LAS VEGAS — Independent software vendors will spurn partnering with Microsoft because it competes with them in business applications, a senior IBM Corp. executive said as his company rolled out more initiatives to lure ISVs into its embrace.

“”It’s

inevitable,”” Steve Mills, IBM’s senior software group vice-president told reporters at its annual PartnerWorld conference here. “”The sense that Microsoft is going to continue to expand their application base leads thousands of software vendors recognizing they are likely to face formidable competition.””

IBM, on the other hand, stopped building applications several years ago and now pitches itself as an neutral company offering ISVs know-how. That, he said, “”is a powerful value proposition and one that leaves them with room to make money.””

There is, however, a price Big Blue asks software vendors to pay for its financial and marketing support: stop developing their applications in proprietary languages, such as Microsoft’s C# and Visual Basic.

Not that the company is against Windows, he added: Last year IBM did US$2.5 billion in business on systems and applications running Microsoft’ operating system. he noted. But its developers only write in languages that are portable across platforms, such as Java and C++. What IBM offers software vendors is expertise in developing on its open standard middleware such as WebSphere.

Asked whether the strategy may backfire if ISVs pressure customers to move their systems to IBM, who then complain about a loss of flexibility, Mills shrugged. Applications written in portable code can run on other companies’ systems, he acknowledged. “”If someone comes in and one-ups us, we’ll be out,”” he added.

Sitting in the audience was Michael Haines, a principle analyst for services marketing at Gartner Group, who advises industry giants like Microsoft on their marketing and channel strategies. After leaving the conference he’s flying to Microsoft headquarters to consult with it on the knotty problem of dealing with software vendors who are both partners and competitors.

For example, after years of partnering with Vancouver’s Pivotal Corp., a customer relationship management software developer, Microsoft has come out with its own CRM app. In recent years Microsoft snapped up Great Plains, Navision and others to try and create an enterprise resource management suite of products for small and medium companies.

“”Microsoft has got to make some decisions as to what they do,”” Haines said in an interview. Others in the same boat include Oracle, Sun and Hewlett-Packard, he said.

By contrast IBM is “”somewhat unique”” in that it’s not in the software applications business. “”I’m happy to hear they’re sticking to their guns on that,”” he added, “”because there’s a temptation for a company their size to jump into the fray.””

IBM announced here it is increasing attempts to persuade ISVs to build applications on its middleware, part of a strategy to capture a bigger slice of IT business from small and mid-size companies.

To that end it said it will spend US$1 billion this year on ISV-related programs to help them re-write code from proprietary to open languages and standards and on joint marketing efforts.

IBM is particularly going after software vendors with industry-specific applications, which it believes will be particularly appealing to medium-sized companies.

One existing initiative, called PartnerWorld Industry Networks for ISVs, is a Web site of benefits for these ISVs with advice to help them improve business process performance. Initial industries targeted include retail, healthcare, life sciences and telecommunications. Five more industries will be added in the middle of the year.

Another section, called ISV Advantage for Industries, partners are expected to make a commitment to specific IBM middleware and hardware to support Big Blue’s ‘on demand’ strategy.

Comment: info@itbusiness.ca

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