IBM Eyes 100 Percent Mandate for Online Software Sales
Today, Big Blue lets customers download only small software packages. But IBM.com's general manager says the company intends to fulfill all software sales online. Are corporations ready to buy in?Would you buy all your software over the Internet? IBM thinks you will. As 2002 began, IBM VP and IBM.com General Manager Doug Maine told Baseline that he had an executive mandate to fulfill 100% of IBMs software sales through IBM.com. An IBM spokesman, Michael Rowinski, later would say Maine was referring only to IBMs public Web site, which serves consumers and smaller businesses that lack volume-license agreements or their own private sites with IBM. Even so, the message was unmistakable.
IBM.com accounted for $12 billion of IBMs revenue in 2001, up 41% from the year before. That now represents 14% of IBMs sales of $85.9 billion a year.
Yet corporate customers say that IBMor any software vendor, for that matterhas a long way to go before they would consider buying all their software online as a routine practice. In general, IBM sells very complex software whose online delivery time can be measured in hours. "Would we buy online? With little items [like Java licenses], no problem, but with big items like Content Manager, we would want to discuss with [the IBM support staff] whether we need it," says David Bush, CIO of corporate truck and fleet management company LeasePlan USA, which uses IBM software to manage documents electronically. Resellers of IBM software may lose revenue from IBMs shift online, but one integrator says the benefits of having customers educate themselves and try out software before embarking on a major project will be well worth it. "All of the other software vendors will follow this if they arent doing it already," says Richard Came, CEO of global business strategy for Dimension Data, a technology services company. Nonetheless, says office automation consultant Amy Wohl, customers will still want to keep a physical copy of the software on hand. Otherwise, when software goes bad, "I have to go back and get if off the Net," she says. Meaning: You have to re-download software you thought you already had. Maine says IBM has spent the last two years rebuilding IBM.com, after learning the hard wayfrom highly public outages like that which occurred during the 1996 Summer Olympics in Atlantathat "men in ponytails and earrings" were not sufficient to provide the "traditional IT structure and processes" that the job required. With help from its R&D organization, IBM runs the site on IBM productshardware, DB2 database, and WebSphere application server, and incorporates changes into the software as needed. On the technical side IBM is simplifying IBM.com, which consists of around 4.5 million Web pages and 2,200 separate URLs, and has integrated browsing and shopping so that customers can purchase an item immediately without backing out and clicking through a separate "Shop IBM" channel. On the business side, IBM has embarked on a 4,500-seat installation of Siebels customer relationship management (CRM) software, the largest in Siebels history. Telesales representatives now handle customer support and some sales and are available to IBM.com customers through "Chat" and "Call Me" buttons on the site. They can also intervene to encourage customers to finish shopping when they suspect an abandoned shopping cart. What you should do when buying Big Blue software online:
- Make sure you have plenty of bandwidth
- Create a mechanism to restart downloads if they are interrupted
- Get a physical copy, anyway