“Big Blue” Lives Up to its Name

September 14th, 2005

“Big Blue” Lives Up to its Name

When it comes to web hosting, “Big Blue” lives up to its name. IBM is a major player in the web hosting industry and has been achieving some significant customer wins. Some industry experts see large enterprise customers continuing to shift to firms like IBM, due in part, to their fiscal strength in an environment where hosting start-ups remain questionable for deploying business-critical applications.

On November 16th, IBM inked a deal with Dow Chemical to provide a five-year arrangement for the company’s end-to-end web hosting services. The contract covered all three stages of the Web production cycle – development, testing and production environments.

IBM’s strength in winning corporate customers is partially a result of the company’s large network of partners. For example, IBM has extensive relationships with telecom companies; some of which even compete with IBM for the same hosting clients.

Warren Hart, Director of Global Offerings in eBusiness Hosting Services for IBM says working with the Telco’s and network providers, instead of against them, is a win-win situation for IBM, it’s partners and their clients.

“”By having multiple network bandwidth procedures, it helps ensure availability and elevates services level performance,”” Hart said. “”We’re a huge fans of our [Telco] partners, but the advantage of IBM working alongside them goes to our customers who have a business focused on their needs.””

IBM’s differentiation factor is that it brings to the table not only a solid infrastructure; facilitated in part by partners, but also extensive online business practices. IBM has developed applications for many large-scale events and companies. Few in the technology industry would question IBM’s grasp of the technological side of the hosting realm. Their deeply rooted technology-background is a unique attribute that provides IBM a competitive advantage over other hosts (including telcos).

Yet, IBM’s efforts in application hosting are shifting beyond the enterprise marketplace to the SME environment. As the upscale SME hosting market evolves, their remains a considerable battle ahead for marketshare. Some pundits have expressed concern that IBM may not be able to apply the same level of service offerings to the SME marketplace, due to the value-nature of smaller contracts. However, IBM is clearly positioning themselves to the contrary.

“”As a global organization we address more than the large enterprise,”” Hart stated. “”We have a great reputation and a strong track record in dealing with highly complex enterprise businesses, but there’s a substantial opportunity out there that reaches beyond the large enterprise.””

IBM does have the advantage that the company can take software and services tried, tested and true for enterprises and scale them to meet the needs of SME hosting requirements. Obviously the average SME isn’t going to need the same hosting solutions as the huge corporations and eBusiness sites , but they do want the reliability, speed and trust that’s relative to the name IBM.

“”We’re increasingly focusing on the SME level,”” Hart said. “”We can lower our costs for the entry-level business. We’re more flexible, we can offer more attributes of self-services applications.””

Paul Boulay, Program Director, Global Application Services for IBM Global Services notes that IBM is the one-stop-shop for SME, alleviating the hassle of having to go to different businesses to obtain the services they need.

“”Especially of interest in the small-medium business environment, where in the past the getting-started price tag was almost an automatic inhibitor, we’re able to go to that market segment now with a predefined offering allowing them to get up and running very quickly at very low starting costs,”” Boulay explains. “”Some of our entry-level offerings are priced well below $20,000 a month, which is extremely favorable for these types of applications.””

IBM has over 200 data center facilities around the world and is reinforcing global reach, both for the enterprise and SME hosting marketplaces. However, with more than 67 discrete web hosting offerings, and the added confusion of application hosting, time will remain the determinant as to whether IBM can achieve simultaneous success in serving both the enterprise and SME hosting platforms.”

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Entry Filed under: Web Hosting

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