IBM To VARs: SMB Opportunities There For The Taking

Big Blue unveiled a new series of initiatives aimed at helping solution providers increase their small and midsize business sales to an audience of IBM's solution providers and business partners during the IBM Business Partner Leadership Conference, held this week in Los Angeles.

The initiatives, part of IBM's new Blue Business Platform, target more than one million potential customers worldwide, said Mark Shearer, vice president of business systems in the Armonk, N.Y.-based vendor's Systems and Technology Group.

The initiatives send a strong positive signal to IBM's solution providers, said Roger Luca, senior vice president of Mainline Information Systems, a Tallahassee, Fla.-based IBM solution provider which depends on the small and midsize business market for about 30 percent of its revenue.

"IBM and Mainline both want to increase our presence in the SMB space," Luca said. "Competition in this space requires we focus on cost, ease of use, and ease of integration. These are all critical for the SMB. Many times, SMBs lean on our talent."

Cost, ease of use, and ease of integration are big parts of why IBM is introducing the Blue Business Platform, which is a series of initiatives to bring IBM hardware, software, and services together, Shearer said. "It's a new platform designed to simplify and innovate cloud computing in customers' businesses," he said.

The Blue Business Platform includes IBM Lotus Foundation, a compact appliance server designed to set up basic communications and collaboration technologies in a small business within 30 minutes, Shearer said.

IBM is also starting a new on-line marketplace for small and midsize business solutions where solution providers and IBM's technology providers can share their solutions and offer them to partners and customers around the world. Customers can also access the marketplace to find such solutions which can be used in their own businesses, Shearer said.

Also new is a series of open APIs (application program interfaces) which will be used to ease the integration of applications and Web services, Shearer said.

"This sets the stage for IBM to provide our business partners with a global reach, and our customers with a single source for new technologies," he said. "It brings together the best of local and cloud-based services. We're providing a set of APIs which provides a series of steps to simplify the search, purchase, download, and maintenance of solutions. This is a level of integration that's a first for the industry."

The Blue Business Platform solutions provide a way to simplify the delivery and management of applications, Shearer said. "But they depend on our VARs to deliver the systems," he said.

IBM's Blue Business Platform is a great step in the right direction, said Chris Pyle, president of Champion Solutions Group., a Boca Raton, Fla.-based IBM solution provider whose main focus is on the small and midsize business market.

"I like the idea of bundling solutions together," Pyle said. "Customers don't care about the components. They care about the value of the solution. And it makes it easier for me to sell because it can be a complete solution."

Having APIs for integrating different components into a solution also makes it easier to connect new parts to existing solutions as well, Pyle said.

IBM's solution providers will be very interested to see how the Blue Business Platform works, but the fact that it is IBM behind the integration of the various components is important, Pyle said.

"You're starting to see people bundle more products together," he said. "But there's only one IBM. They'll have a leg up over the competition if they make it work right."

One ISV which has been working with IBM on getting ready for the Blue Business Platform is Infor Global Solutions, an Alpharetta, Ga.-based developer of business software applications.

Dennis Michalis, senior vice president of channels and alliances, said his company often bundles its software with IBM hardware for certain customers.

The Blue Business Platform will help customers find the right solutions, Michalis said. For instance, he said a customer might go to the portal, answer a few questions, and gradually get potential solutions narrowed down to the appropriate application.

Such a system has great potential for small and midsize business solution providers, Michalis said. "We know our customer base has their trusted advisors," he said. "Maybe a customer will poke around and go to their partner with the solution they found. Or a partner may take a customer to see what's available. So the customer might work with the partner to find the solution, or independently find the solution and then bring their partner in."

The small and midsize business market may not be as big as the enterprise market in terms of IT spending, but it is where the biggest solution provider opportunities lie, said Frank Gens, senior vice president and chief analyst at IDC, a Framingham, Mass.-based analyst firm.

Small and midsize businesses account for about 34 percent of IT spending worldwide, Gens said. However, they also account for about 65 percent of worldwide GDP (gross domestic product) and about 70 percent of worldwide employment.

"If we can just get half of that gap filled, that would be an additional $220 billion in IT spending opportunities," he said.

Like other businesses, small and midsize businesses need affordable technology and business solutions, Gens said. The difference, he said, is that smaller companies need simplicity. "So instead of SMBs being a backwater of opportunities, it's now an epicenter of success," he said.