IBM, with a handful of hosted software providers, is developing a new model for delivering hosted software that could significantly impact the way the software-as-a-service industry is structured.
IBM and a group of ISVs, including Siebel Systems Inc., Intacct Corp., Concur Technologies Inc., Employease Inc., Peopleclick Inc. and Ultimate Software Group Inc., have formed what's informally referred to as the IBM SaaS (Software as a Service) Partner Council.
The purpose of the council is to develop and deploy a model that makes it easier for companies to choose preconfigured and preintegrated software on demand, sources close to IBM said.
The council's plan could be announced as early as next week at IBM's PartnerWorld conference in Las Vegas, but the more likely scenario is a phased rollout, starting with introduction and training materials next quarter, sources said.
As part of the effort, IBM, of Armonk, N.Y., is developing an architecture that provides a common framework for how applications interoperate, along with preconfigured building blocks for use by the partner network, according to council member and Intacct CEO Robert Jurkowski.
Click here to read more about IBM's on-demand computing strategy.
"As SaaS companies, we don't want to continue as islands, or point-to-point solutions. We want to figure out how we can offer a bigger picture," said Jurkowski in Los Gatos, Calif.
"For example, we have preintegrated our suite with Salesforce.com [Inc.], but also what we would like to do is adhere not only to Salesforce but to generalize that so a lot of people can interoperate and participate," Jurkowski said.
IBM plans to look first to the members of its Application Enablement Program partner community of about 60 SaaS ISVs as a source for components. The idea is not just to provide traditional ERP (enterprise resource planning) capabilities, such as accounting, but also to offer a cross section of capabilities based on a single event, such as e-mail archiving, or on a business process event, such as compliance.
This would, council members hope, spur adoption of SaaS.
"Things we hear from the midmarket on why SaaS is not applicable is [due to issues with] integration and customization," said IDC analyst Amy Konary in Framingham, Mass. "The challenge is integrating more than one hosted software application."
The way IBM currently works its Application Enablement Program is to provide ISVs with access to IBM expertise. In turn, those ISVs host their software on IBM's data center. Customers can access various hosted applications and integrate them on a point-to-point basis. The goal of the Partner Council is to evolve that model.
One idea the council is discussing is a prepackaged set of hosted applications available through a portal that provides a mechanism by which customers can obtain software components as a service, sources said. Analysts agree this is the correct approach.
To read about how hosted services are gaining ground with SMBs, click here.
"IBM is going to take multiple software-as-a-service offerings, integrate a vertical package, plus a couple of horizontal packages, and share that in the same data model, with the same user interface," said Tom Kucharvy, an analyst with Boston-based Summit Strategies Inc. who is working closely with the council. "That is not available today."
In migrating her Siebel enterprise software to a hosted model—Siebel's hosted software running on IBM's infrastructure—Sue Powers, CIO of travel services provider Worldspan L.P., is intrigued with the notion of being able to obtain services from a single vendor.
"We found in many cases the software itself was really more 'We'll host it for you' versus 'We've done the development work to make it a service-oriented offering,'" said Powers in Atlanta. "We want to see the software evolve [so that] it lets you hyperlink to enterprise services and a database."
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