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IBM, Palm ink handheld software deal

Businesses using Big Blue's e-commerce software will be able to access stored information via Palm handhelds, under the terms of a partnership expected to be announced Tuesday.

Businesses using IBM's e-commerce software will be able to access stored information via Palm handhelds, under the terms of a partnership expected to be announced Tuesday.

IBM said it will offer later this year the ability for Palm handhelds to get to information stored on servers running WebSphere, IBM's e-business software. Such access is already available to handhelds running Microsoft's rival Pocket PC operating system.

IBM will also resell Palm m515 handhelds, as it does Hewlett-Packard's Ipaq handhelds and Research In Motion's Blackberry e-mail pagers. In addition, IBM will make available its Lotus Sametime secure instant messaging program for the Palm and the two companies will jointly sell and develop handheld software.

The companies said the deal is a multiyear one and that no money is changing hands.

Palm has focused on partnerships as a means of boosting sales to businesses. The handheld maker has promised to have four such partnerships in place by the end of the summer. The company has already announced deals with Siebel Systems and medical consulting firm McKesson.

It is unclear to what degree IBM will be actively pushing Palm devices over those of rival companies.

"Our strategy is to support any device," said Sunil Soares, director of product management for IBM's pervasive computing unit. However, Soares said that IBM is taking some new steps with the Palm deal, in particular working jointly to develop and market handheld software. Palm is also licensing to IBM software that allows its handhelds to easily move from one wireless network to another.

"With the Palm folks we're going a step further," Soares said.

IBM had sold versions of earlier Palm handhelds under its own Workpad brand, but in February it said that it was discontinuing the products. Soares said IBM decided to stop selling the devices, in part, because it did not want its mobile strategy to be tied to a particular type of hardware.

Sales of the IBM-branded products were not that substantial. In 2001, IBM shipped 180,900 Workpads, or less than 2 percent of the 11.9 million handhelds sold, according to a preliminary estimate from market analysis firm IDC.

Palm Vice President Judy Kirkpatrick, who heads up a strategic alliance group formed at Palm earlier this year, said the deal with IBM involves dedicated teams at both companies, though she would not reveal how many employees are involved in the effort.

"This is the culmination of about six months of work with IBM," Kirkpatrick said.

IDC analyst Kevin Burden said it is important for Palm to make as many of these types of deals as it can.

"If there is a Pocket PC for sale, Palm needs to be right next door," Burden said. "I think this deal is certainly a lot more important to Palm than it is for IBM."

At the same time, Burden said it is still going to fall largely on Palm's shoulders to convince businesses that its handhelds are better than those offered by rivals.

"I don't think you can rely on the IBMs (or anyone else) to make that case for you," Burden said.

Kirkpatrick said that ultimately the success of the IBM deal will depend on the ability of the two companies to produce the best handheld option using Palm devices.

"What IBM is going to push is what their customers are asking for," she said.