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IBM woos smaller companies with server bundle

IBM is bundling its Websphere Application Server with its iSeries of servers, in an attempt to compete with BEA Systems among small to medium-sized end-user companies.

The bundle, called IBM eServer iSeries Powered By Websphere, contains Version 4 of Websphere and IBM's series of Websphere application development tools. There are also a number of optional services available, including custom installation, consulting, application design and prototyping.

"We are narrowing that part of the apps server market that BEA has been doing well in," said Scott Hebner, director of market management for IBM's Websphere and Application Tools group.

"By riding the popularity of the iSeries in the small to mid-sized markets, we have a better chance of taking away a chunk of business from [BEA]," he added.

Some analysts believe the bundle enhances IBM's chances at the lower end, because it brings together a number of the company's strengths.

"The advantage IBM has is it can offer a complete solution," said Michelle Rosen, research manager at IDC.

"Given that lots of people in the mid-markets are a little reticent these days to spend time and money on e-business projects, anything IBM can do to deliver more turnkey solutions will be to their advantage," she added.

Although Rosen says IBM has gained significant market share in the Web applications server market from 1998 to 2000, its momentum has slowed over the first half of 2001.

Increasingly Web application servers are becoming more of a commodity, with many second-tier vendors lowering their prices significantly. Rosen said this makes Web application servers more attractive to the small to medium-sized accounts that IBM and BEA are pursuing.

"The fact that the prices are coming down and dropping under the radar of higher-end IT guys and down more to department solutions will attract more departments than enterprises," said Rosen.

The version of Websphere for the iSeries also features an installation wizard, which makes it easier to configure the application server software.

IBM hopes to attract smaller accounts through iSeries' ability to support Windows, Linux and Java-based applications and the fact that it can support multiple virtual servers from a single location.

"We see a lot of small to mid-sized accounts moving from a simple Web presence to conducting e-business transactions using the Web," said Sandy Carter, vice-president of IBM's marketing and channel strategy. "We think this offering gives them a simple and more affordable way to do that."
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