News Analysis: IBM Storms Into Cloud Computing With an ISV Friendly Pricing Model

The War for Mind Share In the Skies

The recent announcement of IBM’s Cloud Computing initiatives represents the latest front in the marketing and delivery battle for customers, partners, and ISV’s. IBM has pulled together a mix of existing technologies and new developments into a four pronged attack that focuses on:

• Cloud service delivery to end customers - leveraging existing Lotus Collaboration technologies (e.g. Sametime Unyte) and the newly announced Bluehouse, a web-delivered social networking and collaboration cloud service.
• Customer integration of cloud services - delivering system integrator led practices around salesforce.com and Succeess Factors through IBM’s Global Business Services (GBS).
• ISV enablement of cloud services - providing ISV’s with tools to design, build, deliver, and market cloud services.
• Customer enablement of cloud services - helping customers deploy their own clouds through a suite of enabling technologies known as “Blue Cloud”.

Pricing Model Favorable to Broader ISV Adoption

With vendors looking to attract the greatest number of ISV’s into their cloud, OEM pricing often becomes an issue for PaaS adoption by ISV’s. Typical barriers to entry stem from a disconnect on how middleware is paid for and how SaaS models generate revenue, prohibitive upfront costs, and the lack of scaled pricing. IBM’s SaaS pricing pilot launched in July makes a pont to address key barriers wth low up front cost, fixed predictable annual costs, and a one year cancellation option.

The bottom line.

SaaS platform wars continue to intensify. Oracle’s announcement last week at Oracle Open World and this week’s announcement by IBM stresses the importance of this emerging battleground. As the enterprise vendors join Amazon, AppNexus, GoGrid, and Google, expect the convergence of Web 2.0 and Enterprise 2.0 to hasten.

Your POV.

So now your turn. Do you think the enterprise vendors will transition to the new world or will today’s cloud vendors become tomorrow’s enterprise veterans. Post a comment or drop me a line at rwang0@gmail.com.

Copyright © 2008 R Wang. All rights reserved.