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IBM looks to tap small businesses

IBM is adding an army of Internet services firms to its business partners program to help it sell products and services to the untapped small to mid-size market.

IBM is adding an army of Internet services firms to its business partners program to help expand its sales to the untapped small- to mid-size market.

Big Blue's new Web Integrator Initiative targets the expanding field of interactive agencies, system integrators, Web designers, and services firms, including Razorfish, Agency.Com, Think New Ideas, Organic, and others.

As IBM partners, the more than 100 companies that have signed up over the past month will get marketing and technical support, IBM product certification, testing for software and hardware, as well as training.

In turn, IBM will get their partners' help in targeting more new product and services opportunities.

Analysts say the program should help IBM reach key smaller business customers--an as-yet untapped market for many e-commerce services. About 60 percent of IBM's first quarter profit this year came from its services sales.

The program will also help IBM sell its Net.Commerce application server, MQSeries messaging middleware, Lotus Domino, IBM WebSphere, and DB Universal Database to this growing market.

"The only way [IBM] can reach customers with 50 employees or 75 employees and put them in the new landscape called the Web is by having partnerships with these people," said Sam Albert, president of Sam Albert Associates.

IBM rivals Sun, Microsoft, and Hewlett-Packard as well have strategies for tapping new business by targeting smaller Internet firms and Internet service providers.

Earlier this week, Sun Microsystems unveiled a plan to target companies that sell Internet-based services. The strategy would push products from the Sun-Netscape alliance, offer discounts for service providers that want to buy Sun hardware, and start a "SunTone" certification program to back companies whose computers stay up and running.

IBM's new program, although somewhat vague, is a smart move, said Colin Mahony, analyst at Boston-based Yankee Group.

"They've got to start seeding that market and building relationships with these (smaller) companies," he said. However, Mahony noted that unlike Sun and Microsoft, IBM has a large services practice and often competes with some of these smaller firms, including Scient and Viant, which are also now business partners.

"Scient and IBM are going head-to-head right now," he said, though noting "co-opetition" is the typical IBM way. "They work with Sun and HP on Java, but they're at each other's throats for Unix boxes."

Smaller Internet companies need IBM to help them tie a Web storefront, for example, to a back-end financial application, said Mark Hanny, director of Web integrator marketing and sales at IBM.

"A big thing they've found they've needed help with the most is in the middle of the engagement when it's 'Uh-oh, I built this system and now I have to hook it up to a legacy system,'" he said.

IBM can provide the middleware that connects a PeopleSoft billing application, for one example, to an order entry system, he said.