We’ve talked repeatedly about the growing importance of the SMB market (especially in emerging markets) for IT market growth. And we’ve asserted that it will take a new, “hyperdisrupted” solution development and delivery model – one that leverages online delivery (e.g., SaaS), web services and mashup application models, appliance-like systems, and very large, global solution communities – to really capture that SMB potential. We’ve also noted that IBM has been conspicuous in its absence, as other suppliers have experimented with these new models and brought them to market.
Now, as we’ve predicted, IBM is making its move. Last month, at its annual gathering of business partners, IBM finally revealed the core pieces of a new, Internet-infused service delivery model it’s been developing for the SMB market, labeled the “Blue Business Platform”. Here are a couple of clips of IBM’s Sam Palmisano (with Google CEO Eric Schmidt) talking about the new Platform at the event:
The “Platform” actually consists of three interconnected elements:
- An online application (and services) marketplace called “Blue Central”. IBM is building this marketplace to also be a solution and services delivery platform, supporting downloading of pre-integrated applications as well access to hosted/SaaS solutions.
- A new generation of on-premise systems, referred to by IBM as “Blue Cubes”, that are simple and appliance-like, that connect to the marketplace and its online services for easy adoption and operation.
- A services-based application integration toolkit that allows ISVs to integrate their applications with all of the Blue Business Platform elements, leveraging the marketing, delivery, support and integration services, including the ability to be downloaded to, and run on, Blue Cube systems.
Here’s a simple chart IBM has used to communicate this to business partners (click on chart to enlarge):
A few thoughts about this IBM effort:
- An iTunes for Business Solutions? Conceptually, this model of simple on-premise devices connecting through the Internet to a marketplace of downloadable and SaaS solutions sounds very similar to Apple’s iPod/iTunes Store “system”. (We foreshadowed IBM’s shift to this strategy of more closely linking systems to solutions value in our review of IBM’s STG analyst event last Fall – it’s worth another read.) Undoubtedly, IBM’s hope is that bringing simplification to the SMB world in this way will result in the same kind of growth and market share benefits that Apple has enjoyed with its simple and disruptive iPod/iTunes model.
- Remarkably “Under-Covered” in the Press. I looked at the Wall Street Journal, New York Times and Business Week the day after the announcement and found virtually no coverage of this announcement. Pretty remarkable, considering that, with the Blue Business Platform, IBM is rolling out a fundamentally new model for doing business, the success of which will determine much of IBM’s fortunes during the next two decades. I think the lack of attention is, in part, because much of the market is still catching up the fact that the solutions/services model is on the cusp of radical change, and – surprisingly – many do not yet fully understand the disruptive implications for the marketplace and its key players.
- Aimed – First – At Partners, Not Customers. Another reason the announcement was under-covered is that the new IBM model is in the early “under construction” phase: IBM must still convince its ISV and channel partners to move to this new model to make it a reality. IBM already has been working with several dozen partners to test out the new approach, but it will take many months to 1) recruit the solutions ISVs, 2) do the integration work with those partner solutions, and 3) train channel partners to leverage the new model, in order to make this marketplace a real destination for many customers. Moving partners will take some time, but partners’ interest to transform will be high; as we’ve written, partners that want to survive and grow in the next decade and beyond, must transform themselves and their offerings to support the new model (whether IBM’s, Google’s salesforce’s, SAP’s, or Microsoft’s implementations). These partners who cling to the old model will become obsolete.
My bet is that this model for business solutions delivery, like the iPod/iTunes model for media, will indeed stimulate a lot of new growth by significantly lowering adoption barriers. On the other hand, I’d be very surprised if IBM doesn’t face stiffer competition in its market than Apple has in its market, as rivals such as Microsoft, Google, salesforce.com, SAP, Oracle and others, introduce and/or expand their own simplified, online/offline solution delivery platforms. Indeed, in the video above, Google’s Schmidt, while praising IBM for collaborating with Google on some Cloud Computing efforts, also noted that Google’s own efforts to sell cloud-based solutions (albeit fairly simple ones thus far) have been promising; and we would not be surprised at all to see Google emerge as a major provider of this “Cloud+Marketplace+Appliance” model to enterprises large and small in this next wave of enterprise IT.