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IBM seeks mid-market relevance

Express Managed Services are go

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Quocirca’s Changing Channels As part of its drive to make itself more relevant in the mid-market IBM has launched three new, what it calls, IBM Express Managed Services (IEMS). These are in addition to a couple of existing services, one of which IBM is keen to remind us of and another which it would prefer to sweep under the carpet. All these services are being sold via IBM’s channel partners and are available in the UK and certain other European countries.

IBM has long faced a challenge in the mid-market. The infrastructure software that mid-sized businesses (defined by IBM as 100 to 1,000 employees) choose is predominantly that of its main rival Microsoft and the hardware they run it on is most likely to come from two other rivals; HP and Dell. Whilst IBM is prepared to fight for mid-market share with these competitors, it is an uphill battle. However, with managed services things look rather different. The market is still in the early stages of development and pretty fragmented. IBM has a chance to take the lead.

Email Security is the existing managed service IBM is wants to remind us of. IBM likes to describe it as a “washing machine” for email. There is nothing new about this; similar services are already available from companies like Postini and BlackSpider. Microsoft has also recently entered this market through the acquisition of Frontbridge. In fact, in this case, IBM is simply reselling the service from the dominant European supplier of email filtering services – MessageLabs.

One of the new managed services IBM has announced is Email Recovery Services, a stable mate to email Email Security. Again there is nothing unique about this, Microsoft/Frontbridge can already offer this, Postini has announced plans to do so and there similar services from specialist vendors like Mimecast. However, when viewed alongside the second of its new offerings – On Line Backup and Recovery – IBM’s capabilities start to look more comprehensive than the others.

On Line Backup and Recovery does what it says on the box. This should prove attractive for mid-sized businesses because it kills two birds with one stone. First data backup is automated and regular and second it goes straight off-site – an essential step for data protection that many organisations fail to take. Again IBM is not the first vendor to offer such a service - there are many others such as Netstore, Datafort and Iron Mountain - but if it can persuade businesses to switch to a managed service for this most fundamental of requirements, it has opened the door for its email security and recovery services and other Express offerings

The third of the new offering – RFID Solution for Mid-market – is more niche, but likely to be increasingly important. Many mid-sized businesses are being required by their larger customers to interface to radio frequency identification systems (RFID). A good example is a small supplier to a large supermarket having to supply all their products with RFID tags. IBM’s service will allow the small supplier to source the tags and interface with the supermarkets own RFID system without having to invest in any new technology on its own premises.

What of the exciting service that IBM is less keen to talk about? In 2004 IBM signed an agreement with Siebel Systems to resell its Siebel On-Demand hosted CRM service. It is not clear how successful this has been for IBM, and since Oracle acquired Siebel last month it has turned into the hot potato in IBM that no-one wants to hold. Anyway, IBM says it is not an IEMS: although try telling salesforce.com that hosted CRM is not relevant to the mid-market.

If IBM is to become a leading vendor of managed services to the mid-market it will need to be more committed to these new offerings than it has been with Siebel OnDemand. As most of the new offerings are infrastructure services rather than business applications, they are closer to IBM’s core competencies – if it executes well it might be able to take a lead, but it will need the help of the channel to do so and will need to expand its partner base to bring in more resellers with a mid-market focus.

Copyright © 2005,

Bob Tarzey is a service director at Quocirca focussed on the route to market for IT products and services in Europe. Quocirca is a UK-based perceptional research and analysis firm with a focus on the European market.

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