“I get a kick out of the Small Medium Size Business division talking about pricing of under $20K / month. That’s a pretty penny, but I guess for company where downtime is priced in the thousands (or much more) per minute it might be a good buy. But companies fitting that description have always been big companies in my experience.”
Ah the old SMB problem, where IBM’s M is everyone else’s E, and IBM’s S is everyone else’s M.
$20k per month? Sounds like a good deal – where do I sign up?
Seriously – as I have long argued, IBM really needs to work out ways to touch smaller companies. Web 2.0 isn’t just about grassroots devs, but also service consumers and brokers.
How is IBM going to thrive in a world where the average deal size is 2c?
Google, Yahoo and Microsoft are acquiring cool firms long before they have time to develop a dependence on, or even orientation towards, IBM’s enterprisey products. Amazon and salesforce.com offer data storage and hosting. Google absolutely plans to be the great database in the sky, and in the world of the mashup data matters more than applications.
When Microsoft recently announced a multi-billion dollar investment in hosting for web 2.0 and so on, IBM’s response was silence. Maybe that was because of the impact on Microsoft’s share price when it announced a massive new capex program.
But hasn’t IBM already made that investment? You would think the firm can get a pretty decent deal on servers and storage. So what exactly is the role of IBM as a hosting company? IBM has all the infrastructure and potentially economies of scale – so why not leverage it.
Frankly I think IBM hosting and developerworks need to work out a plan. Developerworks needs to host/capture useful or cool services, not just content and downloads. IF I was Buell Duncan I would make John Musser an offer for starters.
Buell says IBM needs to be ready for software as a service. I think IBM needs to be ready for the grassroots. wasce may be less enterprisey than WebSphere classic, but that doesn’t mean its what the cool kids are using. eon, cognizant and centric CRM all look Web 1.0 to me.
Jon Collins says:
September 26, 2006 at 2:11 pm
IBM already does hosting – for the enterprise. Same old, same old!
September 26, 2006 at 2:15 pm
Good thing they don’t make shirts. Or maybe they do? Did you get a T-shirt from them recently?
Dan Davies Brackett says:
September 26, 2006 at 3:36 pm
What does IBM need to do to be better at reaching the truly small companies, James? I accept your contention that they do, but I’m at a bit of a loss to think of what actions IBM could take to make themselves appeal to small business.
One of the things that Sun does really well, and REALLY REALLY needs to spend more development and marketing time on, is put together rackable computers that come in a state where you can take them out of their packing boxes, plug them in, answer a few questions (“start apache on S3?” “what about postgres?”) and have a workable backend for your web business. Where does IBM fit into that world? How do they pare down the configuration-heavy business methods of their current, enterprisey customers to ones that are appropriate for small companies?
Jon Collins says:
September 26, 2006 at 7:13 pm
As well as having the right products (IBM’s enterprise-heavy approach is probably over-engineered for the SMB), its also a question of how you sell them. Smaller businesses tend to benefit from a combination of volume-direct and channel based approaches, neither of which IBM is famous for.
One of the things Sun has always done well is to grow its own channel partners by supporting them as they set up and grow (to the extent, I remember, of providing office space, phones etc until they were able to “leave the nest”.
vinnie mirchandani says:
September 27, 2006 at 1:29 pm
We have not even begun to talk about Micro – the “bottom of the barrel” pricing for the emerging world, from $ 100 laptops to very cheap broadband access…it’s starting to happen and will make current SMB pricing look expensive
Dennis Howlett says:
September 27, 2006 at 2:10 pm
Ummm.. .Google…Google…Google I hear whispered around and about. Now what do those guys know that oodles of years at Big Blue has not yet figured out?
James Governor says:
September 27, 2006 at 3:01 pm
Dennis- IBM may have already had all the ideas-but its a question of putting them into practice. there is no computer science challenge IBM doesn’t like to tackle, but this is about going to market, not sitting around in boffin heaven.
Vinnie-you make a great point. Turn it on its head too- I read today that Kenyan bloggers are making money on adwords. Imagine how much further the couple of dollars a month goes in many African countries. its not about covering web host costs, but potentially even making a living!
Dan – i am talking about some fundamentally different go to market approaches. today IBM is happy to “give away software” in the shape of open source-but what about giving away hardware for startups, and making up the cost elsewhere.
Savio Rodrigues says:
September 28, 2006 at 6:00 am
James, I began a reply, but it got out of hand and became a long post here: http://saviorodrigues.wordpress.com/2006/09/28/ibm-as-a-host-for-web-20/
But in summary, I think your assertion of a hosting infrastructure for Web 2.0 is one part of the puzzle for IBM’s strategy for Web 2.0.
If the hosting infrastructure is just a way to push more Java towards the customer/developer/partner, then a significant portion of customers/developers/partners will look for an alternative platform that lets them use LAMP to get whatever it is they need to get done.
A current Java-centric customer may actually, in the long run, want to write Web 2.0 applications using their favourite Java infrastructure, to leverage their Java investments. But in the (critical) short term while they get familiar with the ‘brave new world’ of Web 2.0, customers will follow the best infrastructure lead of Web 2.0 stars like Flickr or Zimbra.