IBM Gets Tight With SAP, Targets SMBs

By Dan Muse | Posted October 12, 2006

In recent years, both IBM and SAP — icons of the large enterprise hardware and software markets, respectively — have had their eye on the small and mid-sized business market. While both companies have been aggressively selling to SMBs, today they teamed up to announce the IBM System i 520 Solution Edition for SAP.

The server is designed to make it easier for small businesses with fewer than 100 users to run SAP applications from a single server that combines built-in security, virus-resistance, database and storage, systems management with business software that includes mySAP All-in-One, business intelligence, customer relationship management, product lifecycle management and supply chain management.

Michael Koerner, global business development manager for SAP and IBM systems, said the $35,000 starting price for the server "represents about a 50 percent cut in normal pricing" for the i 520 server. It represents a price point created specifically for what IBM considers the lower end of the SMB market — 50 to 100 people.

To get that price, Koerner said, an SMB must be able to verify that it has $15,000 in SAP licenses. And new customers must sign on for at least $15,000 in SAP software.

More specifically, IBM is aiming to chip away at Dell in the small business server market. According to IBM, the System i 520 Solution Edition for SAP applications are comparable in price to configurations on Windows-based systems such as the Dell PowerEdge.

According to Koener, the i 520's benefit over a Dell server running Windows is the integration provided by integrated SAP business management applications with IBM's i5/OS. In February, Big Blue introduced the i5/OS V5R4 version of its iSeries operating system, which promised better security and disaster-recovery features.

"Some [SMBs] have previously selected Windows-based environments to support their SAP applications and then found themselves acting as the systems integrators for their business as they managed multiple servers and added the operating system and storage they needed to make the solution actually run," said Mark Shearer, general manager of IBM System i, in a statement. "Today's announcement removes price from the equation, giving SMBs a simpler SAP solution that requires minimal technical expertise."

While IBM and SAP are long-time partners — IBM reports that SAP software has been available on System i and other systems from Big Blue for more than 10 years — it's not a monogamous relationship. In fact, if today's news sounds familiar to you it's because in July, IBM made a similar move relating to SAP's biggest competitor when it announced IBM System i 520 Solution Edition for Oracle's JD Edwards .

The IBM System i 520 Solution Edition for SAP applications will be available from IBM and IBM Business Partners later this month.

Dan Muse is executive editor of internet.com's Small Business Channel, EarthWeb's Networking Channel and ServerWatch.

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