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IBM launches 'Smart Cube' with app store

In many respects, IBM's Smart Cube for businesses emulates Apple's model with the iPod and iTunes, tightly integrating hardware, software, and a marketplace.

This was originally published at ZDNet's Between the Lines.

IBM on Tuesday announced a pact with Intuit for an integrated server that's designed to be a small to midsized business IT department in a box. The appliance, dubbed the Smart Cube, is designed to offer e-mail, calendaring, security, finance, and other enterprise apps out of the box.

In many respects, IBM's Smart Cube emulates Apple's model with the iPod. The big pitch is to integrate software and hardware (iPod, Mac) in a tight package with a marketplace (iTunes). Big Blue's Smart Cube is lumped into its Smart Business offering, which includes:

IBM Smart Cube
Larry Dignan/ZDNet

• The Smart Cube hardware, which starts just under $8,000;
• Smart Market, a marketplace for customers to download enterprise applications (so far there are 48 business apps from 17 software companies);
• Smart Desk, a dashboard for maintenance, to manage applications on the Cube and in the cloud;
• Integrated Intuit's QuickBooks Enterprise.

IBM's claim for small and midsized businesses (SMBs): Four steps and you're running without manuals, installation CDs, and configuration hassles. The Smart Cube is sold through channel partners. IBM argues that these value added resellers are the preferred channel for many small businesses. However, IBM will be the sole point of contact for technical support.

Big Blue's sweet spot is expected to be for companies with 15 to 1,000 employees. The target market for QuickBooks enterprise is companies with 20 to 500 employees.

The big pitch to SMBs is that they can save on labor and time because the IBM lineup won't require integration work.

Matt Friedman, vice president of marketing for IBM's Smart Business unit, said the Smart Cube has print serving, VOIP, database, network, storage, and backup settings integrated.

Friedman made a point to note that the Smart Cube isn't preconfigured as much as it is integrated at the factory with more than 150 IBM patents. Friedman considered it a software and services in a box effort. "We automated the complexity," said Friedman, adding that the Smart Business platform is designed to run "all core business applications from ERP to supply chain to CRM to vertical industry apps."

As for the ROI case, IBM argues that SMBs can save $20,000 over three years relative to similar Microsoft Windows-based offerings from Dell and HP. Most of that savings derives from the labor associated with deployment, maintenance and system and software management. The Smart Cube comes in two flavors-Linux and IBM's i operating system.

Other key points:

• Independent software vendors (ISVs) pay IBM to have their applications listed in the Smart Market. IBM drives demand and offers the technical support. Friedman wouldn't disclose the license revenue split, but did not that it's "not dissimilar to the Apple model."

• The Smart Market allows potential customers to compare applications by industry, company size and categories.

IBM Smart Market
Larry Dignan/ZDNet

• IBM's market place won't do freebies. Some apps ran north of $70,000.

IBM market prices
Larry Dignan/ZDNet