eWeek Channel Insider: Palmisano: SMB Will Be IBM’s Largest Market in Five Years

May 7 2007

Have I said that the attitudes in this space in IBM are changing?

In a wide ranging keynote speech at the company's PartnerWorld conference, IBM Chairman and CEO Sam Palmisano predicted that the small to medium business market will become IBM's largest customer segment within five years.

IBM defines the SMB market as customers with 250 to 1,000 employees ...
Link: eWeek Channel Insider: Palmisano: SMB Will Be IBM's Largest Market in Five Years >

Ed Brill Highland Park, IL USA Category:  IBM  Add/View Comments [24]

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  1. 1  Peter Ward http://www.interdynaka.com | 5/7/2007 8:53:15 AM

    Prices will certainly need to be lower and more free trail samples

  1. 2  Ed Brill http://www.edbrill.com | 5/7/2007 8:55:40 AM

    @1 could you give specific examples?

  1. 3  David Jakelic  | 5/7/2007 9:18:30 AM

    >>

    But in order for IBM channel partners to be successful, Palmisano said that going forward, solution providers will need to focus on innovative solutions that drive business value around collaboration and globalization.

    <<

    Did you know that *ISV* partners are required to provide customer stories not only about IBM software platforms, but also IBM *hardware* in order to obtain the Advanced partner level? Why should ISV partners investigate what hardware a company uses?

    I'm afraid some attitudes never change...

  1. 4  Richard Schwartz http://www.rhs.com/poweroftheschwartz | 5/7/2007 9:25:05 AM

    Is there a transcript of his speech? I'd like to search it for the word "education".

    -rich

  1. 5  Brian Green  | 5/7/2007 9:51:19 AM

    Good stuff. We're an SMB, and received 2 IBM calls in the past week. Nothing in the previous 5 years.

  1. 6  Phil West  | 5/7/2007 10:01:37 AM

    "IBM defines the SMB market as customers with 250 to 1,000 employees ..." so what is a customer with <250 employees?

  1. 7  Charles Robinson http://cubert-codepoet.blogspot.com | 5/7/2007 10:02:36 AM

    If IBM is to stay in business the shift is inevitable. Consider a simple math exercise based on data from the US Small Business Administration { Link } :

    Companies with > 500 employees = 17,000

    Companies with < 500 employees = 25,783,000

    That's a no-brainer.

  1. 8  Stuart Bogom  | 5/7/2007 10:11:16 AM

    @2 - Probably not your responsibility, but Document Manager trials don't appear to exist. I wanted to show it to a small law firm client but couldn't find a way to do it through IBM.

  1. 9  Nathan T. Freeman http://nathan.lotus911.com | 5/7/2007 10:13:16 AM

    @8 - LDDM is being phased out in favor of the massively more flexible Quickr. Show them that instead.

    { Link }

  1. 10  Thomas Schulte http://www.welovenotesbut.com/blog | 5/7/2007 10:21:18 AM

    @6 well that must be an USB (Ultra Small Business) ...

    But it may last another 20 years until IBM accepts that you can do business with companies of that size also.

    As the company i work for is right now in the new focus of IBM, i will be eager to wait for an IBM representative to talk to us. For the last 10 years we have not seen anyone.

  1. 11  Peter Ward http://www.interdynaka.com | 5/7/2007 10:37:25 AM

    @ 2.

    SharePoint wss (Sharepoint light) is free with Windows 2003. Very appealing to a SMB.

    A 'Notes/Domino light' would be nice.

    There are lots of free trails for MS and non MS software, not too my knowledge, not much for Domino, or mail.

  1. 12  Ed Brill http://www.edbrill.com | 5/7/2007 10:45:37 AM

    @6 called VSB (very small business).

    @10 We did just introduce a 10-user starter pack, I'd certainly assert that is designed for companies of that size. And I posted a case study last week for a company with 70 users.

    @11 Tools like Quickr personal edition, integrated IM in the Notes client, entitlement to Tivoli Directory Integrator in Domino 8, etc. are all designed to provide free or lightweight expansion of the tools available.

    Free trials -- not sure whether you mean trial downloads or soemthing else. There is a Notes/Domino trial download, a WebSphere Portal Express trial download, and there will be one for Sametime 7.5.1 any day now. Quickplace and Domino Web Access have trial websites on ibm.com.

  1. 13  Henry Ferlauto http://www.geniusinside.com | 5/7/2007 11:33:17 AM

    Great to see some definitions of SMB and VSB.

    I hope the ACTIONS from IBM follow these great words. Please keep the crowd abreast of specific new major initiatives.

    The most promising part of the article (at least from the Lotus perspective) is, "Everything we do is about innovation and collaboration. We don't want you to think that IBM is trying to become the next GE holding company in technology."

    I would be interested in learning more about the blade center initiatives (paragraph 3). While we do not sell hardware, it is frequently a topic of conversation when dealing with the IT personnel.

  1. 14  Nathan T. Freeman http://nathan.lotus911.com | 5/7/2007 11:52:59 AM

    Manual Trackback...

    { Link }

  1. 15  Volker Weber http://vowe.net/about | 5/7/2007 1:30:36 PM

    Well, well, well. You would not believe how many SMB initiatives I have been briefed on by IBM in the last 15 years. It will be interesting to see how you can shrink products which have been built for Gulliver to a size digestible by inhabitants of Lilliput.

    250 is quite a maxi Bonsai though. :-)

  1. 16  Nathan T. Freeman http://nathan.lotus911.com | 5/8/2007 6:41:47 AM

    So I went back and looked at the US SBA numbers here, and Palmisano's statement doesn't make any sense.

    Employees in enterprise companies (10000+): 30 million

    Employees in large companies (1000-9999): 20 million

    Employees in IBM-defined SMBs (250-999): < 14 million

    So, how would it be IBM's largest market? By getting spending/employee to be DOUBLE what it is in the enterprise market?

    Unless Sam's plan is to concede massive amounts of the enterprise market, his statement is pretty much impossible. Given the difference in IBM's penetration in those top tier customers vs. the SMB market, I just don't see how this pronouncement makes any sense. Maybe, if IBM were genius at this, they could see the single largest REVENUE stream come from there, but it would be far from the most profitable group, as the cost of sales would be through the roof.

    Cross-posted on my own blog.

  1. 17  Nathan T. Freeman http://nathan.lotus911.com | 5/8/2007 6:52:08 AM

    Ah, I get it...

    "which Palmisano explained at a compound rate would allow the SMB segment to surpass the financial services sector as IBM's largest customer."

    So SMBs are all lumped into one sector for this defition, whereas larger organizations are divided along enterprise lines.

    Because I guess as soon as you cross 1000 employees, your needs become industry-specific, where at 300 employees, every organization is the same.

    (Cross-posted again.)

  1. 18  Sean Jennings  | 5/8/2007 8:09:36 AM

    re @11

    Now that IBM is no-longer in the desktop/laptop market through the sale to Lenova, perhaps IBM could look to get some free trial software pre-installed on pc's sold by Dell, HP, etc? Difficult to know what though, as most of it needs a 'server' install as well as the client, and many of these pc's are for the consumer-market too.

    Hopefully, IBM already includes free-trial software of everything (Domino, Sametime, etc) on all servers it sells?

  1. 19  Heiko Voigt http://www.sit.de | 5/8/2007 8:50:49 AM

    @9 - Will Quickr really contain all the programming and integration possibilities of LDDM, for example to archive solutions ? If yes, great, if not - nice frontend but not good enough even for VSB's in today's world where e.g. e-mail governance get's more and more important. BTW, how is pricing for Quickr (not personal edition) compared to LDDM ?

  1. 20  Nathan T. Freeman http://nathan.lotus911.com | 5/8/2007 11:45:41 AM

    @19 - The plan is for LDDM to be merged into the Quickr code stream. I'm sure there's no officially published schedule for it, but the slide I saw said 2H 2008, with a giant caveat that this is not commitment information.

    I can't imagine that wouldn't include archiving solutions, particularly since you can already archive any Domino database today, and Domino is one of the storage platform options of Quickr.

    That being said, I don't know that the target would be for Quickr to assume the entire conceivable function set for LDDM. If you're using LDDM as a messaging retention platform (why would you do this, by the way?) in a VSB, you might not want to do the same thing with Quickr. You'd need details from IBM on the best strategy from that point.

  1. 21  Heiko Voigt http://www.sit.de | 5/9/2007 3:14:10 AM

    @20 - we have several VSB customers using LDDM as a part of their staging in archiving solutions. They have binders e.g. for projects they work on and usually add e-mails to them (what makes btw. perfect sense to me) - usually, these binders get long-term archived into other systems with tape or dvd storage.

    I know the slides form lotusphere, but I am not aware of a comparison chart between LDDM and Quickr.

    I agree with you, that not all that's in LDDM today needs to be in Quickr.

    My personal concern is, that IBM is positioning Quickr as the only and overall solution in document handling - and as far as I see it, it's not the one and only right tool for every problem in document management in the Notes area. Losing LDDM from my perspective and having Quickr as the only alternative from IBM may fall too short. That's why I'm interested in a functional comparison and a more detailed road map. Especially, as LDDM is an attractive system for VSBs in Europe also due to the moderate licensing costs... .

  1. 22  John Foldager http://www.izone.dk | 5/14/2007 5:10:44 AM

    In Denmark I guess that VSB would be 1 person and SMB is from 2 up to 200/250 people. Around 90% of all companies in Denmark belong to SMB(!!) market and I believe that Denmark is actually one of IBM's best markets for both Lotus Notes/Domino and Server i (AS/400) if you count number of sold licenses/boxes per citizen, right?

    So my guestion would be... is SMB still 250+ employees for IBM in Denmark?

  1. 23  Mika Heinonen http://siipi.com/mika | 5/14/2007 5:27:29 PM

    I think Domino doesn't include a out-of-the-box tool like SharePoint, because every newbie can write such tool in a few hours using the standard Domino Designer.

    But, if someone has any doubts about it, I guess openntf.org will soon have a SharePoint killer. What's needed to kill it? Most stable web server in the world: IBM Lotus Domino, Check. Fastest hardware server in the world, IBM System p, Check. Fastest database engine in the world: IBM DB2 server, Check. Microsoft, just go home, please?