Big Blue Takes Aim at Small Business

If you own a business with 100 or more employees, chances are that IBM is not the first company you think of when it comes time to spend your IT dollars. If Big Blue has its way, though, that may change. For the past year, IBM’s had a group of people building a portfolio of managed services to serve the needs of the mid-market — a segment IBM defines as companies with anywhere from 100 to 1,000 employees.

Big tech companies have tried to serve small business in the past, but generally from an approach that we call the Cinderella Syndrome — taking an enterprise-level “foot” and hacking off bits and pieces until it fits into a small-business “slipper” — an unsatisfactory experience for everyone involved, to say the least.

Mike Riegal, the director of IBM’s Express Services Group, says his group has taken a completely different tack. “Companies in the mid-market range have different needs than enterprise customers,” said Riegal. “They need different products, features and prices. We’ve created products based on those different needs. They’re designed to solve the problems specific to small businesses.”

Riegal also notes that smaller companies are frustrated with the complexity of managing hardware and software, so they’re turning to managed services. “They can let IBM manage their IT so that they can get back to managing their business,” he says.

Smaller businesses have three main concerns, says Riegal. The first, network security, cuts across any sized company. The second is managing desktops, which includes upgrading, security patches, software licenses and asset inventory. The third is managing e-mail, filtering content and protecting the network from spam viruses and malware.

IBM has built managed services products to address these main areas of concern. The current products include the following:

  • IBM Express Managed Security Services for E-Mail Security
  • IBM Express Online Backup for Distributed Servers
  • IBM Express E-Mail Recovery Solution
  • IBM Express RFID Services
  • IBM Express Managed Security Services for Web Security
  • IBM Express Desktop Management Services

Riegal says IBM has kept the pricing to an affordable level. For example, the e-mail recovery service costs two dollars per person, per month, and the desktop management service costs $10 per person, per month.

The Latest Offering
IBM recently announced the seventh product in its managed services portfolio — the IBM Express Managed Security Services for Firewall and VPN. The service consists of an on-site appliance that provides both network security (through the firewall) plus secure remote access (through the VPN) for connecting remote offices and/or workers.

Riegal claim that setting up the appliance on site takes a fraction of the time it takes to set up VPN. “You plug the appliance into the network, and it auto-configures in 15 minutes,” he says. “Typically, it can take a savvy IT guy anywhere from two to three hours to set up a secure VPN. IBM manages the device 24/7 and provides automatic updates through IBM’s DataCenter.”

Some of the features found in the managed firewall and VPN include the following:

  • Protection against unauthorized traffic
  • Stateful packet inspection
  • Automatic updates guard against the latest security threats
  • Quality-of-service (QoS) prioritization
  • Allocate a percentage of available bandwidth for e-mail, VoIP, Web servers or other applications
  • Simplifies establishing and maintaining a VPN service between two trusted devices
  • Secure Sockets Layer (SSL) tunnels to securely transport data between offices or between remote workers and the office network
  • Encrypts each data packet using 256-bit Advanced Encryption Standard (AES)

Pricing starts at $95 a month, per location for companies with 100 employees. IBM also charges a one-time setup fee of $300. IBM also offers a 30-day free trial.

IBM sells the managed services through local VARs (value-added resellers). You can call your local VAR, refer to IBM’s Small Business Center or call 877-426-7624 for help locating a reseller.

A Third-Party Analysis
Laurie McCabe, an industry analyst and vice president of AMI-Partners, says she’s impressed with IBM’s overall strategy, noting that the company’s taken the time to figure out how it’s going to approach small businesses.

“IBM has a good formula in place. It has created managed services with a fixed cost and scope. They’re repeatable, turnkey solutions that really address the areas of importance to small businesses,” she says.

Choosing the right services to offer is key, McCabe says. “When you present a small business owner with the idea of desktop management, he or she gets it and readily sees the value, whereas pitching the idea of a business process management service would take a lot more time and education.”

She says the price is right, too. “They’ve done the homework. The cost is reasonable and competitive,” she says. “They had to work out the kinks, and with this set of services they’ve put the pieces of the puzzle together the right way.”

The main hurdle the company faces, she said, is the perception most people have when it comes to IBM: It’s for big business only. “They need to work with VARs to get the word out that they aren’t scary or overpriced. They’re competitive, easy to buy and easy to implement, which are things all small businesses need.”

Lauren Simonds is the managing editor of

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