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TechRepublic/Gartner: IBM aims at Microsoft by offering small-business VARs a Linux suite

Nov 22, 2000, 22:26 (1 Talkback[s])
(Other stories by George Weiss, Jim Browning)

"IBM faces a missionary sales effort to recruit value-added resellers (VARs) to Linux, despite offering Domino, WebSphere, and DB2 at drastically reduced pricing. ... On 6 November 2000, IBM announced the availability of IBM Small Business Suite for Linux. The suite targets businesses that have fewer than 100 employees with messaging, collaboration, productivity, Web design, and data management."

"With value-added resellers doing strong business with Microsoft middleware--at the expense of missed IBM software revenue--IBM's announcement is a move to capture an increased share of software revenue by opening untapped markets in smaller enterprises. IBM dropped its price from $3,600 (for DB2, Lotus Domino, and WebSphere) to $499 (for licensing up to 100 users) for equivalent functions."

"IBM anticipates a large new Linux VAR community developing as a Microsoft alternative and believes that price sensitivity will drive high volumes of business to Linux. With its Linux strategy, IBM hopes to capitalize on increased software revenue opportunities while letting VARs provide service and support."

"Gartner believes IBM will need until about the fourth quarter of 2001 to recruit, train, and support a minimum of several hundred VARs on Linux. IBM's success will depend on generating marketing programs to attract independent software vendors (ISVs) to port applications to Linux."

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