going after the PC LAN: IBM Loosens Channel Restrictions for Small Biz

Application availability and cost is one force holding back the AS/400 in the small business market. Another is IBM’s channels model. PC software vendors who port to the AS/400 often find that their reseller network can’t sell to AS/400 customers since they must also sell AS/400s with the solution, but can’t readily be certified for that.

No more. IBM has launched a new program that will allow software resellers to work together with established hardware resellers to bring low-cost AS/400-based solutions to businesses with fewer than 1,000 employees. The non AS/400-certified software reseller provides the software, the IBM Business Partner provides the AS/400 hardware and the two work together on the installation and implementation. Previously, one reseller had to provide both hardware and software.

IBM representatives could not be reached for comment on the new channels program, but Roger Arndt, AS/400 sales manager for IBM North America, said in a statement, “By design, this program leverages the strength of what each partner does best. Software and hardware resellers can concentrate on their core business while delivering more powerful, reliable and scaleable solutions to their customers.”

AccountMate Software Corp. (Novato, Calif.) is the first major software partner to join the new program, allowing its 2,000 associated software resellers to team up with AS/400 resellers to gain access to the AS/400 small business market.

“Historically, whenever we would come out with AS/400 software, our resellers couldn’t do anything with it,” says Bob Steps, VP of corporate development at AccountMate. “They couldn’t team with an AS/400 Partner to sell the solution. The [AS/400] Partner had to own the marketing rights to the software.

“But we had to have teaming to get the high volume we want.”

Such “teaming” is in place now with the new program. When a potential AS/400 sales opportunity arises, resellers can contact any AS/400 distributor for a list of hardware dealers in their territory and team with a dealer to deliver a complete solution to the customer. The program is limited to the AS/400e Model 170 for now.

Steps says AccountMate will now be able to “hammer” companies running legacy non-Year 2000 compliant minicomputer systems [HP-3000, VAX, PDP-11, Wang, etc.] with AS/400-based AccountMate solutions.

“Our resellers can walk into shops that are probably not Year 2000 compliant and offer them a PC LAN solution or an AS/400 solution. They’re already running their business on minis, so we think they’ll want to come over to the AS/400 world,” Steps says.

“We’re now priced for the entry market and IBM has twisted the rules to help us go to market. With Y2K and the panic settling in with that, these are fat times for us.”