IBM’s Mid-Market Integration Express

Rapid growth of information technology among small and medium businesses (SMBs)with between 100 and 1,000 employees has not been lost on some major integration players, including Microsoft and IBM. With this week’s launch of IBM WebSphere Business Integration Server Express, Big Blue is attempting to bring middleware to the masses and provide SMBs with tools to integrate their often-varied mix of IT solutions.

The worldwide market opportunity for SMBs in 2003 totaled US$300 billion — and this sector is the fastest-growing segment of the IT market, according to SMB market research firm AMI-Partners.

However, Shawn Willett, principal analyst at Current Analysis, told CRM Buyer that the mid-market is largely underserved because traditional integration vendors are focused on high-end enterprise-level integration efforts that cost hundreds of thousands of dollars.

“Because most of the mid-market is served by small integrators, IBM feels its time to bring another credible integration platform besides Microsoft’s BizTalk to the mid-market,” Willett said.

Growing, Underserved Market

Despite tremendous growth potential, the life of mid-market IT is tough. Many mid-market IT staff operate as “silos,” with each person supporting different organizational needs, Scott Cosby, program director for WebSphere Business Integration at IBM, told CRM Buyer.

In other words, any given IT worker is either focused on keeping the company’s infrastructure up and running or trying to keep pace with a flow of company mandates to improve supply chain management and comply with increasingly strict government regulations. These personnel have little time to think about integration.

Skill levels, training, resource levels and in-house roles of IT staff all are key issues facing mid-size companies that want to integrate their IT environment.

Keep It Simple

In a similar vein, Erin Kinikin, Forrester Research vice president and research director, told CRM Buyer that mid-market companies often implement only the simplest type of integration — not because they can’t afford the technology, but because they can’t afford the complexity involved in altering business processes and maintaining an enterprise-class solution.

Big Blue seems to be responding to that dilemma, at least in part. Given their limited budgets and wide range of in-house IT skills and resources, mid-size companies need products that are easy to adopt, use and maintain, according to IBM’s Cosby. He noted that Big Blue’s mid-market integration tools are based on the same underlying engine as its enterprise tools, so its technology has been proven in hundreds of front-line encounters.

IBM is hoping its US$5,999 WebSphere Express and $19,000 Express Plus offerings address many of these mid-market issues. Cosby noted that IBM is providing accelerators, including templates and wizards, to help mid-size companies get their integrations up and running faster.

WebSphere Business Integration Server Express software runs on Microsoft Windows, Linux and the IBM iSeries and AS/400 platforms, Cosby said. It uses a range of customizable adapters and prepackaged process templates that can tie together a mid-size company’s varied IT environment by connecting customer relationship management (CRM), enterprise resource planning (ERP) software, Web-enabled services, e-commerce sites and employee portals.

Two Mid-Markets

IBM’s lower-price offering is aimed at mid-size company IT departments that want a regional or industry-specific integrator to help them get them up and running. The more expensive package is for “do it yourself” IT staff and provides a process modeling tool to help them focus on their business processes and even simulate results so that they can locate bottlenecks or observe where transaction processes start to have problems in the company’s current business model.

For example, a company could model its credit card transaction processes to see if it could reduce the number of people touching each customer credit approval. Then, turning to simulation, it could ramp up the number of transactions to find the upper limit of its business model — the point beyond which it fails. Knowing this limit would tell the company how effective its business model would be when facing customer growth.

Single-System Approach

Forrester’s Kinikin presented another alternative for mid-market companies. She said Forrester sees SMBs moving to a single integrated system because many are looking to upgrade their core application systems anyway. By moving to a single system, they can achieve better integration at a lower cost with a simpler administrative environment, she noted.

But even that move toward single systems may establish a back-door market opportunity for IBM. According to Cosby, Big Blue’s relatively low-cost Express integration package is being considered by Rockwell Automation as a customized integration tool included with its industrial automation power, control and information solutions. Others may follow that lead.

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