IBM launches e-business-as-utility offering

TORONTO — At the historic Power Plant Art Gallery, former home of this city’s first utility back in 1880, IBM Canada Ltd. launched its e-business on demand initiative, which it described as similar to a utility like electricity, water, gas

and telephone.

IBM’s e-business on demand offers companies a way to acquire infrastructure, applications and business processes over a network on a pay-as-you-go model.

“”We are rapidly approaching a day where companies do not manage their own assets,”” said Rick Horton, vice-president of IBM Global Services (Canada), based in Markham, Ont.

“”It’s technology on demand like water and electricity and its saves big business millions of dollars. For small to medium-sized businesses or growing firms, they can access the best of technology on a pay-as-you go basis,”” Horton said.

Currently, IBM is offering electronic procurement, application hosting, business intelligence, e-learning, CRM, managed hosting and storage, network services, document exchange and content distribution as part of its e-business on demand services.

The channel community in Canada will have a role to play in this technology utility concept, according to Jim Corgel, general manager of IBM’s e-business hosting services out of Somers, N.Y. “”Partners are essential to our success in any aspect. Customers want the reliability of dealing with one point of contact,”” he said.

Corgel cited two U.S.-based ISVs, NetSolve and Cyclone Commerce, that have delivered e-business exchange solutions with IBM. He also said that IBM would more than welcome system integrators and VARs to join them to go to market for small business.

“”IBM is a leader in this with only eight per cent market share. There is a lot of growth to get at and we need the partners to help us,”” Corgel added.

However, the utility concept is not without uncertainty, said Vito Mabrucco, group vice president products and services research for Toronto-based IDC Canada Ltd.

There is still perceived risk over outsourcing a company’s operations to a third party, and someone has to assume the financial risks, which could reach billions, if the system a company is renting goes down, said Mabrucco. But many doubts are being quelled by the number of major financial instititions that have reached outsourcing agreements in recent months, he added.

This is also a desire, he said, for businesses to focus on their core competencies and away from managing the IT infrastructure. Corgel agrees. “”I have not met a manager who wakes up in the morning excited about going into work to manage the storage on his company’s network.””

Mabrucco also cited globalization, new technology, reducing costs on capital investments, and the fact that 93 per cent of businesses are either increasing or keeping the status quo on IT spending as drivers for the e-business as a utility concept.

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