IBM Targets Small Businesses

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IBM is developing a new, "one-stop-shop" product offering, Lotus Foundations, aimed at companies with five to 500 employees, it said Monday.

Lotus Foundations will consist of on-premise software servers sold primarily through partners. IBM is also developing a set of accompanying Web-hosted services, now available in a beta version.

The company plans to bundle Lotus Domino, file management, directory services, firewall, backup and productivity tools in the initial offering of Lotus Foundations. Customers who need more power will be able to bring on additional servers, according to IBM. The company's partner community will also be able to integrate their own applications into the core platform.

The server software sold under Foundations will be autonomic or "self-healing," and therefore appropriate for small companies without paid IT staffers, IBM said.

Foundations will be the home of technology IBM acquired through its purchase last week of Net Integration Technologies. That deal is set to close later this year.

"Net Integration is a key part of our strategy here. That's why we bought them," said Mike Rhodin, general manager of Lotus, during a press conference Monday at IBM's Lotusphere show in Orlando, Florida.

IBM did not release pricing information on Monday, but Rhodin indicated the company plans to compete vigorously for market share.

"Our intent as we price the Foundations offering, to be blunt, is to be very aggressive," Rhodin said. "The total value we'll put around the solution is going to be pretty big for the customer and we're going to leave some room in there for the partner to make some money."

The Web-hosted services, on the other hand, will focus on helping businesses collaborate with each other, such as through contact and file sharing, or online chat and Web meetings. Interested users can register for the beta test at

The Bluehouse beta test represents a chance for IBM to fine-tune the economics of selling software as a service, according to Rhodin. "You don't find a lot of profitable software-as-a-service companies. The business model is in evolution," he said. "Our approach is going to be to work with partners and the marketplace to find out the best solution for them."

Also Monday, IBM and SAP said they are codeveloping a software product under the codename "Atlantic," which will integrate IBM's Lotus Notes collaboration and office productivity software with SAP's Business Suite.

The Atlantic project represents a further deepening of the long-standing relationship between IBM and SAP.

"We think the timing is just right," Rhodin said. "The timing for collaboration and business systems to come together is right now."

The first release of Atlantic is expected to ship in the fourth quarter of this year, and will feature support for SAP workflows, reporting and analytics. It will also include the ability to use roles from within the Lotus Notes client, and tools for expanding these core capabilities, IBM said in a statement.

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