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IBM Refines Middleware for SMB Market

Analysis of News Events
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Last week, IBM took significant steps toward making its middleware more attractive in the small and medium-size business (SMB) market. In two announcements, the company unveiled aggressively priced WebSphere and Workplace offerings running on its eServer iSeries and BladeCenter servers. The new offerings should gain the attention not only of mid-market customers, but also of vendors such as Microsoft that are marketing their own middleware solutions to the same firms.

In the first announcement, IBM presented iSeries customers with special prices for selected WebSphere Express products and Host Access Transformation Services (HATS), a tool that refaces 5250 screens with graphical interfaces. The packages provide discounts of between 25% and 75% on per-processor prices for WebSphere Business Integration Server Express, WebSphere Portal Express, and WebSphere Commerce Express. The discounts are available when running these products on uniprocessor configurations of the eServer i5 Model 520 that are in the P05 and P10 software tiers. These are configurations of choice among smaller companies with limited IT budgets that are often the last firms to modernize their iSeries applications. IBM hopes that the discounted offerings will give these companies the impetus they need to take the modernization plunge.

While IBM believes it is on the right track with the offerings, it still considers them to be trial balloons. As such, the vendor is releasing the new offerings under a pilot program that will run through 2005 and early 2006. The company will evaluate the program at the end of March 2006. If it is a success among smaller customers, IBM could expand it to more iSeries middleware products and/or larger servers. As part of an expanded program, the company may also implement a graduated software pricing system for selected middleware products. The following table shows per processor prices for the current pilot program.

Pilot Program Prices for iSeries WebSphere Express and HATS Products
Software Products
Per Processor Prices by Tier
P05 Tier (Model 520 Uniprocessor)
P10 Tier (Model 520 Uniprocessor)
P20 to P60 Tier*
WebSphere Portal Express for eServer i5 520
WebSphere Business Integration Server Express for eServer i5 520
WebSphere Business Integration Server Express Plus for eServer i5 520
WebSphere Commerce Express for eServer i5 520
Host Access Transformation Services (HATS) for eServer i5 520
Per User

* Existing prices for P20 to P60 models. Prices for WebSphere products are for multiplatform versions.

As the table indicates, IBM is taking the multiplatform versions of several WebSphere Express products and reducing their per-processor prices for uniprocessor Model 520 servers. If you are wondering why there are no P05 prices for WebSphere Portal Express and Commerce Express, it is because these products require a Model 520 in the P10 tier with at least 1,000 CPW of performance. The P05 configurations lack this kind of horsepower. Note as well that these products run only on i5/OS V5R3; they are not supported on AIX or Linux partitions. However, customers can upgrade the discounted WebSphere Express licenses to the multiplatform versions should they choose to run the software on a P20 or larger configuration.

IBM is also taking HATS for the iSeries--a product that normally carries a per-user price--and providing a per-processor price for Model 520 uniprocessor configurations. Prices are set so that if a customer supports more than 25 concurrent users on a P05 server or more than 50 concurrent users on a P10 server, the per-processor prices are the most cost-effective option. Since most customers support more concurrent users than this, the per-processor price offering should prove attractive to entry-level iSeries owners.

BladeCenter Bids for SMB

On the same day that it announced the iSeries pilot program, IBM also launched an impressive program to deliver SMB solutions on its eServer BladeCenter servers. The program, which the company has dubbed BladeCenter Business Express, combines hardware, software, and services in highly integrated packages. Each package includes a BladeCenter chassis, one or more Intel processor-based HS20 Express Blade Servers, WebSphere and/or Workplace Express middleware, and complementary solutions from IBM Business Partners. IBM will also provide consulting and deployment services to augment those of its Partners as well as financing for customers that want to amortize costs over several years.

For the initial launch of BladeCenter Business Express, IBM developed four base packages upon which its partners can build their own software and services. Each package runs on Microsoft Windows Server as well as Linux distributions.

  • Collaborative Portal Express provides a platform for deploying solutions on WebSphere Portal Express.
  • Collaborative Workplace Express leverages IBM Workplace Services Express to deliver messaging, workflow, and document management capabilities.
  • Process Integration Express enables companies to integrate disparate applications and business processes using WebSphere Business Integration Server Express.
  • Rapid Foundation for e-business Express combines WebSphere Application Server Express and DB2 Universal Database Express to create a foundation for extending applications to the Web.

On each of the four packages, IBM preloads and pretests its own middleware before shipping the packages to Business Partners. The Partners can then use IBM development programs such as Solution Builder Express to add their own value to the packages. Since IBM is offering steep discounts on the packages, Partners can deliver their solutions at prices that are more competitive. Moreover, since IBM pretests and preloads its components, BladeCenter Business Express should significantly reduce implementation risks for both customers and solution providers.

IBM is selling BladeCenter Business Express through Avnet and its network of resellers in North America. Big Blue anticipates that it will sell the solutions through other distributors and expand sales to both Europe and the Asia Pacific region during the second half of 2005.

Two Announcements, One Objective

While IBM's latest offerings put the spotlight on different servers and middleware packages, they bear much in common. Both offerings demonstrate that IBM is intent on making its middleware a viable option for SMB firms. Both offerings lower the price barriers for those firms. In addition, both offerings will be delivered through Partners that can clothe them with the services that smaller firms need to deploy middleware-based solutions.

Taken together, the two announcements improve IBM's prospects in the SMB middleware market. They also give the company viable alternatives to SMB solutions from Hewlett-Packard, Microsoft, and other vendors that have historically been leaders in this market segment. Over the last two years, IBM has gone a long way toward developing a solution provider network around its middleware platform. With its newest offerings, the company can now harness that network to go after those competitors on their own turf.

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at This email address is being protected from spambots. You need JavaScript enabled to view it..

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology.


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