IBM Preaches E-Business at Partnerworld 2000

SAN DIEGO (01/24/2000) - IBM Corp. kicked off its annual business partner show here today with keynote speeches from several top executives -- including a videotaped presentation from company Chairman Lou Gerstner -- highlighting the rich e-business opportunity the company hopes to focus on hand in hand with its resellers.

Highlighted in at least three presentations was the projection that e-business sales would grow exponentially, reaching US$1.7 trillion by 2003, with professional services claiming 56 percent of that figure, hardware taking 30 percent and software taking the remaining 14 percent.

"This is the first year where we don't have to think, 'Will e-business dwarf traditional business?' There has never been a better time to be in this industry," Gerstner told Partnerworld 2000 attendees.

Gerstner said that while there has been a strong trend over the past few years towards direct sales -- along with IBM, major competitors such as Sun Microsystems Inc. and Hewlett-Packard Co. are aggressively climbing into the services business -- IBM plans to still rely heavily on its business partners' and resellers' sales of products and solutions.

"IBM absolutely need its partners to meet its business goals, as well as offers users the incredibly broad range of solutions it needs to launch or improve its e-businesses," Gerstner said.

Gerstner said that customers' year-2000 "lockdown," which resulted in their cutting back on buying products and services, was a major reason for the company's financial showing, particularly in the second half of the year.

But with the vast majority of year-2000 fears now behind them, Gerstner expects many customers to "unleash a tremendous amount of pent-up demand," which should result in many more sales opportunities for IBM and its partners.

IBM officials said that they expect to double Big Blue's Web-based sales in 2000 compared to those of last year, which would bring them to about $22 billion in revenues. Company officials believe that number will lengthen IBM's lead as "the world's leading dot-com" company.

To emphasize its point about the importance of developing and selling products and solutions with its partners, IBM officials said that approximately 6,000 Internet-based startups launched last year, although many of them failed. Many failed because those who launched them thought venture-capital money would carry them through, only to realize that as their money ran out, in many cases, they also did not have the proper hardware and software architectures and solutions in place to be successful.

"Many have come to realize that money can't take you all the way through to success," said Sam Palmisano, newly appointed general manager of IBM's server group. "Some realize now they need a heavy-duty infrastructure consisting of the middleware and more robust platforms that IBM and its partners can provide."

IBM plans to give selected venture capitalist an additional $200 million to fund promising Internet-based companies. In turn, these venture capitalists will direct them to IBM's various product divisions to help them build their businesses.

In a fiery presentation, Palmisano said that IBM would aggressively target several major competitors in the server and storage businesses including EMC Corp., Dell Computer Corp. and Sun.

"We are going to put together and train a killer sales force and go after a company like EMC," Palmisano said. "We are sick and tired of getting sand kicked in our faces -- especially when it is done by ex-IBM executives."

In other announcements today, IBM officials said that the company would soon unveil a migration tool called Pace, which will help AIX users port their existing applications and create new ones for the AS/400 line of servers, further tying those midrange servers together.

The company also unveiled plans to blend its Websphere Web server product with its Net.Commerce, which will be the basis for its Websphere Commerce Suites.

Bill Zeitler, general manager of sales and marketing for IBM's software group, described the combination as the industry's first "personalized, tightly integrated solution" for applications such as online auctioning.

Company officials also said that they soon would kick off an aggressive advertising and marketing campaign to bolster IBM's redoubled efforts around its customer relationship management-based products and strategies.

IBM Corp., in Armonk, New York, is at http://www.ibm.com/.

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