IBM vs IBM in SMB - the competition continues

By Nick Hortovanyi

Following twitter the other day, I noticed a tweet by Ed Brill -  "I've been tempted to think about whether failed institutions used Notes vs. Exchange, but all of them are likely IBM customers somewhere.". I sent Ed a tweet containing a link to a blog entry I'd written previously on IBM vs IBM in SMB.

James Governor, picked up on it here in a blog entry and highlighted the issue of X Series advertising and success of IBM software in SMB. Mark Cathcart, jumped in here, with James supporting the case of the underdog (being myself, Aussies are known for coming from behind and winning). Mark commented on the very competitive nature of the x86 market, and eluded if they didn't advertise Microsoft software, they'd be out of business before you could spell b-u-s-n-e-s-s i-n-t-e-l-l-i-g-e-n-c-e. Thinking aloud here, is that why IBM is allowing Lenovo to license their X Series technology in certain areas?

But again his statement conflicts with the view of IBM Lotus as expressed on the comment left by Ed Brill. Through Lotus Foundations, Lotus are intending to deploy an appliance into these SMBs. This appliance will ultimately also have access to Lotus Bluehouse.  On a side note, the Lotus Foundations/Bluehouse scenario was what I was looking at eventually achieving five years ago, through WebSphere Portal Express.  I'm glad to see that Lotus Foundations runs Linux (no Microsoft required - finally Lotus getting off of Microsoft Operating Systems), think it might use an X Series server (but there is no mention of it that I can point to), and the focus is on your business, not IT. Am a little concerned at the focus on Lotus Notes (but it does allow Outlook connection, not sure about the Mac) but at the end of day, until Lotus Bluehouse is effective, its only email. So for an SMB, why not use Google Apps & Google Mail?

Mark mentioned a product called iDataPlex, which seemed to be targeted at ISPs or larger organisations. Not sure how many SMB organisations, need a "Right-size your Internet-scale data center" type infrastructure? This highlights to me, the difference in thinking between those that sell and support the larger end of town and those that support SMBs.

Its two different worlds, that are equally important but completely separate in what the immediate business drivers are.

Now I did agree about Mark's point regarding the support and incentive to sell, however that's useless if the customers don't want to buy IBM Software in the first place. The x86 hardware market is so competitive that it has now got to the point that it is not worth while quoting, as the winning bid (every one gets the special bid) on a large transaction will have a margin of 1% (that also needs to cover the cost of warehousing and delivery) for the business partner.

The point I'm making here is that the support and incentives are irrelevant, if IBM has not primed the SMB market using business intelligence itself to help progress potential buyers through the product buying lifecycle. I don't want to engage with the customer with an IBM product, if it is the first time they have heard about it. The sales cycle is just too long and hence then unprofitable with considerable training expenses.

In my experience, SMB customer's perceive IBM as IBM, not the individual brands, be it hardware, software or services that make up the organisation. If there is confusion, or mixed messages, they will go to other vendors with clear and consistent messages and experiences. Maybe that is one of the reasons Apple is starting to do so well (this blog post has been written on my Mac Book Pro).

IBM vs IBM in SMB

By Nick Hortovanyi

Ed Brill in a recent blog entry "Two views of Lotus in SMB", is asking readers to comment on a couple of memes regarding IBM and SMB.

From the land down under, my external observation, is that with the IBM classification of organisations that there are few organisations that do not fall into IBM's SMB classification. So the assertions mentioned are quite relevant. What we see here, is great software, that normally has quite a large learning curve. I can attest to the time spent learning some of it. Don't have time to do twin PhDs in computer science and comparative philology as am busy with usage of the actual IBM technology. This can become all encompassing with no time left for other educational learning activities.

Unlike in the US, us Aussies normally span many roles, and tend to be specialists in multiple complementary disciplines. So when we see different products for different roles, the eye balls roll back, as we would much rather have a single product with the flexibility to on-demand enable the roles to suit the tasks we are performing. This sounds simple, but is really costly to purchase all the licenses. When we seeing on-demand pricing for the WebSphere and Rational development tools? - it may help us down here, we are normally early adopters!

In the past we experimented with offering a combined package of IBM Software (WebSphere Portal Express then Workplace Services Express), Linux and IBM Hardware to overcome some of the issues mentioned in Philip Storry's blog entry - "tragedy" of IBM Lotus in SMB. Our intention was to use IBM Express software and overcome the internal learning curve issue, through implementing a repeatable on-premise solution.

This sounded really great and we got a lot of initial support from various programs and IBM Marketing. Lots of effort was put in to engaging with IBM.com and IBM client executives. What we found in practice was, if there was a decision between helping us sell our combined solution or selling some X Series hardware, knowing that the customer had budget, to make this quarter's sales targets. The X Series hardware, like a new SAN won out every time. Our focus was really on software, so another Business Partner profited from the SAN hardware sale.

Also we noticed during this period, that IBM was advertising X Series hardware on the popular IT related web sites. I think the slogan was "... and best of all, it comes pre-installed with Microsoft Small Business Server".

So in IBM vs IBM, IBM wins - this leads me to ask when will something be done by IBM to give a fairer playing field for its own software against Microsoft on its own X Series hardware? This may be controversial, but I can see as the software percentage of total revenue for IBM rises, that it must be looking to sell off the X Series division to give its own software more of a chance!

So to answers Ed's question "Do you agree or disagree with Charles and Philip?" I would say IBM needs to enable its SMB software to be provisioned in a SaaS off-premise model. To overcome the issue of the quarterly incentified client executives and direct sales representatives, this should be done by certified Business Partners that have the interest of the clients and the running of the software service as prime importance!