March/April 2003

IBM is building a partner network to deliver best-of-breed software packages to the wholesale distribution sector

About a year ago IBM gave a US launch to a new concept called Industry Solutions Portfolio. It aimed to offer "mid-sized" companies a selection of best-of-breed solutions for specific industries - or "affordable application-based solutions", as the company called them.

Now IBM's Industry Solutions Portfolio (which has the slightly confusing acronyn ISP) has been brought over to Europe, and specifically to the UK. So what is it exactly, and how does it differ from what the company was doing before?

Jonathan Young, who is spearheading the project for IBM in the UK, explains: "We've always been able to deal with large customers on a vertical market basis, but this is the first time we've taken the same approach to the mid-market." He defines that market as companies employing between a hundred and a thousand staff.

Echoing the approach it takes with very large customers, IBM has drawn in a range of partner-companies specialising in different market sectors or aspects of the overall requirement. Young says it looked for "key software suppliers with a broad range of solutions, and adds: "Our approach underlines IBM's commitment to choice and openness. We don't want to make a 'boxed offer'."

The company is of course treading a careful line here. By its very nature, a formalised vertical-market solution is likely to be pre-packaged to some extent. The point about the ISP programme, it seems, is that it is not prescriptive. "We are willing to tailor our software bundles if necessary," Young says. Nor is the system by any means IBM-dominated. That fact is emphasised by the high-profile involvement of partners.

The result: IBM customers in the small and medium-sized business sector get the best of both worlds - market-specific solutions, but with enormous flexibility in terms of the suppliers who are delivering the key elements, and hence in the nature of the end result.

Three vertical markets have been identified for the programme initially - wholesale distribution, retail, and fabrication and assembly. A fourth, life sciences, is also being tackled in the US, and more are in the pipeline. The company is already talking about developing enterprise application solutions for automotive suppliers and the electronics and electrical industries in Germany.

The range of partners for the wholesale distribution category so far seems the most fully fleshed-out, and includes EXE Technologies, Finmatica Mercia, IBS, Intentia and Manhattan Associates. Strategix is expected to join them soon.

"We're trying to avoid working with partners who compete directly with each other," Jonathan Young says. "There might be a fair degree of overlap, but the partners will usually have different specialities or be expert in different industries."

Although IBM is taking a lead in promoting this concept, it doesn't aspire to taking ownership of the projects themselves. "Customers would deal direct with the software partners from day to day," Young says. So what's in it for IBM? "Our strength lies in our infrastructure," he feels. "We can supply hardware, middleware and database systems."

At the time of the US launch, IBM also promoted its ability to offer partners the resources to provide hosted Web-based solutions, which might or might not use its own WebSphere e-commerce suite.

IBM also has another string to its bow in the form of its financing capability. "IBM Global Finance is the largest IT financier in the world," Young says. He describes this capability as "adding a financing wrapper to the deal."

The overall effect of the whole programme is to throw new emphasis on vertical-market solutions that can be run on IBM equipment with IBM support, and to underline the company's competence and expertise in the markets concerned.

That angle is brought out on a dedicated area of the IBM Web site, which "is the core of the programme," according to Jonathan Young. There are separate sections for each of the vertical markets being covered, and each includes case studies, articles and lists of participating partners. It's all about fostering what the company calls "thought leadership" - a strategy echoed by Manhattan Associates, one of the supply-chain partners.

"We want Manhattan to be identified as a leading thinker in this space," says the company's marketing manager, John Bird. He says the company is keen to be associated with leading-edge developments such as the use of RFID in the supply chain.

Would-be customers can even express their interest over the Web, Jonathan Young says, "but in any case, we can use traditional contact methods as well if that's what the customer prefers."