Blue" Lives Up to its Name
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
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."
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
"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
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.