Big Blue courts the little guys

In his first public appearance since being named IBM Corp.’s chief executive officer, Sam Palmisano this week at the PartnerWorld conference is expected to underscore the company’s commitment to Web services, roll out new servers, and kick off a major campaign to go after the small and medium businesses (SMB) market.

The move to capture SMB business is designed to help IBM gain some much-needed growth, and counteract the recently redoubled efforts of competitors including Microsoft Corp., Oracle Corp., Compaq Computer Corp., and Hewlett-Packard Co. (HP).

“IBM has to do this because their growth has not exactly been stellar in the enterprise market, which is becoming saturated,” said Mika Krammer, research director in Gartner Inc.’s small and mid-size businesses group in Stanford, Conn. “The SMB space is growing much faster than the enterprise from a technology consumption perspective.”

Krammer and others believe IBM’s decision to consolidate various product lines, particularly servers, under one umbrella organization over the past year has been a good thing. The consolidation has made it easier for SMBs, as well as large enterprises, to deal with the company and its many distribution channels when buying multi-product solutions.

But perhaps the most significant overture IBM is making to the SMB market is a concerted effort to establish relationships with partners beyond its own US$35 billion Global Services organization, some observers believe.

IBM, in many cases, hopes to leverage the long-term relationships these partners have fostered with SMBs.

“IBM is using a hub and spoke model with these other professional services vendors, who have trusted relationships with their customers,” Krammer said.

IBM will use PartnerWorld to demonstrate its commitment to Web services and the SMB market by rolling out a couple of new servers and a Web services program for partners.

The new services program, called Web Services on Websphere (WOW) is intended to supply partners and solution providers with technical resources as well as marketing support to create and deliver Web services more quickly to market.

The company will try to make mainframe computing more attractive to smaller companies by rolling out a new IBM eServer z800, an entry-level mainframe computer, according to company officials.

Big Blue is touting the new mainframe as a way for companies to consolidate workloads from Web servers, print or file servers, and e-mail servers by moving them onto a single computer.

Available in one- to four-way processor configurations, the z800 performs as a stand-alone system or in a parallel cluster of servers. “Big iron isn’t just for big companies anymore,” said Rich Lechner, vice president of sales and marketing for zSeries.

IBM will also roll out a new operating system, z/OS.e. The new 64-bit operating system is built to meet the workloads of e-businesses using the z800.

Meanwhile, PartnerWorld will serve as a backdrop for IBM to announce a deal struck with Denmark-based software company Navision to deliver its Attain software on IBM iSeries and xSeries servers, an IBM representative said.

Navision’s Attain delivers enterprise-level resource planning for small businesses, with functionality that includes financial management, supply chain collaboration, CRM, and e-commerce capabilities.

IBM also plans to demonstrate newly released Memory eXpansion Technology (MXT) that can give administrators the ability to double the memory of a computer while increasing performance by almost as much. MXT will debut in IBM’s eServer xSeries x330 server, a rackable 1.75-inch product from the company’s Intel-based server line.

MTX relies on a high-speed hardware algorithm to encode data in a way that takes up half the space on the computer’s main memory than normally required. An improved shared cache design within MTX also contributes to performance by keeping frequently accessed instructions closer to a computer’s processors for faster access, IBM officials said.

Bringing dynamic partitioning to its Intel-based server line, IBM will also announce at PartnerWorld it has struck a deal with software company VMWare to deliver VMWare’s partitioning technology to enterprise versions of IBM’s xSeries server line. Partitioning will allow enterprise xSeries users to split up workloads within their xSeries server, consolidating server resources and adding additional failover capabilities.

Trying to lure users of HP’s soon-to-be-discontinued 3000 series of servers, IBM at this week’s show will announce a migration plan to move customers over to Big Blue’s iSeries.

The migration plan, will be carried out in concert with Sector 7, a services company specializing in migration services, has helped IBM with similar programs including its pSeries of Unix-based systems.

“They are aiming this at HP 3000 customers because its technologies, performance and price points are similar to those of the iSeries. This could be an interesting little cat fight here with HP trying to hold on to those customers while IBM tries to grab them away,” said one solution provider familiar with the program.

IBM Canada Co. in Markham, Ont., is at

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