Software-as-a-service has rattled traditional software's cage in lots of different ways, not the least of which is creating user expectations that software should be easy to purchase. Those growing expectations, combined with vendors' desire to reach the often-elusive SMB market, have led IBM and Intel to create online software marketplaces. IBM's Global Applications Marketplace, or the Blue Business Platform, will allow companies to browse and purchase business applications from ISVs around the globe. IBM partners will then install and manage the apps, reports PC World. All customers must have an IBM server. IBM is also adding a Web 2.0 twist by including customer reviews.
Here's how it works: Customers enter parameters such as number of employees as they shop, and the system will provide recommendations, including in some cases IBM infrastructure software. IBM then will relay the order to a local reseller for deployment and management.
While just 10 ISVs had implemented the APIs necessary to participate in the program when it was introduced last week, Big Blue hopes to line up thousands more. It is establishing "innovation centers" where ISVs can add the APIs to their software.
Both traditional on-premise software and SaaS will be sold, although IBM expects most of the purchases to occur in the former category. Though some resellers may feel threatened as the model allows SMBs to download and install some software themselves, IBM is emphasizing its partners' participation, saying most SMBs will want their IT expertise.
IBM also rolled out Lotus Foundations Start, a package of Lotus and Domino software that is pre-installed on a server and is designed to fulfill all the collaboration needs of companies with up to 50 employees, including e-mail, directory services, backup and recovery. With an entry-level price of $1,500, it's the first of what IBM says will be a series of "appliance servers" it intends to release.
In a similar model, Intel just introduced the Intel Business Exchange (BX), a Web site designed to make it easier for companies to purchase software from vendors including Microsoft, Fonality, Salesforce.com, Symantec and Tripwire. Potential customers will be able to research the options, request quotes and connect with resellers, with Intel's help, reports internetnews.com.
The first Intel partner to adopt BX is AllBusiness.com, an online media and e-commerce company owned by Dun & Bradstreet that is using BX to power its AllBusiness Exchange.
IDC analyst Richard Shim likes these kinds of one-stop-shopping approaches. He tells internetnews.com:
... it's less about the hardware and more about the complete solution, that it's more about software, and it's aimed at an audience that doesn't have a lot of time to invest in things that are important like security and manageability.
The model being used by IBM and Intel sounds like what Colleen Smith, VP of Software-as-a-Service for Progress Software Corp., predicts will become more common. As she told me in an interview last month, the key advantages for software customers include lower prices and less management complexity. She says:
... because of the economy of scale, the price point is going to be lower. The service provider can offer 10 services to you as a customer. They are going to get a better deal because they have tens of thousands of customers. So they can lower the price point those customers will pay. The second advantage to the customer is that the service provider is integrating all those back-end processes. They are really your outsourced IT organization. If you add the vertical network slant, a third advantage to the user is the service provider understands the (vertical) industry. You might be buying content in addition to applications for a specific vertical. The merging of those two is something that end users have been wanting for a long time.