IBM aims for midmarket with BI appliance server

IBM and Business Objects are preparing an appliance server for the midmarket

IBM hopes to bring business intelligence (BI) to a wider audience of midmarket customers with a new software stack developed in partnership with Business Objects, industry sources said.

The stack includes IBM's DB2 Data Warehouse Edition, Business Objects Crystal Decisions and a version of the Linux OS from Red Hat or Novell, the sources said.

The products have been integrated and come on a single disk, so they can be installed on a server at the customer's premises to get a BI system up and running quickly, the sources said.

IBM has worked to simplify the installation process by automating set-up and configuration tasks, reducing room for error. The result is a BI appliance that can be set up and ready to load data far more quickly than most BI systems today, according to one source.

The software is expected to be announced in the coming weeks and shown at the Cebit trade show in Germany later this month. A shipping date wasn't available, and representatives from IBM and Business Objects declined to comment. The product is being tested by some customers now, a source said.

It comes at an interesting time for BI software, which is used by companies to collect and analyze data and help them improve the performance of their business.

On Thursday Oracle announced a deal to acquire BI software company Hyperion Solutions for US$3.3 billion, and analysts predict more consolidation as big vendors like IBM and Microsoft add further BI capabilities to their products.

The product from IBM is an attempt to make BI more appealing to midsize customers -- a market Business Objects has been targeting with its recently launched Business Objects Crystal Decisions. It may be followed by similar products from IBM aimed at bigger companies, and with software from other partners.

The new product is a "soft appliance" -- or a stack of software for a specific task delivered ready to install on a server. It differs from a true appliance server, in which the software and hardware are delivered together preinstalled.

Some other vendors, notably Netezza, sell data warehousing appliances with some analytics capabilities built in. IBM may be going a step further by including third-party BI tools as well -- although analysts said it's difficult to tell how innovative the product is without having seen it.

Alys Woodward, an analyst with IDC, called it a new approach for IBM and one that validates the server appliance model. It could also help Business Objects to fend off a challenge in the midmarket from Microsoft, which has been adding BI capabilities to its SQL Server database, she said.

Ian Charlesworth, an analyst with Ovum, said Business Objects was the right partner for IBM to pick. "Crystal Decisions is very popular. It's easy to install and it's lightweight. If you were looking to do a one-disk install that would probably be the best one you could choose," he said.

Each server can scale up to about a terabyte of data, and an entry-level system for 100G bytes of data could be priced at around US$25,000, including the hardware and software, a source said.

Jonathan Eunice, an analyst with Illuminata, called it an attractive entry price, although the value of the system will depend on its performance capabilities and other parameters, he said.

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