IBM targets software for smaller businesses

By Julie Moran Alterio
The (Westchester, N.Y.) Journal News

IBM is rolling out cheaper, trimmer and more user-friendly versions of its software in a bid to woo small- and medium-sized companies.

The Armonk, N.Y.,-computer giant is a top purveyor of computers and technology services to the Fortune 500. Releasing "lite" versions of its DB2, Lotus, Tivoli and WebSphere suites signals a desire to attract business from smaller companies that traditionally view IBM software as too expensive or complicated for their needs.

IBM estimates the small- and medium-sized information technology market at $300 billion, citing International Data Corp. statistics. More than 54 percent of money invested on technology in North America is spent by companies with fewer than 1,000 employees, IDC reports.

Today, IBM derives about 30 percent of its $81.2 billion in revenue and 20 percent of its $13.1 billion in software sales from small- and medium-sized businesses, said Mark Ouellette, vice president of worldwide small- and medium-sized business software sales at IBM.

"The opportunity is huge and it's growing. These customers are starting to utilize the Web to run their business environment," Ouellette said.

IBM's new "Express" software offerings are cheaper than the full-fledged versions.

DB2 Express, a scaled-down version of IBM's flagship database software, will start at less than $1,000. Full-sized DB2 installations cost much more. DB2 WorkGroup Server Unlimited Edition, for instance, starts at $7,500 per processor. DB2 Enterprise Server Edition, which includes data warehousing and increased reliability, starts at $25,000 per processor.