IBM Moves On Small Business E-Commerce Solutions

In a move to expand its position as a provider of e-commerce solutions for small to mid-sized companies, IBM (NYSE: IBM) last week announced a new version of its Net.Commerce for AS/400, helping businesses to quickly gain a secure, efficient online presence.

Net.Commerce for AS/400 3 will include a Store Creation Wizard with three templates, along with catalog, payment and order fulfillment functions. Other features include Lotus Domino integration, and support for both business-to-business and business-to-consumer e-commerce environments.

In a complementary announcement, IBM also disclosed that First Data Corp. (NYSE: FDC) and iMALL, Inc. (Nasdaq: IMAL) will provide components of their joint e-commerce venture for Big Blue’s web authoring tool package, HomePage Creator. Features will include a fully integrated payments gateway, online credit card processing, iMall shopping portals, and a virtual cash register.

An Industry-Wide Shift

Some industry analysts have observed that Big Blue’s move into the smaller business arena is a sort of consummation of an over-all industry shift to focus on this expansive market.

IBM is repositioning its e-business strategy to sell directly to companies of 100 employees or less, but it’s not alone. Gateway and Compaq, who currently dominate the small business market, according to International Data Corp. figures, have released dedicated small products. And Micron has thrown its entire corporate strategy in that direction.

For IBM’s contribution to the burgeoning small e-business market, they’ve entered into marketing relationships with such companies as American Express in order to provide products at discount rates to smaller businesses. They have also announced the IBM Small Business Program, backed by a $100 million (US$) marketing campaign, that includes customizable hardware and software bundles, a new customized Web link, e-business tools along with service and support.

IBM opened 1999 announcing a new 300GL series of small business PCs, along with an attendant leasing program. Additionally, The IBM Small Business CustomConnections, a productivity tool, was released, allowing small business users to access links to information on computing resources, customer service, legal issues, market research, public relations and sales.

According to small business technology analyst Joseph Villarosa, such solutions as IBM’s Small Business Program will “help to place small businesses on a level playing field with larger enterprises.” This would seem to serve the interest of the e-commerce community in a general sense, upping the competition index.

A Quasi-Internet Company

“IBM is becoming a quasi-Internet company,” declared Merrill Lynch analyst Steve Milunovich last week to Wall Street investors. His comments complemented those of Louis Gerstner, IBM chairman and CEO, who said that 25% of IBM’s revenue for 1998 stemmed from e-business hardware, software and services. Big Blue’s stocks jumped 9% the next day.