IBM Innovation Centers.

More than Applications
IBM's Hanny points out that in addition to ISVs, the AEP is also helping utility service providers deliver their products more securely and to more customers. For example, Pay By Touch offers biometric payment solutions that allow shoppers to pay for purchases using in-store finger scanning systems. "Basically, finger prints are tied to their credit cards," Hanny said. Shoppers sign up for the service by registering the image of their fingerprint, along with the credit or checking accounts they choose. At check out, the customer simply places their finger on a small finger pad, selects which method of payment to use, and the transaction is complete.

Hosted services are popular with businesses looking for e-mail archiving services, Hanny said. "With regulations such Sarbanes-Oxley, there's a lot of demand to retain information."

Dan Muse is executive editor of internet.com's Small Business Channel and EarthWeb's Networking & Communications Channel.

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