January 24, 2003 1:39 PM PST

IBM shoots for the middle

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January 23, 2003
IBM's software group said Friday it plans to ratchet up its sales and support staff and to tweak its product line in an effort to woo medium-sized businesses.

Big Blue will hire 500 software sales and support people over the course of 2003 to focus on companies with between 100 and 1,000 employees, said Donn Atkins, vice president of worldwide sales and marketing at IBM. The employees will make direct sales to customers and support partners that sell IBM software, he said.

With the push, the company intends to broaden its customer base beyond large corporations, its traditional area of strength.

"If you look at industry statistics, midmarket customers have had tremendous growth," Atkins said. "This represents a space where we don't have a presence."

On the technology development side, Atkins said IBM expects to create more versions of its software products targeted specifically at medium-sized businesses or at departments of large corporations.

The Armonk, N.Y.-based company already sells WebSphere Express, a package of Java server software with simplified installation and a limited set of features, tailored to these customers. It is looking at creating similar "express" packages of its DB2 database application and of its Tivoli systems management software, Atkins said.

In the midmarket, IBM is seeing strong demand for its full-strength WebSphere portfolio of products, Atkins said. The portfolio includes WebSphere Business Integrator, for linking disparate systems, and WebSphere Portal, for presenting company information in a Web browser.

In another, related, sales push, IBM plans to redirect its 2,000-strong data management sales force to tackle the fast-growing niche of content management, according to the company.

IBM's strengthening of its sales forces reflects a strategy that both it and rival Microsoft are pursuing, said Stephen O'Grady, an analyst at research firm Redmonk. While many software companies are struggling financially, IBM and Microsoft both have billions of dollars in cash--the means to invest in gaining more market share.

"They are both dealing from a position of strength and have new offerings," O'Grady said. "They're really trying to maximize their respective coverage, in an effort to put some distance between them and their competitors."

 

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