IBM Corp is hoping that its position as one of the leading platform vendors in the ERP software arena will help it gain a foothold in the supply chain management market. And as such it has combined its ERP and supply chain divisions into one unit with joint sales and marketing. Big Blue, which has got the ERP market all but sewn up, has started an aggressive campaign to partner with ISVs, systems integrators and resellers in a bid to cash in on the fast growing market for supply chain software. It is hoping that its dominance in the ERP sector will encourage pull through – both in terms of vendors and customers – into supply chains. The company already has relationships with all the leading ERP vendors, all of which have developed or are working on a supply chain offering of their own.
Under a separate division, it’s also targeting the customer relationship management (CRM) sector, another rapidly-growing area in the software market, and is currently holding meetings to decide which CRM vendors to partner with. Likely candidates include the leading standalone vendors including Siebel, Vantive and Clarify as well companies like SAP and Oracle who are also aggressively targeting the market. IBM said it plans to offer all the leading SCM and CRM software application suites across a mixture of its four server platforms – Netfinity, AS400, S390 and RS6000. But rather than just offering hardware, software combinations, it wants to get vendors to agree to position their products within IBM’s application framework – its set of key middleware offerings(including MQSeries, Websphere application server and Tivoli TME network management software and Lotus Domino. IBM makes most its profits from software sales and it knows if it can persuade the ISVs and their customers to buy into its application framework, then it’s got them locked in and reliant upon the IBM for upgrades and ongoing support.
Last week, the company signed its first global alliance with a supply chain vendor, i2 Technology Inc, and as part of that agreement, i2 agreed to use IBM’s application framework as the underpinning of its supply chain offerings. According to Michael Flood, marketing executive of ERP and SCM, IBM wants to sign similar deals with other supply chain and CRM vendors. We want to get the vendors using our application framework for e- business, he said, we’ll use i2 as the template to signing deals with the rest of the top solution providers.
The joint supply chain and ERP unit, which will have combined sales and marketing, is being run by Bill Paulk, who now becomes IBM’s general manager, ERP/Supply Chain solutions while Stephanie Hahn will head up the CRM division. First IBM will concentrate on beefing up its supply chain offerings, Flood said, but a push into the CRM sector will follow soon after. Crucially, Flood says that Big Blue realizes that to be really successful in these fast moving markets, IBM needs to partner with systems integrators and resellers, which isn’t something the giant has traditionally been used to doing. Before IBM had a very naive approach to the world, but we’re currently going through a cultural change, he said. In the past everything we did had to be 100% IBM, from the manufacturing to the marketing to the selling, we wanted to cover everything for ourselves. But Flood says that attitude has changed and the company is now aggressively targeting the leading SIs and resellers in both the SCM and CRM markets. The Titantic turns slowly but once it’s turned, it’s a powerful force heading in a certain direction.
It’s still not 100% clear what IBM intends to do with its own SCM and CRM offerings. The company has various proprietary SCM applications as well as a CRM suite from its CorePoint unit. It’s clear that IBM doesn’t want to compete as a software vendor per se and it’s unsure what to do with the products. Flood said it’s most likely that IBM will end up divesting itself of some of the applications and keeping others, which it will encourage its ISV partners to sell as pa
rt of their joint IBM package.
