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By Darryl K. Taft  |  Posted 2004-09-13 Print this article Print

In addition to WebSphere, a key part of IBMs vertical strategy is ISVs. Recruiting them to build applications that complement the companys vertical middleware is also an ongoing effort, said Mark Hanny, IBMs vice president of ISV alliances.

"We are very, very dependent upon providing total solutions to customers ... and were spending about $1 billion when you look at what we do with ISVs this year," Hanny said.

To that end, IBM in March launched the PartnerWorld Industry Networks program, which offers technical, sales and marketing, and business insight assistance to ISVs across nine industries. Earlier this month, IBM added the automotive industry to the list of markets covered by the PartnerWorld program. The others are health care, life sciences, telecommunications, government, retail, banking, insurance and financial markets.

"Were up to more than 1,400 [ISVs in the program] since we announced in March," Hanny said. "Were seeing explosive growth in emerging markets such as China. And another thing is just an unbelievable interest in Linux."

Another big play is SMBs, Hanny said. "And in the SMB space, we have an initiative called SMB Advantage, and 73 to 75 percent of the solutions are Linux-based."

In addition to the 1,400 ISVs involved in the program, Hanny said IBM has more than 60,000 software partners offering more than 30,000 IBM-related solutions to their own vertical-industry customers.

IBM partner DST Inc., based in Mission Viejo, Calif., has delivered an IBM industry-specific, middleware-based solution to Seattle Automotive Distributing Inc., in Seattle.

"The technology DST delivers provides us with unbeatable flexibility to integrate multiple operating systems to best serve each of our customers," said Tim Dickison, general manager of Seattle Automotive Distributing. "Their expertise has provided us with a comprehensive, easily tailored system for retaining existing customers as well as attracting new business. They are miles ahead of the competition."

Jean Blackwell, vice president of business development at Bristol Technology Inc., in Danbury, Conn., another IBM ISV partner, said that Bristol bundles IBM technology with its TransactionVision solution and that its stack is IBM middleware. Blackwell said the solutions Bristol sells usually include IBMs Tivoli systems management software.

"We sell IBM boxes with all the Express versions of the software running on them," Blackwell said. "We get a lot of benefit from the upfront investment, like the innovation centers. But we also see IBM as an execution partner."

But its taking more than just thoughtful software solutions, smart partnerships and tight internal integration for IBM to pull this off. Its also taking a coordinated technical support effort. For that, the company turned to Lauren States, vice president of sales support for the IBM Software Group. States is responsible for supporting the industry solutions and, as such, oversees a force of 3,000 software architects and "deep product specialists" who support customers.

"Thats the technical force were building in IBM and were maniacally building in the Software Group," States said. She said her group has more than 400 professionals who work directly with ISVs.

Going forward, IBM is implementing a new role for its sales support staff. "Its a hybrid role between our architects and deep product specialists and will be called solutions specialist, where you bridge into being focused on solutions," States said.

According to Forresters Gilpin, IBMs moves in the vertical space are trend-setting and productive. "The IBM move is not a survival strategy, obviously; rather, [it] aims to increase market penetration and grow share [and revenue], and I think its already showing some successful results in those areas on which they have focused," Gilpin said.

To be sure, the vertical push is dramatically impacting the software groups customer base—especially SMBs. According to Jim McDade, IBMs vice president of worldwide SMB, during the first half of this year IBM "pulled in 12,000 new SMB customers ... and we think well surpass that 12,000 in the second half."

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Darryl K. Taft covers the development tools and developer-related issues beat from his office in Baltimore. He has more than 10 years of experience in the business and is always looking for the next scoop. Taft is a member of the Association for Computing Machinery (ACM) and was named 'one of the most active middleware reporters in the world' by The Middleware Co. He also has his own card in the 'Who's Who in Enterprise Java' deck.

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