New IBM Unit Focuses on ISPs

IBM put in motion firm plans to invest in the Internet Service Provider market last month with the formation of a new IBM ISP business unit and partner program. This tighter, more formal relationship between IBM and the ISP market is expected to help individual ISPs better deliver e-business software and services to their end users.

"ISPs will look first to see if they have the skills to deliver e-business services in house, but if they don't IBM hopes to be ready to help," says Jim Corgel, general manager of the new IBM ISP Industry unit. "This new IBM business unit will focus on partnering with ISPs, which need the technical skills to implement any advanced or complex applications."

IBM believes ISP business will come increasingly from the corporate -- rather than the consumer -- sector. "It will start to shift away from consumer access and simple Web hosting, and into a wider variety of capability," Corgel says. "IBM feels its e-business services will support ISPs as they make the shift from the consumer to the [corporate] market."

ISPs are growing to become Application Service Providers (ASPs), rather than simply Internet access providers, adds Dr. Scott Penberthy, director of solutions for the new ISP unit

The timing is right for IBM to enter this market, according to Corgel. "As the fundamentals of the ISP business begin to change, we think it moves closer to [IBM's areas of expertise]," he says.

The ISP Industry unit will not function as a separate, stand-alone business unit within IBM. The unit will serve as a single point of contact between IBM and its ISP partners. As an integrated IBM business unit, it will leverage IBM hardware, software and services.

IBM is looking to get on board the ISP ship as it rockets ahead into the next millenium. International Data Corp. (Framingham, Mass.) predicts ISP revenues in the United States alone will reach $37 billion by 2003.

IBM also announced the expansion of its business partner program to better include ISPs. "We're finding that as ISPs attempt to differentiate themselves from their competitors in what they deliver to their subscriber base, they will look to us as a technology partner to help them design, develop and deliver advanced applications or value added [e-business] services," says Jack Baney, director of global network solution provider sales with IBM Global Business Partners.

"This program also includes the best of what we offer to software remarketers," Baney continues. IBM also plans to implement a lead-passing program, where IBM uses its demand-generation capabilities to trade leads from small and medium business end users to ISPs.

While the majority of ISP Industry unit and partnership announcement affects the software and services business, IBM's server lines will see some residual benefits. "While the Netfinity server line is a very attractive entry offering that customers can build upon, clearly the AS/400 has the opportunity for us as well," Baney says. "As a matter of fact, we have a solution that we've been working on called AS/400 Connect, very similar to the Netfinity bundle."

The RS/6000 Brand is also expected to be a factor in the offerings of the new business unit. "It's across all platforms, and really depends upon the ISP and what they want to make available to their subscribers," Baney points out. "We think we have the unique ability to architect a solution that is hardware, software and services across multiple platforms."