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IBM Plays Against Microsoft's Applications Slide.

Microsoft Corp's slide into business applications is irresistible, and it is unnerving ISV partners who are turning to alternative platform providers including IBM Corp.

That's according to Scott Hebner, vice president of marketing and strategy for IBM's ISV and developer relations - speaking at IBM's Rational user conference in Dallas, Texas - who said partners are unwilling to compete against Microsoft.

Hebner told ComputerWire approximately 300 projects using IBM's DB2 Express in 2003 came from a Microsoft SQL Server heritage.

"It means they are moving from SQL Server or supporting both," Hebner said. Hebner claimed 900 ISVs joined IBM's PartnerWorld Industry Networks during the last four months.

"We have a pull because IBM is a resurging company, but Microsoft has also been pushing them [ISVs]," he said. Hebner drew a parallel between Microsoft's entry into business applications, through the Great Plains acquisition, with database giant Oracle Corp's transition into applications during the 1990s.

"A lot of ISVs decided to move from Oracle's database to DB2 because they didn't want to compete with a partner," said Hebner. He said platform vendors moving into applications ultimately consolidate and expand their presence, meaning they come into competition with partners. "It's a slippery slope - once you get into the applications business you can't get out," he said.

IBM makes great play of the Microsoft threat to help win ISV support. IBM provides DB2, WebSphere, Notes and Domino, which it positions as platform products for ISVs to build on, rather than compete directly against ISVs by entering the applications business. IBM claims between 60,000 and 90,000 partners.

Microsoft recently caused uncertainty for ISVs serving business applications, by revealing it had held talks to acquire ERP giant SAP AG. Microsoft's ERP focus is currently restricted to SMBs, and any purchase of SAP would represent a move into enterprise-class ERP.

To calm ISV nerves, Microsoft moved to reassure business applications partners with an online posting saying it remains committed to the SMB market, and therefore is a limited threat, through the existing Microsoft Business Solutions unit.

Former Microsoft executive Brad Silverberg, meanwhile, last week noted Microsoft's partners are turning to non-Windows platforms because they do not see how to build a business in the new areas markets Microsoft is entering.

Silverberg's comments came as Microsoft's company chief executive Steve Ballmer attempted to rally partners at the annual partner conference in Toronto, Canada, by evangelizing the opportunities for partners building products using Windows.

Hebner, though, said yesterday that ISVs are now being asked to choose between .NET and open standards, adding a commitment to .NET means companies risk facing potential future competition from Microsoft in the channel.

Value Added Resellers presented with a choice of backing either a Microsoft Customer Relationship Management product, against another ISV's CRM products, for example, are likely to pay attention to Microsoft, hurting partners' business.

"The argument about what platform ISVs adopt is less about technology, it's more about business and economics," Hebner said.
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Publication:Computergram International
Geographic Code:1USA
Date:Jul 21, 2004
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