IBM Rides with Net-Delivered Apps

Network-delivered application services appear to be picking up steam with IBM's announcement last week of plans to provide local small- and medium-size enterprises (SMEs) with remote access to business and financial management applications.

Last spring, Hongkong Telecom unveiled its own network-delivered application service in Hong Kong offering remote, on-demand access to office applications.

Initially, IBM tested the waters for network services in Central America and Eastern Europe early last year, explained Thomas Bottin, business development executive for global services, emerging markets.

Despite having only "several dozen" customers installed worldwide, Bottin was adamant about the future of the new service. "We believe this [network delivered services] is very much the next wave of computing, as was the PC back in the early 80s," Bottin said.

As part of the service offering, IBM is aligning globally with U.K.-based Systems Union, a provider of financial and business management software. Through this alliance, IBM China/Hong Kong will offer users remote access to financial applications residing on an IBM RS/6000 SP, including: ledger accounting, multi-currency applications, fixed asset register, sales order processing, purchase order processing, inventory control, sales invoicing and purchase invoice register, according to Wallace Yu, small and medium business services manager at IBM Global Services.

Along with providing remote data access, data query, transfer and reporting functions, the service offers business users consulting services, installation, data migration, training, upgrades, maintenance and help desk services, Yu said.

On the customer side, the minimum networking, hardware and software requirements for setup include an Ethernet or Token-Ring network and 486-based PCs or later with at least 8M-bytes of RAM and Windows 3.11.

In Hong Kong, the first pilot customer is watch component trading firm Twino Co. Starting early this month, IBM will transfer Twino's accounting records, sales figures and customer information to its server and expects the project to go into effect by the end of the year, IBM officials said.

For its part, Twino will be using the service's ledger accounting, purchase order, invoicing, business analysis, inventory control and sales order applications.

Despite the regional financial downturn, the decision to outsource was not a product of the economic situation but a fix for Year 2000, said Francis Ma, managing director at Twino.

Achieving Y2K compliance is the main reason for signing up for the service, according to Ma. The accessibility of technical support was another determining factor, Ma said.

While Hongkong Telecom and IBM have made their move into the network-delivered applications market, and there is industry speculation that Oracle and SAP will follow suit, the future of the new service remains unclear. But early adopters like Twino's Ma maintain that network-delivered application services have a good chance of penetrating the mass market due to their affordability.

Costs for the service include a US$6,000 charge for the initial installation and data migration plus a monthly service charge of $255 or $220, depending on the mode of transfer, according to IBM officials.

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