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The product is among a series of recent or coming moves aimed specifically at the midmarket--which Big Blue defines as companies with between 100 and 1,000 employees--that serve both IBM's broader "flexible deployment" strategy as well as its relatively recent focus on the midsize segment, according to company executives. Flexible deployment refers to IBM's offerings across on-premises, cloud, and software-as-a-service (SaaS) delivery models.
BPM Express, for example, is delivered as on-premises software, but IBM also offers a lower-cost BPM application in the cloud, called Blueworks Live. On the IT management front, IBM recently launched the Service Manager and Applications Manager appliances, both based on Tivoli, but built for the midmarket. It likewise offers Tivoli Live, a SaaS platform for IT service management and monitoring aimed at smaller businesses with minimal IT staff.
"The flexible deployment is part of the overall IBM strategy," said Andy Monshaw, GM of global midmarket at IBM, in an interview. "However, the adoption is stronger up front in midmarket clients because of two basic reasons: One is just simplicity of deployment options. The second, especially when you talk about SaaS and cloud, is access to capital for these companies is still pretty tight."
Simply speaking, business process management (BPM) is a concept aimed at process improvements and optimization across an organization. Midsize firms, particularly those on the larger end of the segment, make an interesting market for BPM: They're large enough to possibly need it, particularly if they're experiencing significant growth and the potential pain points that can come with it. That assumption was confirmed in a recent IBM survey of more than 2,000 midsize firms: Roughly 70% said they had a BPM project underway or one in the works for the coming 12 to 18 months, according to Shaun Jones, IBM's VP of worldwide business partner and midmarket marketing.
"There's definitely a need that our clients are telling us that is emerging in the world of smaller companies," Jones said in an interview. "Every company, regardless of size, needs to understand the way things work in their organization because if you don't, you don't spot opportunities to drive more efficiency, eliminate costs, better use your resources, or spot where you can do better to help your overall growth."
Jones said that BPM tools for midsize companies have been lacking in the past, noting that IBM's own enterprise offerings were not a good option for the midmarket from a cost and complexity perspective. BPM Express is functionally similar to its enterprise counterpart, but with scaled down licenses: two authors and 200 users, versus unlimited with the enterprise version. The company said a typical BPM Express implementation runs around $70,000.
Blueworks Live offers smaller businesses--especially those getting their first formal taste of BPM--a lower-cost entry point. The cloud software runs $50 per editor, per month and $10 per contributor, per month. So a company with two editors and 100 users, for example, would spend $13,200 annually.
The variety of delivery options--and price points--ties directly to IBM's broader strategy, and to its approach to the midmarket. Midsize businesses concerned with short-term cash flow or unsure of how quickly they'll grow are particularly drawn to cloud and SaaS services, Monshaw said. (IBM's makes this distinction between the two: Cloud means multi-tenancy.) "Pay-as-you-use is really attractive to these companies," Monshaw said. "The strategy is not purpose-built for this space, but it has a high degree of affinity with this space."
While IBM's core business certainly remains in the enterprise, it has put increasing focus on smaller customers; it created a separate division focused exclusively on the midmarket segment about 18 months ago. "The reason we chose that market segmentation is there's a high correlation between companies that look like that and the fact that they have small IT staffs," Monshaw said, adding that those IT departments are often consumed with basic functions such as network management and desktop support, relying on outside partners for other needs. As a result, IBM sells to the midmarket strictly through its partner network, which both Monshaw and Jones said is crucial to the company's midmarket business.
"Just because a company is smaller doesn't mean that they have any less sophisticated needs or requirements," Jones said. "You just need to be able to address them in a more consumable fashion."
Monshaw said midsize firms can expect to see more from IBM in the future. "We will roll out significant capabilities around analytics, we will continue to rapidly enhance the offerings from the IBM cloud, and you will see IBM much closer with many announcements connected to the top, say, 500 applications that matter to this client set."
