''We are pairing SMB-oriented ISVs with similar VARs to create an indirect channel for the ISV applications''

Buell Duncan is responsible for the company's alliances and programs with
independent software vendors (ISVs) and solution developers. On his recent visit
to India, Buell elaborated on the significant role that Indian ISVs have to play
in the company's overall business strategy. He also spoke about the ways to
establish synergy between the company's SI partners and ISVs.

What role do ISVs play in IBM's overall business strategy?

IBM exited the applications market in 1995 and moved instead to partner with
leading ISVs throughout the world. It aligned its technical support and
go-to-market execution to fuel ISV partners' growth. This alone demonstrates
the importance of ISVs to IBM as we did not intend to compete with them but to
partner with them to deliver solutions to clients. In fact IBM's 'On Demand'
business strategy fuels the need for increased ISV enablement, which we are
highly committed to. Programs like the ISV Advantage program tailor the needs of
this community.

As the marketplace is increasingly looking for solutions, a key component of
that solution is always going to be an application, which these ISVs are
best-equipped to develop. The very fact that nearly 60,000 of our 1,00,000
business partners globally are ISVs, illustrate their importance to our overall
business strategy.

Can you share IBM's ISV and developer relationship (DR) strategy for
2005?

For 2005, we have outlined three priorities. First, we would like to
continue with our focus on driving business with our Strategic Alliance Business
Partners and ISV Advantage members in the mid-market. Second, we will expand IBM's
PartnerWorld Industry Networks (PWIN) across geographies and industries;
including partner enablement to help create more leads and close more business
deals. And third, drive IBM momentum with the developer community through
ongoing worldwide skill-building and adoption of our software development
platform.

What according to you are the three key challenges faced by ISVs?

From my interactions with various ISVs, the three main questions that they
frequently ask are:

a. How do I address the shift in customer demand towards open source
software/ environment?

b. How can I leverage this opportunity and what role can a vendor like
IBM play in helping me out?

c. How can I establish a synergy between the vendor's strategy and
that of my own organization?

What is the kind of synergy that IBM establishes between its SI and ISV
partners?

IBM launched a pilot program in 2004 pairing SMB-oriented ISVs with
similarly positioned VARs (typically, existing IBM partners) to help create an
indirect channel for the ISV applications. 20 software companies in IBM's ISV
Advantage program are participating in the initial IBM 'teaming workshops',
which are essentially close networking and educational sessions between ISVs,
resellers and/or services partners and IBM staffers. The goal is twofold: to
introduce the channel distribution model to ISVs, many of whom have only sold
direct, and to help resellers add new types of software solutions to their
repertoire.

A large percentage of SMB customers want to buy solutions, both business and
infrastructure. And these companies cannot integrate the solutions themselves,
so they need to outsource. By pairing the ISV and regional integrators, we try
to make it an easy process.

This synergy is sustained by running various demandgeneration campaigns. Most
importantly, what we also do in terms of the feedback we get, is provide the
ability to connect some very small ISV firms to the IBM sales force within our
business partner organizations. So, when they have a lead or an opportunity, and
want to find out who to work with to close this and get help from IBM, we can
connect them directly with one of our sales people or one of our business
partners to close the transaction.

Can you share some insights on the ISV and developer traction in India?

We are seeing an increasing interest in Linux-based solutions from Indian
ISVs. Also there is a greater influx of partners who utilize our Innovation
Center as well  as Linux Center of Competency for porting their
applications. Based on our ISV interactions here, government and banking appear
to be the most significant verticals, which are our driving business for them.
As a solution, ERP is finding center-stage across all the verticals.

After the PartnerWorld Industry Network for ISVs was launched last year,
already 60 of them have signed for it, while 10 have signed for the ISV
Advantage initiative. Outside the US, India is the second largest, and is
growing at a rate of 32% on a year-to-year basis. By 2007, we expect India to
nearly 2 million developers.

In 2004 alone, nearly 4,00,000 developer registrations happened for IBM
DeveloperWorks in India, and are quite confident of tapping a vast chunk of the
developer base in the near future.

GOLDIE