April 27, 2004 3:00 PM PDT

IBM expands midmarket push

Increasing its drive into the midsize business market, IBM is introducing four products designed to improve the management of vital networks.

On Wednesday, Big Blue plans to announce the products, which include network management and disaster-recovery services. IBM also is offering to simplify the management of information technology environments through use of an iSeries server computer, and to provide highly reliable computer systems with IBM gear and software from partners.

IBM, like other technology sellers, has been targeting the midsize business market, generally defined as companies with 100 to 999 employees. There are about 100,000 such firms in the United States, said Merle Sanders, an analyst at research firm IDC.

Sanders said IBM's new products should be interesting to those firms, which are struggling to handle increasingly sophisticated technology. "Things are just getting more complicated for them," she said. "A lot of them are juggling so many balls."

IBM's latest offers are part of its "Express" initiative, which was launched last year to build products tailored for midsize firms. The effort, which includes hardware, software, services and financing plans, seems to be paying off. In the most recent quarter, IBM said its revenue from small and medium-size businesses grew 15 percent to $4.9 billion, while overall revenue grew 11 percent to $22.2 billion.

Last week, IBM announced a service geared to help small and medium-size businesses reduce the productivity-draining effects of spam and viruses. That service, the Desktop Management Services suite, allows IBM to manage customers' spam and virus problems remotely.

The forthcoming network management service from IBM allows Big Blue to monitor customers' networks around-the-clock. The service tracks network performance, system health and component problems, and delivers important software and firmware updates, IBM said. The service typically costs about $250,000 over three years, according to IBM.

IBM's new disaster-recovery service includes a two-day workshop in which IBM and the customer create a recovery plan and run "outage emergency exercises." The service also provides a preconfigured iSeries or pSeries system for temporary use during an outage.

Both services are available through IBM and through IBM business partners. Using smaller systems integrators as partners to sell to midsize businesses is central to IBM's success in its Express effort, said Kneko Burney, an analyst with research firm In-Stat/MDR. That's because IBM is used to an expensive sales process when courting large "enterprise" customers.

Burney said IBM--in particular its services unit--is working to overcome a legacy of stepping on potential partners' toes. "IBM has been perceived to be a horrible partner over the years," she said. "But they've really cleaned up their act."

 

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