IBM makes an Express play

A dissection of enterprise-class technologies has allowed IBM to create Express. The line includes combinations of server and desktop hardware; an SME version of Content Manager; and SME versions of server apps including WebSphere, DB2, Tivoli, and Notes; along with special financing options. Hardware in the line includes ThinkPad notebooks, NetVista desktops, and eServer xSeries servers. The WebSphere Commerce Express bundle enables the easy creation and management of e-commerce sites. IBM says a simple installation process allows users to build an online store in less than an hour.

The Express line is targeted at professionals likely to be found at SMEs, such as systems administrators, IBM software group vice president of development Chris Wicher said. “We don’t want mid-market users having to turn 250 knobs on a Web apps server, whereas an enterprise needs to do that to more properly optimise for a much more complex environment.”

Microsoft buys in

Not to be left behind, Microsoft has its own SME agenda. In the past two years, the company has purchased Great Plains Software and Navision, both specialists in developing SME software. Since those acquisitions, Microsoft has completed the integration of both companies’ development teams into its core SME development group.

“We’re trying to build an architecture that allows applications to be customised and to work together,” said Nigel Burton, general manager of Microsoft’s small and mid-market solutions and partners group. “The first product resulting from these integrated teams is Microsoft CRM, which has all the qualities we expect to deliver for all business solutions in the SME space.”

Some of those qualities include a simpler installation and configuration procedure than other Microsoft products geared toward corporate users with much larger IT staffs. The company has taken pains to integrate the SME product with desktop applications such as Outlook, Word, and Excel so data can be more easily shared.

Microsoft has also integrated the product with its complete stable of existing Business Solutions applications, all of which are sold exclusively to SMEs, so that mid-market clients have a reduced need for IT intervention because they can more easily perform data mapping for contacts, accounts, orders, and invoices. This way SMEs have a centralised view of all customer and product information.

Microsoft’s SME initiative may be held back by its inability to articulate .Net’s benefits to such users, said one Gartner vice president, Mika Krammer. “They created this mystique around [.Net] that people did not understand. Is it a product? A service? A concept?”

HP and Sun compete

Even Hewlett-Packard and Sun have recognised the importance of pushing an SME strategy. This year, each launched initiatives to package its latest low-cost hardware offerings with integration services and partner help.

HP is leveraging its hardware line-up, starting with ProLiant servers, to offer suites of services for SMEs. “We are strong with ProLiant servers and with imaging and printing, and we use these products to leverage some of our other products and solutions like PCs and handhelds,” HPs SME marketing director Chris Ogburn said.

Earlier this year, HP introduced the tc2120 server, a small-scale machine designed to run a limited number of PCs and link them in a network. The tc2120 server is a bridge allowing SMEs to begin projects and later scale to a ProLiant, HP said.

HP is continuing a partnership with JD Edwards — recently purchased by PeopleSoft — to integrate business processes such as CRM and SCM [supply-chain management]. The suite is offered with HP ProLiant DL580 and DL380 servers, along with Microsoft SQL Server software. It will be available later in the year with IBM DB2 UDB (Universal Database).

In June, HP formed a partnership with NetLedger to market HP hardware with NetLedger business management applications, enabling SMEs to manage their businesses using HP products, including HP Compaq Business Notebook nx7000 and Compaq Tablet PC.

Still, these alliances are not as extensive as IBM’s and Microsoft’s, said one analyst. “HP is strong in the core SME business of servers, PCs, printers, and other hardware. But in solutions, they are not as far along as Microsoft and IBM,” Summit Strategies SME practice director Laurie McCabe said. “But stay tuned — their strategy is in progress.

“[Sun] is focused on these specific markets and selected established ISVs and channel partners to help them,” McCabe said. “They’ve targeted niches in these markets, such as financial services within banking, and in these niches, they’ve done well.”

Sun’s iForce Community program works with channel partners and ISVs that build systems using Sun’s hardware and software. “We feel there is a real sweet spot in the sub-$100,000 server market,” said Bill Cate, marketing director of Sun’s reseller channels. This space includes Sun’s low-end, Intel-based, two-way V60x server, which is capable of running standard Linux distributions, Red Hat Enterprise Linux, or the Solaris OS; and V65x, a datacentre-class server.

Open source an issue?

Increasingly, SMEs are demanding that out-of-the-box solutions be based around Linux, for a number of reasons. What continues to pique the interest of many SMEs about Linux and other open source solutions is not just the cost but the increasing amount of local expertise these companies can now rely on. Although it will be quite some time before small companies begin installing complete stacks of infrastructure and platform software to run their businesses, many are beginning to incorporate pieces of open source software.

“The main criteria [for SMEs] is the availability of local skills. Linux is a good example of this, where it teetered along [and] smaller companies got a critical mass of local skills, and then it took off. When they can call someone from around the corner at 2am to come fix it, it will take off fast,” says Elaine Lennox, director of marketing at IBM’s global small and medium business group.

“SMEs are very conservative adopters of technology, and right now open source is not a standard for them. We also just witnessed a huge replacement cycle on the client side with many moving to Windows 2000 or XP, and on the server side to Windows Server 2000. SMEs don’t typically replace operating systems just because a new one comes on the market,” Gartner’s Krammer says.

(With Ed Scannell and Jack McCarthy.)

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