ASP strategy begins to flower at Lotus

IBM's Lotus subsidiary claims that its resellers will not lose business opportunities as a result of its decision to invest heavily in application service providers (ASPs) over the coming months.

The messaging and collaboration giant talked up its new plans during the European leg of its annual Lotusphere partner and user conference last week, while claiming that about 65 million people now use its Lotus Notes and Domino software worldwide. This is about 15 million more users than it claimed to have this time last year.

But throughout the keynote speeches, Lotus representatives increasingly referred to ASPs as "the way forward". The supplier sees this sales model as a means of increasing its market share in the small to medium sized enterprise (SME) space, which it hopes will drive future growth. As a result, it will release a customised software bundle aimed at ASPs and their customers over the next few months.

Cathy Daum, vice president of the IBM/Lotus Software Partner Organisation, attested, however, that resellers should not feel threatened by the company's focus on ASPs because the SME market was under-penetrated. "ASPs are expanding the market to form a key route to SMEs. They are not taking business away from traditional resellers and distributors. A lot of resellers are changing or expanding their own client base by moving towards the ASP bracket. According to research by Giga, by the year 2004, 75 per cent of all SME business process applications will be provided by ASPs. That is huge," she said.

"Resellers have nothing to worry about, though. At the end of the day, it comes down to customer choice. Those who want to use ASPs will, and others will stick with resellers," she added.

To try and recruit a further 100 partners over the next quarter, including 40 from the Europe, Middle East & Africa (EMEA) region, the supplier has introduced a new Partnering for Growth strategy. The project will be aimed more at independent software vendors, systems integrators and ASPs than resellers, however, according to Daum.

"We are looking to get 25 contracts signed by the end of this year," she claimed. "Hopefully, we will get the full 40 as we move into 2001." Lotus' investment will be centred around co-marketing, sales and technical support for new partners, she added.

And again she insisted that the channel will not lose out because the firm is implementing a Market Growth Rebate scheme for both resellers and distributors. Under this programme, Lotus will refund up to 14 per cent of any extra revenue generated from sales to SMEs. The rebate will not cover AS/400 boxes or Tivoli systems management software, however.

"Each case will vary in terms of the amount of money given back to the reseller or distributor. It could be the full 14 per cent or less," Daum explained.

But Lotus is taking further steps to shake up the channel by making it compulsory for partners to join a new scheme by early next year, which it claims will be "beneficial to all".

Partnership schemes
The PartnerWorld for Software initiative, which is very similar to Microsoft's new Certified Partner Scheme, will be formally launched next month and resellers will have a grace period of three to four months in which to register.

IBM is investing a total of $11m (£7.5m) in the programme in EMEA alone and membership will be free, although there will be three accreditation levels - Premier, Advanced and Member. Partners only need to work on behalf of one of the IBM companies - IBM, Lotus or Tivoli - to qualify and they will be offered unlimited access to the company's portal and its partner line service, a support line number that is charged at local rates.

But any IBM resellers wanting to sell Tivoli and/or Lotus products will need to pass a further accreditation process, with the same applying to current Tivoli and Lotus resellers. "This scheme will make it easier for customers to identify the most skilled partners and help them find the right company at a glance," Daum said.

For an additional $1295, partners can also buy the Value Pack, which provides them with four main benefits.

First is the You Pass We Pay scheme, under which IBM reimburses partners for training costs if every member of staff manages to pass a chosen course.

Second is the You Call We Pay scheme, which provides partners with subsidised telephone support. "Whereas before there was a capped limit to the number of support calls a partner could have, we will no longer cap the number of incidents," Daum explained.

Third is online access to demonstration software, which was previously mailed to partners. Now, she said, they will be able to download evaluation packages from the web in their own language.

Finally, IBM will help partners to co-market their products at no extra cost. "It may all seem very costly, but the company is committed to this scheme. It will be beneficial not only for partners, but for customers as well," Daum claimed. * Lotus also launched its new K-station knowledge portal at the conference. This is the first product to come out of the Raven project, which was talked up at last year's Lotusphere by the then chief executive Jeff Papows. It will be marketed under the Working As One moniker, which will also be used for Lotus' other planned portals.

The K-station, which will ship in the UK in November, combines a raft of Lotus' portal technologies, services and applications. These include Sametime for instant messaging and conferencing, Mindspan to enable e-learning, and QuickPlace, a web-based teamware package. The company claims the offering is "designed to bring new levels of collaboration and functionality to end users".