Big Blue turns guns on MS with ISV strategy

Sweeping into Las Vegas for its PartnerWorld summit last week, IBM's high rollers raised the stakes against Microsoft by pledging $1bn to help support Big Blue's ISV community.

The cash injection is part of a larger initiative for ISVs IBM is calling PartnerWorld Industry Networks (PWIN). This will see the vendor realign its ISV community vertically, mirroring the move it made with its software business at the end of last year.

To begin with, ISVs will be aligned around six verticals - healthcare, life sciences, telecoms, retail, banking and financial markets - with five more being introduced mid-way through 2004 and five more after that, said Buell Duncan, general manager ISV and developer relations at IBM.

"We made a decision four years ago to get out of the applications market and partner with ISVs to take us into that space. We are stepping up our investment and wanted to put our money where our mouth is. IBM as a company is aligned by industry, so it made sense to extend this to our ISVs."

Paddy Lawton, managing director of ISV Digital Union, said it was a great move for Big Blue. "Having brands alone was impossible, because on one deal you could have five different sales people in there: one for Tivoli, one for WebSphere, one for DB2 and so on.

Now with the vertical alignment there will just be one, who will have specialist knowledge about that vertical. Also, now business partners that have an industry-specific solution will be matched by an industry specialist inside IBM."

Kevin Drew, managing director of VAR and ISV Triangle, agreed that the move made sense.

"Selling a product in this way will get the customer to buy more, because you are solving a business problem, and IBM is now spending proper money on helping us to do this." he said.

Duncan said that as part of the PWIN initiative, IBM is simplifying its ISV web site and conducting marketing and education programmes. IBM has worked with ISVs to develop a road map, which has two key drivers: business performance management and utilising customer infrastructure.

Leaving few doubts about who the scheme is intended to attack, Duncan added: "IBM is realigning how its partners go to market with ISVs, leveraging business insight in the enterprise and SME markets. These are advantages Microsoft cannot offer."

Mark Launtenbach, general manager global SME at IBM, went further, claiming: "It is not lost on the ISV community that they have big competition in their space. ISVs are unnerved by Microsoft being in their space."

Steve Mills, senior vice president Software at IBM, said: "We are not doing what Oracle or Microsoft are doing - we are not competing with our own partners.

"Take Navision and Great Plains selling CRM software. Microsoft will keep doing more and more and expanding into other software markets. ISVs have recognised that have a huge competitor in their market."

Jeremy Davis, senior partner at analyst Context, said: "IBM has a policy that Microsoft is a rival and this [vertical alignment] is a good way of going head to head with it." But he added that the firms have a history of working together.

Drew agreed, pointing out that IBM actually embraces Microsoft in many ways. "Anywhere you look you see huge bits of IBM working with Microsoft," he said.

"They are coming from different angles. It will come down to whose technology is best."

sara_driscoll@vnu.co.uk