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IBM launches new outsourcing service

The packaged, fixed-price service targets firms that want to outsource day-to-day management, support, and maintenance of servers.

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
2 min read
IBM is sending a little holiday cheer to its core market in the form of a new outsourcing service.

Big Blue announced today it wants to run, manage, and maintain its staple AS/400 servers for its lucrative middle market customers.

The packaged, fixed-price service to be delivered by IBM Global Services and the company's resellers, targets companies that want to outsource day-to-day management, support, and maintenance of servers.

Announced in June for customers in Australia and Canada, the company is now expanding to the United States, most of Europe, parts of Asia-Pacific, and Latin America. The new service is available immediately.

IBM's service is part of an overall vendor trend toward targeting the middle market as the Fortune 500 sector becomes increasingly saturated.

Yet while outsourcing is catching on among larger companies as a way to reduce labor and support costs, it's not yet accepted across the board, analysts said.

"There's always this pie-in-the-sky appeal to it," said Tom Grace, analyst at AMR Research. "It's 'Get the monkey off my back and go to the supplier.' But people get uncomfortable with the off-site idea and once you do it, it's hard to get out of it." On the other hand, he said, outsourcing management of AS/400 servers would free a company to provide more support and training for internal management of its Unix and NT servers, if needed, he said.

IBM's new plan costs $4,000 per month for base service, which includes monitoring, help desk support, account management, and daily backups. Optional service for full-scale management includes batch job management, disaster recovery services, performance, and capacity planning, system software upgrades, extended hours service, user profile administration, and security audits.

Managed services are delivered at either an IBM secure data center or via a remote link.

In the first half of 1999, IBM plans to announce similar services for Unix and NT server management, said Scott Ferber, worldwide marketing director for IBM's small- to midsized business services division.

Outsourcing enables companies to manage servers at a lower price than they could expect from managing the service internally, leaving them free to focus on core business, Ferber said.