IBM Lowers the Ante on Advanced Planning

SAN MATEO (03/20/2000) - In an effort to bring APS (advanced planning and scheduling) software to middle-market customers, IBM Corp. has enlisted i2 Technologies and Logility to port their APS applications to the AS/400 environment.

"We have a renewed vigor and targeting for this area," said Paul Woods, the global business development executive for the AS/400 brand, in Baton Rouge, La.

IBM, which defines the middle market as those companies with 100 to 999 employees, will further outline these efforts at its Supply Chain Executive Conference in Las Vegas this week.

The need for APS packages is clear in the midrange market, said Woods. APS helps prevent problems with predicting product configuration, availability, delivery, and order tracking.i2 is porting its flagship packages to the AS/400 platform, specifically i2's Rhythm Solutions, which includes TradeMatrix. The Rhythm software can be used for sourcing raw materials as well as for business-to-business trading networks. Product availability is set for the third quarter of this year, Woods said.

The Logility Internet-based solutions for distributors will be available for the AS/400e server, also during the third quarter.

To combat the price hurdle that APS packages have traditionally posed, IBM Global Financing is offering leasing options for the i2 and Logility packages.

Global Financing is also offering special leasing that will enable users to "sweep" consulting or systems integration charges into their equipment lease, IBM officials said.

The moment of truth for this effort will come when users sort out the actual pricing of the software, said Bob Ferrari, an analyst at AMR Research in Boston.

"APS software is not cheap. The average price can be $1 million to $1.5 million," he said. "Generally, APS was out of their league."

In addition to leasing options, one way around the pricing issue is for IBM or third-party software providers to take on the role of an ASP (application service provider) host, Ferrari said.

IBM hasn't ruled out the possibility of hosting, said Woods. "If a customer asks for that, there are no reasons why we couldn't do that," he said.

The key will be how users respond to the financing arrangements for these APS packages, Ferrari said. If users buy the programs, this will mean a longer life for the AS/400.

"IBM wants it to go on ad infinitum," Ferrari said of the stalwart midrange platform.

IBM, in Armonk, N.Y., can be reached at www.ibm.com.

Onboard IBM's supply-chain train

Big Blue has lined up several allies in its midmarket campaign.

* HostLogic: Young Enterprise e-business backbone and Logistix, a turnkey SCM system* NetVendor: E.mbrace e-commerce software bundled with IBM hardware and software* REAL Solutions: REAL Web Business, an IBM Lotus Domino-based application for building Web sites and for order-processing applications* Lilly: VISUAL CRM, a concurrent scheduling application running on Netfinity servers

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