IBM Announces Small Business E-Commerce Push

IBM (NYSE: IBM), arguably the king of e-commerce, is best known for its large-scale enterprise e-commerce solutions. However, the company announced on Wednesday, new products and services that enable consumers, entrepreneurs and small businesses to leverage the power of the Internet for e-business. IBM touts these new offerings as being designed for price-conscious buyers that value ease of use.

The new IBM small business product lineup includes IBM Web authoring and graphic design software, an e-commerce enabling software tool, as well as ThinkPad notebook PCs and a service for safeguarding mission-critical data.

“Everybody recognizes that the promise of the Internet is transforming your operation into an e-business,” said Bill McCracken, general manager of strategy and marketing for IBM’s Personal Systems Group. “IBM is offering entrepreneurs and small businesses everything they need to quickly create a presence on the Internet and engage in e-commerce.”

The new IBM small business product lineup includes IBM Web authoring and graphic design software, an e-commerce enabling software tool, as well as ThinkPad notebook PCs and a service for safeguarding mission-critical data.

Big Blue’s Big Picture

Although the company is, by no means, shifting course away from its highly lucrative corporate target market, this announcement indicates a well-developed foray into the already huge, and rapidly expanding small business segment of the e-commerce market. The question is how much resources will IBM allocate to reaching the small business market, which is intensely competitive and largely price-driven.

To a great extent, IBM has been able to lead the e-commerce industry by leveraging existing corporate relationships with its AS-400 and 600 series purchasers. The company has also been widely successful in its high-stakes e-business campaign, which portrays Big Blue as a hip e-commerce company, shedding its “stiff” conformist image.

The small business market, however, is typically known to focus on factors other than those emphasized so far by IBM. If the company hopes to gain market share among small business purchasers, IBM will be forced to think more in terms of extremely cost-effective and user-friendly turnkey solutions, rather than adopting a piece-meal approach. Wednesday’s announcement reflects an understanding of the small business market’s needs, but key components of the e-commerce package, like site hosting, technical support, and business consulting have yet to be fleshed-out.

The New Package

IBM NetObjects TopPage Web authoring software enables online merchants to create Web sites without the need for HTML coding. A step-by-step multimedia tutorial that guides users through each aspect of Web design is included. The application is expected to retail for approximately $60 (US$).

IBM also offers a graphics application, called PerfectPhoto which is reported to allow novice computer users to manipulate digital camera shots or scanned photographs into their e-commerce sites. The software is expected to retail for approximately $40.

Startup 2 for e-business, a package designed to get small businesses up and running on the Internet quickly and inexpensively, includes the tools necessary to publish, take credit cards, as well as maintain and host a Web site with IBM HomePage Creator for e-business. Startup 2 for e-business has an estimated retail price of $30.

Other Small-Business Deals Brewing

Today’s announcement follows several joint marketing relationships recently launched by IBM to make it easier for small businesses to purchase IBM products. The new initiatives include an alliance with American Express to provide small business corporate card members automatic discounts of up to 10 percent on specific IBM products; an alliance with CompUSA to offer IBM packaged solutions through CompUSA Business Centers; and, a pilot program with OfficeMax, in which OfficeMax will offer an exclusive IBM product area, in what is described as a “store within a store” model.

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