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IBM thinks vertical with software revamp

The company vows to sharpen its focus on selling software along industry lines with a reorganization of its sales group and a boost to investment partner programs.

IBM intends to reorganize its sales force and increase spending on partner programs to boost sales of its software.

Over the course of 2004, the computing titan will take a number of actions to accelerate software sales with an industry-specific orientation, according to Tim Breuer, the director of public relations for IBM's software group. By the end of next year, the company plans to have over half of its sales force trained with both technical and industry expertise, he said.

At the same time, he said, IBM will increase investment in existing partner programs to accelerate the delivery of applications, built on its software, that are specialized for vertical industries. For example, IBM will extend its ISV Advantage program to entice partners to build industry-specific editions of their applications for small and medium-size businesses.

"There will be a series of technology and marketing enabling programs to tie their applications to our middleware," Breuer said.

Breuer said no dollar amount has been tied to the efforts, which were first reported by the Financial Times. The vertical-industry push is a reflection of customers' desires and the direction IBM would like to move the software industry, he added.

IBM's increased focus on vertical markets reflects the changing needs of customers, said Stephen O'Grady, an analyst with research firm RedMonk. Rather than purchase general-purpose software, businesses are seeking more specialized tools.

For example, many companies in the health care industry need to change their computing systems to adhere to privacy regulations, and financial firms need to address new guidelines to process securities transactions.

"(Companies) are looking to solve very specific problems," O'Grady said. "From a sales perspective, (IBM's industry orientation) is very much a reflection of the fact that sales people are not conditioned to speak the same language or lexicon as the customers are."

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IBM already sells industry-specific versions of its WebSphere integration software. The company intends to offer industry-specific versions of all its software brands as part of the sales process, Breuer said.

A vertical orientation for IBM's software sales dovetails with the industry orientation of IBM's Global Services division and its business consulting arm.

IBM is also pushing the use of Web services technology to allow customers and partners to more rapidly link software applications.