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IBM jumps on app hosting trend

IBM Global Services is the latest IT services giant to add application hosting to its repertoire as the company begins to target mid-sized firms.

Kim Girard
Kim Girard has written about business and technology for more than a decade, as an editor at CNET News.com, senior writer at Business 2.0 magazine and online writer at Red Herring. As a freelancer, she's written for publications including Fast Company, CIO and Berkeley's Haas School of Business. She also assisted Business Week's Peter Burrows with his 2003 book Backfire, which covered the travails of controversial Hewlett-Packard CEO Carly Fiorina. An avid cook, she's blogged about the joy of cheap wine and thinks about food most days in ways some find obsessive.
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Kim Girard
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IBM Global Services is the latest IT services giant to add application hosting to its repertoire as the company begins to target mid-sized firms.

At PC Expo in New York, IBM said it's "significantly" expanding its effort to deliver secure, scaleable applications, and services to help small and medium-sized businesses with their e-business foundation.

IBM, however, is not the only IT firm to offer application hosting, or rental, in what has developed into a large, growing market--a market that specifically targets mid-sized companies that can't afford to buy applications, install them, and maintain them. This services market has already been tapped by large competitors including SAP and EDS.

Smaller companies, such as Corio, which rents PeopleSoft applications, and USInternetworking, which rents Siebel's applications, are already in the game.

In IBM's entrance to the market, the company has forged partnerships with Great Plains, SalesLogix, and Ultimate Software, combining software applications with its hosting services to provide remote management of day-to-day business functions.

IBM hosted services is comprised of IBM hardware, financial business applications from Great Plains, SalesLogix's sales force automation applications, and human resources applications developed by Ultimate Software. Support and networking services will be handled by Big Blue as well, IBM said in a statement.

In addition, IBM has teamed with Fidelity Leasing and First Sierra Financial to finance IBM's hosting services offering for its customers. For instance, First Sierra said that the offering will be managed by its technology group, which provides businesses with integrated e-commerce technology and online financing products for their commercial customers.