November 22, 2002, 9:58 AM — Continuing its push to win small and medium-size business customers, IBM Corp. plans to announce Friday a new set of hosted applications offered in conjunction with its ISV (independent software vendor) partners and available on a subscription basis.
For a one-time set-up charge plus monthly fees, customers will be able to purchase products including Onyx Software Corp.'s CRM (customer relationship management) software, Intaact Corp.'s accounting system and HRSmart Inc.'s HR (human resources) management applications. Employease Inc. will begin offering its HR and benefits administration software through the IBM program early next year.
The applications offered will be hosted at IBM data centers and accessible through Web browsers. IBM's ISV partners will sell the hosted applications and handle customer billing, IBM said. Prices for the applications vary, but start at around US$50 per user, per month. The price tag for Onyx's CRM software, one of the program's more robust offerings, begins around $150 per user, per month, and increases as customers add on more modules.
ASPs (application service provider) such as Salesforce.com Inc., Salesnet Inc. and Oracle Corp. partner NetLedger Inc. have long been offering Web-based applications targeted at midmarket firms, loosely defined as companies with up to 1,000 employees. Mike Riegel, a marketing executive for IBM's e-business hosting, said the key benefit of IBM's hosted offerings versus those of an ASP is added flexibility.
"Pure-ASP (software) doesn't allow any customization. What's different here is that you can take a market-leading application like Onyx, run it as a utility in the data center, and have it at a 30- to 40-percent lower cost that if it were implemented in-house," Riegel said. No customers are yet live with the new hosted applications, although several are running pilot programs, Riegel said.
IBM will work with ISVs through the Application Enablement Program it announced last week to help additional partners adapt their software for sale as hosted services, the company said. The move is also part of IBM's embrace of "on-demand computing," a phrase that has become Big Blue's mantra since new Chief Executive Officer Sam Palmisano laid out the strategy in a speech last month.