IBM is reorganising its $13.1bn software business,
focusing its sales and development efforts around a dozen vertical
industries.
The company will retrain its staff so that more than half of its
13,000 worldwide sales employees focus on industry-specific product
sets. It will also shift its marketing and development efforts away
from a focus on IBM's five software brands and toward cross-brand
application packages tailored for specialised industries, according
to spokesman John Reilly.
The changes will come throughout the next year, and will affect
all aspects of IBM's software group's operations, including IBM's
partnership programmes.
Next month IBM will announce a selection of middleware packages
for industries including insurance, banking, financial services,
automotive, retail, consumer packaged goods, utilities,
telecommunications, electronics, health care, government and life
sciences.
IBM cited its forthcoming insurance industry offering as an
example of its new approach. The bundle will be an integrated
package of applications including WebSphere for managing claims
processing and workflow, DB2 Information Integrator for aggregating
claims information from disparate databases, and Lotus Notes as a
front end for insurance agents.
Packages will also be unveiled which will help retail companies
manage store operations, marketing and inventory, and an automotive
industry bundle with support for dealer collaboration and
build-to-order manufacturing.
IBM began targeting vertical industries in mid-2003 with
packages built around its WebSphere Business Integration software.
It has also built industry bundles as part of a push to increase
its sales to small and midsized businesses, an initiative that
relies heavily on IBM's channel resellers and relationships with
ISVs (independent software vendors).
Several years after its rocky acquisition of Lotus Development,
IBM decided to stop selling applications and focus instead on
providing middleware, hardware and services to support applications
developed by its partners, which include top business
applications suppliers such as Siebel Systems and SAP, along with a
host of smaller ISVs.
In April, IBM created ISV Advantage, a support programme for
ISVs which specialise in serving midmarket customers and are
willing to commit to using IBM technology in a significant portion
of their customer projects.
As part of its vertically focused shift, IBM will adjust that
programme to encourage participating ISVs to couple their
applications with IBM's industry-specific middleware products.
IBM will co-market third-party applications optimised for use
with its hardware and software, particularly software in its
midmarket-aimed Express portfolio of scaled-down applications.
IBM's software group posted revenue of $13.1bn last year, and
brought in $10.1bn in the first nine months of 2003.
The division includes five software portfolios, IBM's WebSphere
application server and integration software, DB2 database, Rational
development tools, Tivoli management software and Lotus
collaboration and information management applications.
Stacey Cowley writes for IDG News Service