IBM Aims For Midrange Gains With iSeries ISV Program

IBM is launching a major effort Friday to help software partners and tool developers create the next generation of software for its midrange eServer iSeries platform -- an initiative, the company says, that aims to establish IBM as the leader in server share for the small- and midsize-business (SMB) market.

The program, called the IBM eServer iSeries Initiative for Innovation, provides services to ISVs and developers that include free access to IBM's Rochester, N.Y., labs and personnel, an expanded portfolio of tools, discounted funding for co-marketing advertising, and a loaner program. With an outlay of as much as $50,000 available to more than 2,500 ISVs and tool developers that specialize on iSeries, plus its own internal costs to kickstart the program, IBM's investment could top $125 million.

"By expanding our support from hundreds to thousands of iSeries partners, IBM expects to open up a floodgate of innovation from third-party software vendors and developers who are eager to create on demand applications for the rapidly growing small and medium business market." said Mark Shearer, general manager, IBM eServer iSeries. "We wanted to smash the barriers that stood in our partners' way -" no matter what development path they choose -" and accelerate their ability to deliver critical innovation such as RFID, web services, portals and personalization to iSeries customers around the globe."

The payoff for IBM? One is increased relationships with partners and their customers that will hopefully translate down the road into sales of iSeries servers and IBM middleware products such as WebSphere and Domino, says Doug Fulmer, IBM's worldwide sales vice-president for e-business infrastructure. "There's an element of perhaps driving hardware demand from the solutions side," says Fulmer. "But that's a benefit that we see down the road, if at all. Our main goal is to build the market by bringing more partners into the mix, and getting them what they need to generate software that will meet their customers' needs."

A bigger target is market share in a segment IBM sees as the chief area for potential growth, Fulmer adds. "We think the spending is there," he says. "Some of it will be this year, while others may be looking out another year or two. But this is a longer effort to build the next generation for this platform."The initiative is deliberately platform- and software-independent, Fulmer says. "People are used to a variety of environments nowadays, and they're using packages that may be in RPG, Cobol, Java, whatever," he says. "They shouldn't have to rewrite everything from scratch; we're looking to help partners create solutions that they can use no matter what their legacy apps are in or what their operating system is." The iSeries runs its own i5/OS system as well as Linux, AIX, and Windows and can virtualize all of those systems for multiple-OS shops.

IBM's strategy is a patient one with a real opportunity for revenue and market share growth, says Jim Balderston, a senior industry analyst at The Sageza Group. "IBM has clearly decided that ISVs and partners are the path into this market. They're not doing applications; they're saying 'Here's the hardware, here's the middleware, go work with the customers,'" Balderston says. "But it's a strategy that can be very powerful going forward; having the partners own the expertise of the market niche, and own the relationship with the customer, makes working with IBM very comfortable for those ISVs."

Given a solid response by ISVs that results in a flood of new iSeries applications, the program also promises potential benefits for customers who will find it easier to work with larger enterprises, Balderston adds. "SMBs are at a point where they don't have a large platform, and yet they're generating data that they have to store, have to manage, and have to secure at a level that fits with their main customers -- and most of those are larger enterprises who have those capabilities," he says. "This levels the field for the SMBs so that they can meet those demands."

The iSeries effort is specifically a worldwide one, says Fulmer; IBM will add new iSeries capabilities to its IBM "innovation centers" in the U.K, and U.S. as well as adding new centers in China, Japan, Italy, France and Australia to help ISVs enhance their solutions, according to a company release. IBM expects to see a host of new partners as a result of the worldwide focus, Fulmer says: "We're already between 2,500 and 3,000 iSeries partners, and we would expect more interest in that from new business as well, particularly in the overseas markets where we're making sure that the offices have what they need to support this."