IBM's Secret SaaS

IBM's been very busy the past few weeks telling everyone about a lot of new products and services. It's what they aren't talking about (yet) that's really interesting.
Posted November 10, 2007
By

Larry Barrett


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IBM has been running us media types ragged of late with release after release announcing big plans for unified communications, mashup application platforms and its third-quarter earnings report.

That's all well and good, but none of this "news" address a much bigger issue. IBM, like so many of its competitors already have, needs to adapt to the SaaS model that's changing the way customers buy, access and share communications software.

When I ask analysts, system integrators, developers, customers and consultants why IBM hasn't provided even the slightest hint of a substantive software-as-a-service (SaaS) strategy, they all say the same thing: "IBM isn't stupid."

An ocean of SaaS

Yet, in the past couple of months, SAP, the on-premise, take-it-or-leave-it bully, rolled out its first SaaS (define) offering, Business ByDesign. And Salesforce.com, the little engine that might, announced it has eclipsed the 900,000-subscriber threshold and unveiled Force.com, an on-demand application development platform that it believes will forever change the way companies develop, design and access business applications.

Meanwhile, Microsoft is getting ready to launch Dynamics CRM Live in the first quarter of 2008, a SaaS offering that will be managed within the company's data centers and use the same code base as its on-premise application. In October, it launched Office Communications Server (OCS) 2007, its unified communications platform for VoIP, instant messaging, conferencing and presence.

And at Oracle, frankly, there's not a lot of news to report from Siebel OnDemand. We know that CEO Larry Ellison, by virtue of the Siebel acquisition and his investment in NetSuite, understands the appeal of the SaaS model but it's also clear he's more than happy with the traditional on-premise, license-based model that butters Oracle's bread.

Who knows? Maybe Oracle will soon have something new to say on the SaaS front, possibly during next week's OpenWorld conference in San Francisco.

And don't forget about Google, which is talking more and more about the growing popularity of its Google Apps and Google Docs offerings, as well as its intention to bring even more tools and Web 2.0 features to the cloud-computing space.

Where art though, IBM?

Conspicuous by its absence from the big-picture SaaS discussion is IBM. And while the company does provide some hosted offerings for the enterprise, it's yet to deliver anything resembling a full-scale, multi-tenant, on-demand platform for the small- and mid-sized business (SMB) market.

But it's surely not from a lack of effort.

One of the worst-kept secrets in Silicon Valley -- and an especially sensitive topic within the executive ranks at IBM -- is the shocking turn of events that transpired in March when Cisco Systems, in the span of eight days, swooped in at the 11th hour to steal WebEx out from under IBM.

Though IBM won't comment on the WebEx drama, multiple sources confirmed that it was all but a done deal, which even included a press release announcing the union.

IBM had spent more than eight months kicking the tires and having informal discussions about how WebEx's industry-leading (87 percent) Web conferencing technology and, more important, its pending WebEx Connect SaaS platform for unified communications and collaboration would fit into Big Blue's ecosystem.

But Cisco CEO John Chambers moved in with a level of alacrity and chutzpah that IBM was either unable or unwilling to match. And that was that. IBM headed back to the drawing board.

Next page: The rest get going


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Tags: Microsoft, IBM, SaaS, Larry Ellison, VoIP


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