Last Tuesday, IBM added over 20 new offerings to its Express portfolio of products and services for mid-sized companies. Just as importantly, the company discussed how it is using the portfolio to encourage more mid-market solution providers to sell IBM products and services. The strategy should put extra muscle behind the IT vendor's efforts to boost sales among mid-market firms.
Among the many announcements that IBM has made since it launched the Express portfolio three years ago, the current one stands out in its emphasis on vertical industry solutions. Most of the new offerings address specific challenges faced by the manufacturing, retail, healthcare, and life sciences industries. Since many iSeries users are manufacturing or retail firms, several of the new offerings for these industries could be of interest to them.
Another distinguishing feature of the latest announcement is its focus on IT services that IBM manages and hosts. While the Express portfolio already contains several managed services, the new offerings significantly expand both the number and the sophistication of such offerings.
With these thoughts in mind, let's look at some of the new Express offerings that will generate the greatest interest among iSeries users. As you will see, many of the offerings integrate IBM products with services.
- The IBM Express Supply Chain Diagnostic Solution helps companies to optimize their supply chains to improve return on assets, operating margins, and customer satisfaction. During a two- to four-week engagement, customers work with IBM Global Services to benchmark their operations, develop "what if" scenarios, and create a road map for supply chain optimization. A typical two-week engagement costs $50,000.
- IBM's Express RFID Services family of offerings now has a "slap and ship" service. Under the service, IBM helps companies comply with their customers' RFID requirements by deploying on-site RFID printers and scanners. The equipment links to an IBM hosting center that not only manages the RFID data that is generated, but also enables companies to send advanced shipping notices to customers. IBM is pricing the offering at $20,000 plus a $750 monthly fee.
- Through IBM's Product Lifecycle Management (PLM) Express for Business Integration, companies can integrate their PLM systems with their enterprise resource planning (ERP) applications. The offering combines hardware, software, and services from both IBM and qualified Business Partners. By integrating their PLM and ERP systems, companies can significantly reduce production costs, improve product quality, and reduce cycle times.
- The IBM Express Online Backup for Distributed Servers enables companies to back up data from multiple servers to an IBM hosting center on a continuous or scheduled basis. Besides providing companies with an off-site disaster recovery solution, the offering could help some firms comply with records management regulations. IBM is pricing the offering on a "per gigabyte" basis and expects that the average contract will cost around $4,000 per year.
While IBM is heavily marketing its products and services through the Express portfolio, it is also promoting Business Partner solutions that run on Express products. Earlier this year, the company unveiled a program under which partners can put a "Built on IBM Express Portfolio" logo on their solutions that run on Express products. As part of the program, IBM promotes the solutions through advertising and demand generation campaigns. Last week, IBM pointed out that over 150 partner products now carry the new logo. The company also pledged to make it easier for more Business Partners to build solutions that incorporate Express products and services.
Expanding the Express Franchise
By convincing Business Partners to build their businesses around the Express portfolio and brand, IBM is doing something that could prove to be a stroke of genius. Years ago, entrepreneurs in the fast food industry realized that they could achieve explosive growth by franchising their products and brands to local businesses. In much the same way, IBM is letting partners use its Express products to whip up their own solutions for local consumption. As a result, the number of products and services that bear an Express logo could expand exponentially. In the process, the Express portfolio could become not so much a line of IBM products as an industry-wide franchise with an overarching brand identity.
While IBM could benefit immensely from becoming the McDonald's of mid-market IT solutions, it could also damage the Express brand in the process. Unlike fast food companies, IBM can influence but not strictly control how its technologies (or "ingredients" in fast food parlance) are used to create solutions. As such, the resulting "Built on Express" products could vary widely in their packaging, ease of deployment, and ease of use. This could negatively affect how mid-sized companies perceive all Express products and services.
To avoid such negative consequences, IBM will need to expand its Express franchise with one eye on marketing and the other on quality control. By offering the right tools and incentives, IBM could do much to help its Business Partners adhere to the same Express product criteria that the company sets for itself. While some of those tools and incentives are already in place, more will be needed to ensure that partner products meet mid-market requirements. In the meantime, potential buyers of "Built on Express" solutions should not assume that the offerings will deliver the same experience as the IBM products upon which they are built. As is true when evaluating almost any product, it pays to look beyond the logo.