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4/11/2011
02:43 PM
Kevin Casey
Kevin Casey
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Is IBM's Pre-Engineered Platform Right For SMBs?

IBM's standardized IT services can reduce costs and project timelines for some companies, but that alone doesn't necessarily make Big Blue a match for small and midsize businesses.

Has Big Blue gone small and midsize, too?

IBM recently unveiled a menu of pre-engineered IT services--what the company calls "reusable service components"--designed to simplify projects and speed up deployments in areas such as storage, virtualization, help desk, and unified communications.

Around the time IBM made its announcement, I received an email from a PR rep working on the company's behalf. That's nothing remarkable by itself--my inbox is flush with similar pitches--but the subject caught my eye: "The Future of IT: Pre-Designed IT Systems for SMBs." A note with the release said: "These new pre-designed systems will help small and medium sized businesses." A separate email from the same agency stressed cost reductions and speedier launches: "IBM brings this solution to SMBs at a time when SMBs are looking to their IT divisions to both cut costs and stimulate growth."

Was IBM, an all-star of the enterprise, taking aim at SMBs? Faster deployments at reduced costs would certainly be the start of a compelling sales spiel, particularly in a segment where speed and budget consciousness are routine needs. Cutting down on complexity--especially at companies with limited internal IT resources--wouldn't hurt, either. But is IBM a good fit for smaller firms? The answer is a definite maybe: While IBM's outsourcing and cloud strategies may grant wider access to its services than before, the new pre-engineered platforms weren't tailor-made for SMBs, so whether or not they'll effectively meet smaller company needs remains to be seen.

I recently spoke with James Comfort, IBM's vice president of portfolio and strategic outsourcing offering management, and asked him for his thoughts on the company's pre-engineered services and whether or not they make sense for SMBs. He said that standardization can broaden IBM's reach beyond its traditional customer base, noting that a cloud delivery model enables a decoupling of the "how" from the "what" in IT services.

"Our whole intent is to introduce, in outsourcing in general, pre-engineered platforms," Comfort said in an interview. Comfort also has spent the past two years helping shape IBM's cloud strategy, and he sees a clear link between the two areas. "Part of the role is: How do we then use the cloud techniques in that business? I fully expect that to extend our ability to reach--either direct or through partners--into SMB in a way that we have historically [not done]."

Comfort said that while a preconfigured list of services might require a company to give up a degree of flexibility, that sacrifice is paid back in time saved and the corresponding productivity boost elsewhere in the business. It's also fundamental to widening IBM's potential relationship with smaller business customers.

"The beauty of the cloud thought and self-service in the portal is that, if we get the menu correct, the ability for any size business to access those standard platforms--or for me to do that pre-engineering and expose it to a new class of clients--is much, much greater," Comfort said.

Getting that menu of services right could indeed be the key. Steve Hilton, principal analyst at Analysys Mason, thinks that while pre-configured IT platforms can make sense for SMBs, IBM's offering is still best suited for enterprise customers. "IBM hasn't designed these pre-engineered IT services for SMBs. It's aimed at larger businesses," Hilton wrote in an email. "I like the concept of pre-engineered services templates or implementation templates for SMB IT deployments, but this offering from IBM was never meant to fill that need."

What's clear is that the access to IBM's portfolio is increasingly available to smaller companies, thanks in large part to cloud delivery and the variety of potential business models--such as pay-per-use--that might be applied to the same or similar services. As to whether the services catalog meets the needs of SMBs, that might take some more time to judge--and SMBs will ultimately vote with their wallets.

Comfort does not see the SMB market simply as a nice-to-have in terms of IBM's pre-engineered platform. "We participate in both SMB and large enterprise," Comfort said. "Our core business is enterprise and we start there and optimize for that, but we are actually looking at this and saying that separation is now blurring." Specifically, Comfort sees the boundaries between areas that were once considered separate lines of business--such as outsourcing, managed services, hosting, and applications on demand--shifting or disappearing altogether, especially when offered on a standardized platform. Comfort called it a "continuum of managed services," and it would appear that SMBs stand to occupy a larger portion of that band.

"The distinction between large companies get this and small get that goes away, and the distinction between a given company fits only in one of those models goes away," Comfort said. While things like service and usage levels might still be tied to customer size, the underlying technology is the same. "We want to get to thinking of it more of as a continuum, and how do we leverage pre-engineering of a given thing as broadly across that spectrum as we can, rather than creating something unique for each point on the spectrum."


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