But Wait, There's More

Gartner Says Midrange Companies Are Gun Shy About IT Investments

The consultants at Gartner are hosting their annual Midsize Enterprise Summit in New Orleans next week, and they have released a sneak peek of some of the findings they plan to divulge at the event. According to Gartner's research, only about a third of the IT spending in midrange businesses is involved in directly improving business performance, while the remaining two thirds is spent on infrastructure (servers, storage, and networks) or basic utility applications (such as email, payroll, and accounting).

The effect of the concentration of IT budgets on basic infrastructure is that business managers, who never get a big budget to do innovative IT projects that might push new revenues, think of IT as a cost of doing business, a basic building block like people and buildings. "Many midsize business executives have become disenchanted with technology solutions that they do not perceive to deliver business value," says James Browning, research vice president at Gartner who will be presenting at the Midsize Enterprise Summit. "This has led to low credibility in many cases, which carries a high price for IT departments--pressure on budgets and lack of resource commitments in an IT environment of scarcity."

No kidding. Gartner's solution to the problem? The same thing we have heard for years: IT managers have to better communicate the value that they can bring to the business, and they have to learn to speak the language of business, not technology.

ProData Gets ServerProven for DBUnifier

IBM's ServerProven certification and marketing program for iSeries utilites and applications has been a boon for the iSeries, for independent software vendors, and for customers who can get big discounts on iSeries machines when they buy them with ServerProven products.

ProData Computer Services, the Omaha, Nebraska, provider of data base utilities for the iSeries, announced last week that its DBUnifier, a new tool that just started shipping a few months ago, has attained ServerProven status. DBUnifier is a menu-driven tool for creating interactive applications from DB2/400 database files, without any programming. (You can find out more about the tool in "ProData's New DBUnifier Creates Interactive Apps in a Jiffy".

IBM's ServerProven rating is important because it means a particular piece of software has been put through the paces by IBM and its ISV partner to ensure it works properly on the latest server and operating system releases in the eServer portfolio--even if that software, like DBUnifier, is available on earlier releases. (In fact, DBUnifier will work on any AS/400, iSeries, or i5 running OS/400 V4R2 and higher.) Equally importantly, IBM gives ISVs with ServerProven status co-marketing and advertising money, plus rebates to end users who buy these solutions. IBM's North American unit is offering rebates of between $250 and $64,000 for companies that buy ServerProven software on a new iSeries or eServer i5 machine; additionally, in Europe, pushing certain ServerProven applications, both the customer and the ISV each get the rebate in U.S. dollars.

IBM Tweaks Financing Deal for Server Buyers

IBM has tweaked a long-running Low Rate Financing server financing deal to try to drum up business and to reflect recent changes in interest rates. IBM had lowered rates in early January to stimulate demand, and now has pushed them a tiny bit above the levels rates were at before it dropped them in January and quite a bit higher than what IBM was charging last summer.

The Low Rate Financing deal offers what it calls low financing rates to companies buying from $25,000 to $1 million in hardware. (Sun Microsystems Finance is offering rates that are considerably lower, at 2.5 percent to 2.75 percent). Under the low-rate deal from IBM, companies buying pSeries products get the same rates as iSeries buyers, but get a sweetened deal that can span up to $2 million in a single purchase. With the rejiggering of the deal, customers in Canada have a $25,000 minimum, but customers in the United States can now finance anything that costs over $1,000. The rate for pSeries, iSeries, zSeries, and xSeries servers and their associated storage is now 4.1 percent (up from 3 percent in May 2004). Software and consulting contracts from the Business Consulting Services line at IBM's Global Services group can be financed at 4.4 percent, while Integrated Technology Services can be financed at 4.9 percent. PCs can be financed for 4.85 percent. These low rates are only offered for qualified customers (meaning those with decent credit and solid financials), and they are only available on capital leases with a 24-to-36-month term with a $1 end-of-lease payout. This deal runs through December 31.

looksoftware Joins Microsoft's Midrange Alliance

Another midrange tool provider has joined Microsoft's much-debated Midrange Alliance Program for helping OS/400 tool vendors cooperate with the Windows platform and with Windows tools, particularly those that employ Microsoft's .NET technologies. ASNA, California Software, Fujitsu, LANSA, HiT Software, Original Software, and ML Software are now joined by looksoftware, the Melbourne, Australia, provider of application modernization software for the iSeries.

"We expect most of our customers and partners will benefit from our participation in the MAP," explained Marcus Dee, looksoftware's director, in a statement announcing his company participation in the Microsoft program. "We are genuinely excited about Microsoft's commitment to providing increased interoperability between various platforms and technologies. Successful integration of .NET technologies with iSeries applications will deliver high reuse of iSeries applications and provide more options to our mutual customers."

Jacada Gets Multi-Million Dollar Contract for Fusion Middleware

Jacada, a middleware and integration software vendor with deep roots in the OS/400 market, has finally signed a big deal for its Fusion middleware. Fusion is an amalgam of the company's WinFuse and Integrator middleware, which are designed to front-end legacy Windows and OS/400 applications, respectively.

Fusion is the centerpiece of a set of applications Jacada has created specifically targeted at call centers, and, as it turns out, Jacada has just signed a multi-million dollar deal with a large (and unnamed) telecommunications provider. Jacada had a pretty tough first half in 2004 and saw better traction as 2004 came to a close, but nonetheless had a loss of $5.6 million on sales of $19.8 million. Jacada has, in fact, lost money in the past four years, and has been kept solvent because it went public during the dot-com boom and had a big pile of cash to sit one. There's no shame in that, by the way. This is exactly what has kept Sun Microsystems alive for the past four years, too. After piloting Fusion in one of its call centers, the telecom provider is now rolling the software out across all of its call centers.

Vision Solutions Inks Reseller Deal with ERP Provider IBS

High availability software maker Vision Solutions and midrange ERP software supplier International Business Systems of Sweden have inked a reseller deal that will see IBS resell Vision's ORION suite of high availability and data replication software to its 5,000 ERP customers. Under that deal, IBS will rebrand the ORION suite with the IBS High Availability Solutions moniker. Financial terms of the deal were not disclosed.

IBM Takes High Road, Starts Expensing Stock Options

IBM has broken ranks with many of the powerhouses in the high technology industry and has made the wise decision to start expensing its stock options. For a long time, the stock compensation that companies like IBM give to employees-- mostly top brass--have been hidden and, equally importantly, pumped up by stock buybacks. Many critics have argued that this kind of compensation should be on the books. No one would argue that coming up with valuations of stock options and grants is easy, which is probably why companies should stop giving options on stock and just give employees actual stock that has a definitive price at the moment it goes from the company's hands into those of its employees.

Kudos to Big Blue for taking a 55 cent hit to earnings for 2005 and for backcasting the stock compensation expenses so that later this month we can all see what IBM's costs for buying and giving away its stock really are.