Smaller Partners in IBMs Big Picture

Netgen initiatives include reselling managed services and launching GoingGlobal program

IBM has big plans for some of its smallest customers. Through its IBM Global Net Generation Business, the Armonk, N.Y., company is on a mission to get IBM products and services into the hands of service provider, portal, search engine and dot-com start- ups. To do it, the division will rely on a series of new initiatives, such as enabling IBM partners to resell the companys managed hosting services.

"Our best partners are going to be those firms that go find opportunities," IBM Chairman and CEO Louis Gerstner told attendees at the companys PartnerWorld conference here last week. "The Internet economys noise levels have subsided; the IPO [initial public offering] alchemists have had their 15 minutes."

Leading the initiatives is IBMs expansion of its Quick Launch for e-Business Ventures program. The program allows partners to value-add and resell IBMs managed hosting services; the partners can receive a percentage of sales, or they can opt in to a fees-for-leads program, officials said.

The program expansion also fits into Gerstners message that IBM needs to do a better job at targeting the midmarket.

"We intend to supply the technologies that all these service providers require," Gerstner said, "to get [partners] into the door and move you up the value chain."

"E-sourcing," as Gerstner referred to the service, is traditional outsourcing that can be provided over the Internet. It can be accessed and paid for as needed and as used, he said. And its something that could change the way IBM views and deals with its customers and partners.

"If this takes hold the way we think it might, were going to have to rethink the definition of who the customer is and who were selling to," Gerstner said. "Were providing ways for you to build a hosting business on the back of our $4 billion investment."

Other NetGen plans announced last week included the scheduled launch next month of its GoingGlobal program, which the division first spoke of last summer. The program will advise NetGen members in areas such as technology globalization, financing and currency issues, international distribution, and cultural relevancy, officials said.

In addition, according to IBM officials, NetGen next month will announce an undisclosed fifth track to its ASP (application service provider) Prime program, which enables IBM partners to offer hosted versions of whatever software they may sell in exchange for their use of IBM servers.

Currently, the ASP Prime program consists of four educational and operational programs through which partners learn how to best implement various technologies. Academic tracks cover IBMs Lotus Development Corp. subsidiary, the AS/400 product line, application framework education and education about the technologies of Citrix Systems Inc., of Fort Lauderdale, Fla.

One ASP Prime participant, Auxilor Inc., used the program to turn its Lotus Domino-based help desk software into a hosted application. In return, Auxilor will use IBM servers when the company is ready to outsource its Web site, regardless of which hosting company it chooses, said Auxilor President Alan Forbes.

"Were trying to break out of the Domino space and go into the larger market. The fact that it runs on Domino is a barrier to the Microsoft [Corp.] shops," Forbes said from his Wakefield, Mass., office. "My experience with NetGen was universally pleasant. ... Going through the ASP Prime program was relatively painless."

NetGen is also considering plans to change its geography-based focus into a vertical-market focus, IBM officials said. Currently, there are 35 resource centers and training facilities worldwide, they said.

In addition to these products and services, IBM officials said the company is looking to announce, later this year, hosting services for wireless technologies, as well as more diverse offerings in simple co-location.