PARTNERWORLD - IBM aims at midmarket appeal

IBM is looking to attract more midmarket customers through an expansion in its Express Advantage program

IBM hopes to get more users interested in its midmarket family of products with the expansion of its Express Advantage program outside of North America and the addition of new server, storage and software offerings.

The vendor launched the initiative a year ago in the U.S. and Canada as a way to package its Express range of midmarket hardware, software and services with support from IBM's financial services and partners. IBM relies heavily on its partners in the midmarket space, which it defines as companies with 100 to 1,000 employees.

IBM said Monday at its PartnerWorld conference in St. Louis that it plans to spend more than US$200 million to support the rollout of Express Advantage to 23 countries in Europe, Asia-Pacific and Latin America.

Since IBM debuted its first Express software in 2002, the company has been continually widening the scope of its small to midsize business (SMB) portfolio, positioning those products not as cut-down versions of its enterprise-level products but more as offerings tailored to the needs of smaller companies, particularly in ease of use, installation and affordability.

Over time, the Express portfolio has grown to include IBM's DB2 database, WebSphere middleware, Lotus groupware and Tivoli systems management software, along with the servers, storage and services. There are now more than 160 Express products with over 800 third-party Built on Express offerings, according to Steve Solazzo, general manager, global small and medium business at IBM.

The Express offerings debuting Monday include additions to IBM's System i servers, its storage tape drive and Lotus messaging and collaboration software. Sales of System i servers have been disappointing in recent quarters, and adding Express versions of the hardware might be one way to "help rejuvenate our growth," Solazzo said.

The Express Advantage program has made it easier for Solutions-II to more quickly train its salesforce on IBM products, according to David Stone, vice president, business development at Solutions-II.

Solutions-II is an IBM partner, which since its founding in 1992 has transitioned its business from a hardware focus to software and more recently services. The 56-person company specializes in storage and server consolidation, management of those systems and disaster recovery.

Although the company's business is in the U.S., Stone welcomes the global expansion of Express Advantage. "The more prevalent it is will help all of us," he said. Stone expects plenty of useful input to further improve and broaden the program to come from outside of North America.

"When they [IBM] focus investment in a market space, they win that particular sector," Stone said. Given IBM's size, it takes time for that to happen, but he believes the vendor is making a lot of the right moves in the SMB market at a faster speed than in the past.

Working with partners, IBM has made a lot of progress in the SMB market, but still only has single-digital market share, according to Marc Lautenbach, general manager, Americas for IBM. "We've just scratched the surface," he said.

The long-held perception among SMBs that IBM's hard to do business with is changing. "It's nothing like it was 10 years ago," Stone said.

"It was never a question could IBM do the job, it was really about whether it was too expensive and difficult to implement," Ray Boggs, vice president of SMB research at analyst company IDC.

To give a sense of the difference between IBM's enterprise and Express offerings, IDC's Boggs used a tailoring metaphor.

Enterprise customers pay to end up with a "bespoke perfectly fitting suit" in terms of the products they purchase from IBM, while SMBs effectively pull a ready-made Express suit off the rack. However, as IBM provides partners with more resources, like extending the Express Advantage program, it allows them to "adjust the sleeves and get the cuffs right" on the SMBs' suits, he said.

With the global expansion, IBM plans to make its Express Advantage Concierge service available to customers outside of the U.S. The service enables users to dial a toll-free number to connect with IBM staff trained on Express products and knowledgeable about IBM partners in their local area.

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