If you’d like to listen to the recorded podcast series, select below.

Brent Leary: We’re really excited to talk to Ron Kline, director of marketing for IBM’s midmarket division. Ron, before we jump into the Smarter Commerce Imitative, IBM has been doing so much around this whole idea of a Smarter Planet, can you talk a little bit about the big picture of the Smarter Planet initiative.

Ron Kline: Sure. What we mean by Smarter Planet is that the world we live in is becoming smarter. Everything around us is becoming more and more instrumented, and that allows us to measure really almost anything.

Think about it: there are over a billion transistors for every person on the planet. Over 30 billion RFID tags are embedded across the supply chain around the world. Everything is becoming instrumented.  Supply chains, health care networks, even natural systems like our rivers.  As a result of being able to measure and instrument from various touch points, the world becomes much more inter-connected and intelligent. By measuring and connect this information, you can build a more intelligent planet – one that can respond much more quickly to change.

Take an example like in San Francisco where they’ve launched a parking system so you can see what parking spaces are available throughout the city and determine where there is an open place to park. I actually have this app on my iPhone now. With the next step, you’ll be able to pay for your parking using your smartphone as the payment device.

Sanjeev Aggarwal: Thanks Ron. So what is Smarter Commerce, and how does it fit into the bigger Smarter Planter picture?

Ron Kline: Smarter Commerce is about how we deliver the customer experience using all of the insights that we are gaining about our clients and supply chain to provide a much better customer experience.

For example, you used to just go out and buy a car, or a company would just order parts from a supplier. But as consumers got more information at their fingertips, they could start to get price comparisons online and hear what other people had to say about a particular product before they go shop. Things have quickly moved on to include people sharing information and opinions on social networking sites and blogs.

Smarter Commerce helps you maximize the insight that you generate through customer interactions, whether in the store, over the web, from smart devices – what is being said out in social communities and taking that insight and pulling it together to improve the customer experience. Then you can tailor your offerings to what a customer is interested in.  You can improve profitability by targeting the right offerings to the right customer at the right time, or by reducing the cost of returns, restocking, and supply chain expense by having to handle reverse logistics because you just didn’t know what the customer was looking for. The bottom line is improving the overall customer experience and living up to customer expectations.

We sort that into four big buckets, but it all comes down to customer experience. It’s the marketing, how do I target and personalize my marketing?  Yes, to get better yield out of my marketing dollar but really to have a better experience for my customers – so that I am providing relevant, targeted, offerings or information. Then, how do I manage that whole sales process, fulfillment across stores, the web, social sites. And customer service has to span all of the touch points. It’s not enough to have a customer service department anymore, customer service is something that a client experiences when he is buying a product or shopping for a product and when he is looking for additional service. On the internal side,  how do I control the procurement of goods and source the goods. I can have a smarter procurement process and a smarter supply chain process only if I know really more about my customer.

Brent Leary: Talk a little bit about who should care about Smarter Commerce in an organization and why they should care about it.

Ron Kline: Well, the customers care about it, so therefore, all of us as businesses need to care about it.  It’s something that any business of any size really needs to focus on.  It’s just as important for small and midsize businesses to deliver a superior customer experience as it is for a large enterprise.  In fact, Smarter Commerce and Smarter Planet can help level the playing field for midsize companies. In this environment, its all about building a more loyal customer, understanding that customer better, and then being able to deliver a better experience.

Sanjeev Aggarwal: Can you give us an example of how a midsize company is using Smarter Commerce today and what type of results they are achieving?

Ron Kline: Sure. One example I find pretty interesting is Elie Tahari, a high fashion clothing designer and retailer. Nobody is more focused on appealing to the tastes and the emotions of their customers, but those tastes can change very quickly and a manufacturer who is caught with too much of yesterday’s style has got a lot of money tied up in inventory that is out of date.

Elie Tahari implemented an IBM Cognos solution that allows them to have a unified view of all of the information available from their different systems to make better decisions about what the market is saying and what specific customer needs are.

So now, instead of following what was a typical practice in the retailing industry–sending stores the same distribution of sizes based on historical information across the country–Elie Tahari has insight from their customer data for each particular store over a period of time. They can say, the distribution looks a little different over here, and distribute accordingly. It’s a better customer experience because the chances of being out of stock had been reduced. It saves money on costs of returns or discounting to try to move product that is not selling, either because you don’t have the right style in stock or you have to return it back to the parent company because you ordered too many of one size. This has enabled them to improve the customer experience, and on the supply chain side, they don’t end up with too much of the wrong type of thing.

Another example is BJU Press, a publisher in the United States that provides home schooling materials for kids in the K-12 age group.  They have developed a web store front end with an IBM partner, CrossView, using WebSphere Commerce, and Coremetrics, a web analytics application. Now they can provide customers with an easier online experience to search for products, continually improve that search experience.

In both cases, IBM and its patterns were able to not only improve the customer experience, but also the economics for the company as well.

Brent Leary: Ron, those are some great examples, but how is IBM making Smarter Commerce accessible to the SMB market?

Ron Kline: In fact, the examples that I gave you are midsize companies. They have the same pain points as larger companies; they just haven’t had the ability to address it in the past because a lot of the technology and solutions were out of reach.

IBM has bridged that gap a couple ways.  One way is to provide offerings that are built and designed for the midmarket.  We have a process in IBM to insure that the offerings that we bring to market for this customer segment are built and priced appropriately for midsize companies.  An example, Unica Email Optimization [OnDemand] Solution is $1,500 a month for running up to twenty five events.  It’s very a very affordable solution with a lot of really great technology in it.  Unica Marketing Operations [OnDemand] is another one, marketing operations on demand is $6,000 per year for up to ten seats.  These are very much within the range of a midsize company, and provide the kind of analytics and insights that help a company deliver this Smarter Commerce experience.

We’ve also learned that customers are looking for local trusted advisors and that’s where IBM’s investment in a very large partner ecosystem has helped bring the IBM technology to these midsize companies through local business partners.

Sanjeev Aggarwal: How does an SMB that wants to learn more about this get started?

Ron Kline: Absolutely, first of all, you can talk to your local business partner because they are the trusted advisor for you there locally.  At www.IBM.com/smartercommerce you can learn about what Smarted Commerce is and get a bigger picture view of what other customers are doing in this area and how they are benefiting, and of course, what our offerings are.

Brent Leary: Ron thanks so much for your time today and explaining what Smarter Commerce is all about, thanks again.

Ron Kline: My pleasure, thank you very much.

In conjunction with IBM’s Smarter Commerce initiative, the SMB Group and CRM Essentials are working on a series of posts discussing how technology is empowering today’s customer, and why companies have to change their approach in order to build strong relationships with them. This is the second post in the series.

Many businesses feel like they’re in an uphill race to keep up in our increasingly connected world. With social media sites and conversations multiplying like rabbits, and 24/7 access to learn about, shop for and buy stuff on mobile devices, the world of commerce is radically and irreversibly changing.

Businesses that want to keep growing must keep learning and embrace change. As much as we like the show, the Mad Men tactics to push out messages and information to customers to entice them to buy will no longer suffice. Think about it:

• In February 2005, just 5% of all U.S. adults said they used social media sites.
• In 2011, according to a Pew Internet & American Life Project, 65% of adults use a social networking site like Facebook or LinkedIn, and 35% use smartphones.

Today, social media and mobile are the changes that businesses need to embrace. Businesses must find better ways to listen and engage with customers—when, where and how they want—to more accurately gauge needs, provide better service and strengthen customer loyalty.

If you’re in the same boat as many midsize companies, however, embracing the change isn’t easy—even when you know it’s the right thing to do and want to do it. You didn’t get to the point of having 500 or 1,000 employees overnight. You have existing processes and systems that probably weren’t designed for this much more connected, interactive world of commerce.

For instance, in the past, sales and marketing have often focused more on pushing out messages to the market rather than actively listening to and engaging with customers to understand their wants and needs. The focus has been to move the customer through the pipeline, close business and push out information to get him or her to come back and buy more.

Thanks to the explosion of social and mobile technologies, however, things aren’t so neat and tidy anymore. The number of social sites and conversations is multiplying exponentially, and customers are more vocal. With mobile access, people can join the conversation, evaluate solutions and make purchases from any place and at any time. And their expectations are rising: They expect companies to be as agile in responding to their needs as they are in voicing them. They want things faster, on the devices they use; and if they don’t get what they want from Business A, they’ll just go to Business B.

A great example here is Blockbuster, which used to own the movie rental business. Then Netflix came on the scene, giving customers a more convenient way to rent movies than Blockbuster, first with its DVD-by-mail business, and then with video streaming. Netflix had the added twist of enabling users to rate movies and then receive recommendations for other films they might like—with a focus on delighting its customers. Meanwhile, Blockbuster stuck to its traditional model too long, was late to the game and ended up filing for bankruptcy—although it has recently been purchased by DISH Network and could rise again if it can create an edge in deciphering and responding to customers’ needs.

But it’s not just big companies that are tuning in to the smarter customer. For instance, my hair salon promotes its Facebook page to customers, and every day it posts any unbooked appointments for hair styling, coloring, facials, manicures, etc. on its wall. Customers such as myself that “like” the salon see these appointments each morning—and can book the open slots for 20% off! It’s a win-win: I get a great discount and my salon fills the slot. Another case in point is the medical practice that my family uses. The practice recently deployed an SMS text messaging service and started to offer patients the choice of being reminded of scheduled appointments via a traditional phone call or via a text. It’s in the early stage, but they’re finding that most patients prefer the texts—and that fewer patients are no-shows when they get a text reminder.

While monitoring and engaging in social media conversations is a great start, the area is so new that social media monitoring is often siloed and separate from traditional CRM, procurement or other systems—and the people who use them. If this is the case in your business, you’ve probably experienced disconnects between customer demand and your ability to satisfy it—and as a result, your business may have missed opportunities and lost revenues.

The mandate is clear: You need to adjust business processes to market to, sell to and service customers on their terms, consistently across all channels, to survive and thrive through this sea change. In a nutshell, work smarter. But how? While the die isn’t yet fully cast, we see several key points to consider when creating a transformational plan:

1.     Start with a strategy, not tools and technologies. The strategy should revolve around customer engagement and interaction. Different businesses will have different goals, depending on their particular needs, but are likely to include things such as maximizing the insights you get from customer interactions to better anticipate and respond to requirements; improving the customer experience; and improving decision-making efficiency throughout the commerce cycle. Think about the different customer and prospect touch points in your organization and how you can strengthen them, incorporating both internal and external input into the process.

2.     Consider how you’ll get the voice of the customer into the company. Does your company know where customers and prospects are talking about your brand, competitive brands and related industry trends? Are you participating in these conversations? Social media monitoring and management solutions can help you identify and manage outbound and incoming online interactions more efficiently. They streamline and consolidate relevant conversations from different places—blogs, social networks and other public and private web communities and sites. They help you to more easily monitor what people are saying about your business. And automating the process of delivering outgoing messages through multiple social media outlets can help you to amplify your presence across several social media sites.

3.     Determine how you’ll make social information actionable and measure outcomes. Getting information into the hands of marketing and sales people, product managers, developers or inventory managers is critical. Businesses need to get the data in a way they can use it, say to run a marketing campaign, close deals or better manage inventory. Information and analysis tools should also be integrated with existing CRM, supply chain or other systems—instead of siloed—so business users can see results, adjust and improve.

4.     Make consistency a priority. Providing customers with a consistent experience across channels is key. Whether they want to buy online, via a mobile device or in a retail outlet, the goal is to provide the best user experience. This means you need to make it easy for users to shop and buy where and when they want. It also means giving your partners an easy on-ramp to sell and support your products. Provide partners with the capabilities they need so that your customers can have a universally exceptional experience, regardless of which channel they buy from.

This is the second of a six-part blog series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s
Smarter Commerce solutions. In our next post, we’ll talk to Ron Kline, director of marketing for IBM’s mid-market division, for an overview of IBM’s Smarter Commerce solutions for SMBs. In the meantime, please share with us the successes you’ve had and the challenges you face in adapting your business to better serve smarter customers.

Most people know that, although they both work in talent acquisition, third party recruiters and internal recruiters serve very difference functions. As such, it makes sense to assume that each would rely on different technology to manage their own complicated and distinct workflows. As both tools are used in the arena of recruiting and hiring, though, many people lump applicant tracking software and recruiting software together. It’s certainly easy to confuse the two, and I thought it would be helpful to draw a clearer picture of what sets these two software systems apart.

Applicant Tracking Software and Recruiting Software: Difference at a Glance

At its most basic level, applicant tracking software is designed to automate the hiring process within a single organization from beginning to end. Recruiting software, on the other hand, manages the workflow in organizations hiring for a number of divisions, clients and job types (such as recruiting firms). There are some similarities in basic functionality, though. Before digging deeper into each system, it may help to take a look at them side by side.

Applicant Tracking Software: Candidate Management
Though there are functions that both types of software can perform, the ultimate focus of applicant tracking systems is the successful management of candidates through an internal hiring process. Because these systems automate functions that fall under the umbrella of human resources, applicant tracking software is often best suited for companies managing an internal hiring process.

Although vendors offer users various levels of functionality, even the most basic packages will usually cover these core capabilities:

●      The ability to track candidate status through the entire interview and hiring process, often including the ability to rate candidates and share thoughts and opinions internally.

●      A branded company job board where employers post open positions and candidates can submit resumes and complete role-specific employment applications.

●      A central candidate database that makes it easy for users to find candidates using keyword searches and custom filters.

Recruiting Software: Staffing Management

Recruiting software is uniquely designed to manage the hiring process for multiple jobs in multiple organizations. Because recruiters also rely on it to manage relationships with candidates and clients, recruiting software also offers functionality found in sales force automation software and customer relationship management software. As such, recruiting software is often considered a business solution, rather than a human resources application. Third-party staffing and recruiting firms benefit most from these systems

Recruiting software makes it easy to manage the granular details of staffing. Beyond core functionality found in applicant tracking software, most systems offer these capabilities:

●      Tools for managing a large number of active candidates – including flagging top candidates for quick access, sending multiple candidate profiles for open jobs and tracking important documents (i.e., resumes, certifications, and I-9s and more).

●      Customer relationship management functionality for maintaining existing relationships, prospecting future business and billing for placements.

●      A streamlined job posting process, with the ability to post jobs on your website, commercial job boards, and via social media outlets

If you’re in the market for applicant tracking or recruiting software, of course you’ll want to do your due diligence. The main thing to consider is: Which applications and what type of functionality will benefit my organization most? Beyond this guide, you can check out a list of a few of my favorite web-based applicant tracking systems. Also be sure to check out product demos, and ask a lot of questions.

After HP’s announcement that it would ditch it’s new Touchpad and put WebOS in mothballs, rumors leaked about it’s intentions to spin-off or sell it’s Personal Systems Group (PSG) PC business and acquire information management software vendor Autonomy for $10.2B. Combined, these moves confirm HP’s CEO, Leo Apotheker’s strategy to get out of the low-margin device business and create a bigger footprint in the higher margin software and services arena.

On the surface, perhaps, not a bad plan. After all, margins in the PC business will only continue to shrink, HP has a (very expensive) white elephant on its hands with WebOS, and Apotheker is of course a software wonk. Furthermore, IBM made what turned out to be a great decision when it sold its PC business to Lenovo back in 2004— and it seems like HP has been an IBM-wannabe for at least the last 20 years, so why not follow suit?

But, there are some very significant reasons that the outcomes resulting from HP’s decision are likely to be very different from IBM’s— many of which revolve around the SMB market.

Being in the Right Place at the Right Time, with the Right Strategy

Unlike IBM, HP has had a significant presence in the SMB and consumer segments. Although PSG accounts for less than 15% of profits, it comprises about one-third of HP’s revenues. In contrast, IBM has always been an enterprise-focused company, with no intentions to make a big play in the consumer market. IBM had been selling off PC-related assets, and had already tipped revenue and profit scales in favor of services and software before it sold its PC division as part of a long-term strategy to exit commodity markets. The Lenovo deal also provided IBM with a partnership opportunity to make huge inroads into selling higher-value products—software, servers and services—into the burgeoning Chinese market.

There’s also the matter of being in the right place at the right time. This is 2011, not 2004. The consumerization of IT is well underway. Employees (whether in small, medium or large businesses) are increasingly choosing to spend their own money to BYOD (bring your own device) instead of using a company-issued brick. And more companies are giving employees an allowance to purchase their device of choice.  This trend will only accelerate as younger employees—who expect cool gadgets—graduate and enter the workforce.

What’s HP’s SMB Entry Point Now?

To be truly successful in the SMB technology market—especially at the low-end—vendors need both a compelling entrée and solutions that can help these businesses grow. You can do it with a must-have business solution—ala Intuit—or with a solid line-up of IT infrastructure products and services. But, on the infrastructure side, PCs and notebooks have historically been one of the first IT products that small businesses buy. This is changing with the rise of smartphones and tablets, but these too are client devices. And SMBs will continue to buy PC and notebooks for the foreseeable future.

Which begs the question, what entry point HP will have into small business without PSG? HP lacks compelling small business solutions and has scrapped its plans for mobile devices. Printers—which HP will presumably hold onto—are even more of a commodity solution at the low-end of SMB than PCs.

HP’s Weak SMB Prognosis

Our prognosis is that without PSG, HP’s value proposition will be much weaker in SMB with this exit. PSG not only provided an entrée to upsell servers and services, but has been, for all intents and purposes, HP’s major marketing arm and “voice” to these businesses.

Meanwhile, since SMBs lack IT resources, they typically don’t want or can’t deal with multiple vendors supplying different pieces of the puzzle. This means that when HP hands off its PC business, both SMBs and the HP VARs that serve them—many of whom are small businesses themselves—will have the opportunity to rethink whether they want to stick with HP on the server side.

Who Gains

PC makers such as Lenovo, Acer, SONY and Toshiba should get a good bump, but Apple and Dell are the big SMB winners.

• Apple basically owns the tablet space until someone comes up with a way to beat them at their own game (which obviously is tough to do!). But its not just iPads. IDC reports that Apple sold 1.66 million Macs and reached an 8.5 percent share of the market, up from 7 percent in Q1 2010. While a lot of these sales are a result of the BYOD to work movement, more SMBs are also buying them because of their reputation for reliability and security. With HP’s imminent departure,  Apple which has the cool factor and typically affords  higher profit margins than PCs–may be very appealing to some VARs.

• Dell is now clearly poised to be the #1 SMB infrastructure brand. Since Michael Dell came back in 2008, Dell has surged in the SMB market. Not only will Dell take advantage of market uncertainty, but it is well-positioned in its ability to serve the end-to-end IT needs of SMBs, from PCs to servers to managed services. In the last two years, Dell has made a significant investment in listening to and understanding the needs of SMB customers, and it’s paying off. At the Dell Take Your Own Path event we attended in December 2010, SMB business owners told us that they selected Dell precisely because it could provide the broad range of infrastructure solutions and services that have enabled them to out-perform their peers. Dell continues to extend its SMB strategy and portfolio, with acquisitions and solutions such as it’s KACE infrastructure management appliance; Boomi, for application integration; and storage solutions, such as EquaLogic.  This gives it a solid foundation for extending its SMB footprint beyond PCs and servers.

While it hasn’t fared as well in the mobile device area to date, Dell is building a range mobile devices–laptops, tablets and smartphones–layered with a consistent user-interface called Stage. Over time, and allowing for mid-course corrections, this strategy has more potential to pay off for Dell with HP out of the picture. And, just as Apple will appeal to some disgruntled HP VARs, Dell will appeal to others, particularly those that want to pitch a complete solution from a single vendor rather than piecing together a patchwork of components from several vendors—not only because it’s easier, but because they’ll get better margins by concentrating their business with one supplier.

HP’s departure also opens the door wider for some less likely suspects. For instance, a vendor that already has an ongoing relationship with a large swath of SMB customers, a focus on mobility and the cloud, and willing  to place a strategic bet on the huge SMB technology opportunity. Perhaps a telco, such as Verizon? Finally, the ambitions of Amazon and Google, and their potential to disrupt the SMB market with whatever they have up their sleeves can’t be discounted.

Summing Up

HP’s move to increase its focus on high-margin software and services solutions will definitely impact its ability to maintain a strong position in the SMB market. Unfortunately for HP, it is also likely to find itself outflanked by IBM and hunted down by Oracle in the large enterprise space. Ironically, after growing to be the largest technology vendor in the world by acquiring vendors from Compaq to 3Par to Palm, and now Autonomy, HP appears to be headed back where it started from when it made the Compaq acquisition in 2001: in an uncomfortable middle ground with formidable competitors ready to pounce on all sides.

Immediately after the acquisition, Salesforce announced that while Dimdim would remain “fully operational during the transition,” it would “no longer be accepting new registrations.” Instead, Salesforce is focusing on bringing Chatter and Dimdim together to provide what it terms “Facebook for the enterprise.”

What’s Next

Last week, we had a follow up briefing with Salesforce’s Mike Micucci, VP Product Management, and Steve Chazin, Senior Director, Product Strategy, to learn more about these plans. Essentially:

• Salesforce will peel off the Dimdim front end and reconstitute Dimdim’s real-time collaboration capabilities into Chatter. This will give Salesforce a way to provide Chatter users with real-time presence capabilities, so users can see who else on their team is online and their status via a button on their Chatter screens, and start “in context” meetings on the fly.

• Salesforce will focus initially on connecting internal team members via Chatter, but over time, will broaden this to connect partners and customers as well, integrating them with its Activa acquisition. (Salesforce acquired Activa, an enterprise chat startup that provides on-demand live chat software for customer service, support and online sales interactions last September).

• The vendor will also explore incorporating audio, screen sharing and video capabilities from Dimdim into Salesforce as well.

While Salesforce is currently deferring to standalone Web conferencing partners (they actually conducted their briefing with us via Citrix GoToMeeting!) in the realm of scheduled meetings, I believe that its only a matter of time before they turn this service on, as users will want it.

Quick Take

With over 1 million registered users, it’s safe to say that Dimdim’s service will be missed by many SMBs–including the SMB Group!

But Salesforce has set its sights on a much bigger picture–one in which it is building, acquiring and integrating the components it needs to become a major player in the collaboration space. As we discuss in Moving Beyond Email: The Era of SMB Online Collaboration Suites, Salesforce’s collaboration strategy is oriented towards social media, real-time activity streams and tight  integration with its CRM offering.

The Dimdim acquisition gives Salesforce the ability to aggregate and integrate real-time capabilities across the Salesforce cloud, via a single mechanism, with multi-device access. Combined with its own Chatter platform, and acquisitions of Activa and GroupSwim, which provides collaborative semantic analysis technology (a fancy way of saying that it has technology that allows people to automatically analyzes and tags content with keywords in a collaborative way to make for easier, more relevant searching), Salesforce is stringing together an impressive set of collaboration capabilities.

Salesforce indicates that more than 60,000 companies have already deployed Chatter, and the vendor recently unveiled Chatter Free, a freemium service to entice non-Salesforce customers to the Chatter fold. With viral routes into both installed base and off base customers now in place, look for Salesforce to give the existing collaboration powerhouses–Google, IBM Lotus and Microsoft–an interesting run for the money.

As I wrote after the Metamorphosis event, IBM’s acquisition of Cast Iron put the spotlight on the tremendous demand that cloud computing is creating for integration software to bridge the gap between on-premise and software-as-a-service (SaaS) applications—as well as between SaaS solutions. This drumbeat has continued to strengthen, leading Dell to the conclusion that Boomi’s integration capabilities are an essential ingredient to making its Virtual Era solutions and services strategy a success. Integration is very strategic and critical for both IBM and Dell, and each has vast marketing and technology resources to invest in these acquisitions. As a result, Cast Iron and Boomi are likely to become more formidable opponents for Pervasive.

So how will Pervasive, which has arguably been the market leader in the integration space to date, fare as competitive pressure continues to mount? Based on what Pervasive announced at IntegratioNext, and as importantly, the conversations I had with many customers and partners at the event, I think Pervasive will manage just fine, for several reasons.

1.     Pervasive has an innovative, stress-tested integration portfolio that’s growing stronger. Pervasive has been a leader in helping end-user customers, ISVs and channel partners solve the tricky problems of data and application integration since 2003. Today, Pervasive’s integration line-up includes a wide range of integration options for on premise, cloud to cloud, between cloud and on premise, including:

• Data Integrator, an integration platform that connects a plethora of databases, flat files and legacy formats and applications, including virtually any software-as-a-service (SaaS) and on-premises applications. With the latest release, Data Integrator V10 in now available the cloud as well as on-premise.

• DataCloud2, initially launched in 2009, is a fully multi-tenant, on-demand integration platform that combines the Data Integrator platform and DataSynch with Pervasive Integration Agent, a lightweight agent that sits behind a company’s firewall to connect on-premise apps with the cloud. Developers can tap into Pervasive data services, including its catalog of data adapters, to accelerate development.

• DataCloud Marketplace, where both customers and partners can shop for integration tools. End users only buy the solution the need, they don’t have to purchase other technology from Pervasive. Pervasive has already created several small business integrations, such as Salesforce.com to Intuit QuickBooks and Salesforce.com to Freshbooks–pricing starts ad $19.95 per month.  Developers that create integrations with Pervasive technology can put them the marketplace, set their own price, and create an ongoing annuity revenue stream.

2.     Pervasive enjoys a great track record with ISV partners. About 60% of Pervasive’s business today goes through the channel, mostly via ISVs that embed Pervasive integration within their solutions. Embedded ISV integrations are becoming a key differentiator for business software and cloud vendors because they ensure that the integration won’t cost more than the solution.

3.     More focus on the SI and consultant channel. While embedded ISV integrations are a great, friction-free way to provide integration, they won’t solve for an endless combination of integration scenarios—particularly in the SMB market. Pervasive is providing more tools and marketing programs that SI and consultant firms are also finding very attractive. Strategic Growth, for instance, uses Pervasive technology to provide reasonably priced, repeatable and easy to integration between Salesforce.com and NetSuite. Since these software vendors won’t integrate with their competitors, partners can seize on the opportunity to build new revenue streams by creating integrations to serve their own customers, which they can also sell in the Pervasive Marketplace.

4.     The integration challenge has always been complex, and is becoming more multifaceted. More applications need to be integrated both in the cloud and on premise. In addition, adoption of new mobile and social media solutions is on the rise. By providing more turnkey (and less costly) integrations Pervasive and its partners can alleviate the problems of one-off custom integrations and costly updates.

5.     Pervasive is taking significant strides to boost its marketing capabilities. Pervasive hasn’t always articulated what it does and how it helps as clearly as some of its competitors. But, the vendor has hired new marketing people to help it articulate its strategy, messaging, and the business value of Pervasive integration solutions in a clearer, more compelling way. At the event, I did notice that Pervasive sessions seemed much more tuned to business value than in the past–now they need to keep it going.

Finally, Pervasive enjoys its freedom. Although I don’t believe that IBM and Dell will squander their respective acquisitions of Cast Iron and Boomi, each of these acquired companies is now a little fish in a very big pond. As such, they are likely to sacrifice some agility as part of these larger, more bureaucratic companies. In contrast, Pervasive, as an independent company, can keep a laser-like focus on integration, without worrying about having its focus diluted and/or dispersed within a large IT company that has many other irons in the fire.

Highlights:

In May of this year, IBM acquired Cast Iron Systems (for an undisclosed sum) to help customers more effectively tackle the challenges of integrating cloud and on-premise solutions. Cast Iron, which was founded in 2001 and has 75 employees, provides hundreds of pre-built templates and a “configuration, not coding” approach to help streamline and shorten the time application integration. Cast Iron’s OmniConnect portfolio includes three deployment options, which all share the same interface, and deliver user interface mashups, process integration and data migration capabilities:

• Cast Iron Cloud2, a multi-tenant Integration-as-a-Service cloud offering
• Cast Iron Physical Appliance
• Cast Iron Virtual Appliance

Cast Iron has positioned itself as the “The #1 SaaS and Cloud Integration Company,” with more than 450 mid-market customers and an unspecified number of large enterprise accounts. Traditionally, Cast Iron has competed against rivals such as Boomi, Informatica and Pervasive in the integration market.

IBM will make Cast Iron’s solutions available worldwide as part of the WebSphere integration portfolio.

Quick Take:
IBM’s acquisition of Cast Iron was driven by a few fundamental market trends. First, cloud computing growth is exploding. IBM is forecasting global market CAGR for cloud computing is expanding by 28%, from $47BB in 2008 to $126B in 2012. In addition, data volumes are rising exponentially. IDC forecasts that data stores are growing an average of 60% annually, fueled by factors including the social media explosion, and the increasing trend to aggregate, mine and monetize data. More and more of this data will be stored in the cloud.

These forces ratchet up the need for simpler, cheaper integration alternatives. In the cloud, data and data control are widely distributed. And most companies will continue to operate in a blended or hybrid computing approach for the foreseeable future. Connectivity scenarios between cloud applications and data sources, cloud to on-premise, and between public and provide clouds are spiraling the number of possible integration scenarios. Developers, integrators and customers must deal with a staggering number APIs and technologies to accomplish these integrations.

While IBM’s WebSphere already includes a wealth of integration capabilities, Cast Iron enables IBM to provide more turnkey integration, which reduces cost and complexity, and removes significant barriers to cloud computing adoption. By leveraging this streamlined approach, IBM can strengthen its role as a integration hub for its existing enterprise customers, and more readily extend its integration footprint into the mid-market.

Of course, IBM had other acquisition options, most notably Pervasive, which is a significantly bigger company than Cast Iron, boasting more than 1,000 SaaS integration customers and dozens of integrations; and Boomi, which focuses exclusively on a cloud-based integration platform, and offers dozens of integrations. (Interestingly, Boomi, Cast Iron and Pervasive–all provide integrations for several of the leading SaaS vendors.)

So why Cast Iron? My take is that IBM took this route for a couple of reasons. First, I think IBM likes the fact that Cast Iron’s line-up features software, cloud and appliance options. IBM has been putting a lot of focus on appliances, in particular, as bridge between on-premise and cloud solutions. Cast Iron provides an appliance option, and also provides integration in a uniform way across all three delivery models. In addition, IBM likely viewed Pervasive’s PSQL database business, which still accounts for a majority of Pervasive’s revenues, as an asset it didn’t want or need.

For these and other reasons, the Cast Iron acquisition makes sense for IBM. But will IBM be able to successfully surface and leverage Cast Iron’s automated, simplified approach within the context of an increasingly complex and crowded WebSphere and Software Group portfolio–which, I’m told, is now comprised of more than 30,000 different offerings? IBM already has two disparate integration stacks, WebSphere for application integration, and InfoSphere for data integration. Smaller acquisitions have tended to get lost in the IBM shuffle in the past, and IBM Software has made additional, bigger acquisitions (such as Sterling Commerce and Coremetrics) since it acquired Cast Iron.

Meanwhile, what moves will Pervasive, Boomi and Informatica make to meet the challenges of a new integration gorilla in the mist? As important, what plays will IBM’s traditional competitors, such as Oracle and SAP, as well as cloud leaders such as Google, Amazon, Salesforce, etc. come up with as they pursue similar goals? Are other integration acquisitions in the works?

I don’t have a crystal ball–or inside information–to know how the details of new developments will unfold. But as the drivers for more streamlined cloud integration continue to intensify, this promises to be a very interesting space and one I’ll be watching closely.

• Cast Iron Cloud2, a multi-tenant Integration-as-a-Service cloud offering
• Cast Iron Physical Appliance
• Cast Iron Virtual Appliance

Cast Iron has positioned itself as the “The #1 SaaS and Cloud Integration Company,” with more than 450 mid-market customers and an unspecified number of large enterprise accounts. Traditionally, Cast Iron has competed against rivals such as Boomi, Informatica and Pervasive in the integration market.

IBM will make Cast Iron’s solutions available worldwide as part of the WebSphere integration portfolio. .

Quick Take:
IBM’s acquisition of Cast Iron was driven by a few fundamental market trends. First, cloud computing growth is exploding. IBM is forecasting global market CAGR for cloud computing is expanding by 28%, from $47BB in 2008 to $126B in 2012. In addition, data volumes are rising exponentially. IDC forecasts that data stores are growing an average of 60% annually, fueled by factors including the social media explosion, and the increasing trend to aggregate, mine and monetize data. More and more of this data will be stored in the cloud.

These forces ratchet up the need for simpler, cheaper integration alternatives. In the cloud, data and data control are widely distributed. And most companies will continue to operate in a blended or hybrid computing approach for the foreseeable future. Connectivity scenarios between cloud applications and data sources, cloud to on-premise, and between public and provide clouds are spiraling the number of possible integration scenarios. And developers, integrators and customers must deal with a staggering number APIs and technologies to accomplish these integrations.

While IBM’s WebSphere already includes a wealth of integration capabilities, Cast Iron enables it to provide more turnkey integration, helping to reduce cost and complexity, and in doing so, removing significant barriers to cloud computing adoption. By leveraging this streamlined approach, IBM can strengthen its role as a integration hub for its existing enterprise customers, and more readily extend its integration footprint into the mid-market.

Of course, IBM had other acquisition options, most notably Pervasive, which is a significantly bigger company than Cast Iron, boasting more than 1,000 SaaS integration customers and dozens of integrations; and Boomi, which focuses exclusively on a cloud-based integration platform, and offers dozens of integrations. (Interestingly, Boomi, Cast Iron and Pervasive–all provide integrations for several of the leading SaaS vendors.)

So why Cast Iron? My take is that IBM took this route for a couple of reasons. First, I think IBM likes the fact that Cast Iron’s line-up features software, cloud and appliance options. IBM has been putting a lot of focus on appliances, in particular, as bridge between on-premise and cloud solutions. Cast Iron provides an appliance option, and also provides integration in a uniform way across all three delivery models. In addition, IBM likely viewed Pervasive’s PSQL database business, which still accounts for a majority of Pervasive’s revenues, as an asset it didn’t want or need.

For these and other reasons, the Cast Iron acquisition makes sense for IBM. But will IBM be able to successfully surface and leverage Cast Iron’s automated, simplified approach within the context of an increasingly complex and crowded WebSphere and Software Group portfolio –which, I’m told, is now comprised of more than 30,000 different offerings? IBM already has two disparate integration stacks, WebSphere for application integration, and InfoSphere for data integration. And, smaller acquisitions have tended to get lost in the IBM shuffle in the past, and IBM Software has made additional, bigger acquisitions (such as Sterling Commerce and Coremetrics) since it acquired Cast Iron.

Meanwhile, what moves will Pervasive, Boomi and Informatica make to meet the challenges of a new integration gorilla in the mist? As important, what plays will IBM’s traditional competitors, such as Oracle and SAP, as well as cloud leaders such as Google, Amazon, Salesforce, etc. come up with as they pursue similar goals? Are other integration acquisitions in the works?

I don’t have a crystal ball–or inside information–to know how the details of how new developments will unfold. But as the drivers for more streamlined cloud integration continue to intensify, this promises to be a very interesting space and one I’ll be watching closely.

Naturally, our conversation centered on the small business angle, which Brent quite appropriately titled, Does IBM Really Want to Get Small? Thoughts From The Lotusphere with Laurie McCabe. Like many others before him, Brent was curious about how serious IBM really is about pursuing small businesses—and ready to gear up against some very serious competition from the likes of Google, Microsoft, Zoho and others to win small business hearts and minds. You can listen to or download the conversation here (just scroll to the bottom of the page).

We discussed several of these, from desktop virtualization to supply chain and transportation management. One of the initiatives that I was most interested in is IBM’s Scalable Modular Data Center (SMDC) for midsize companies. SMDC provides end-to-end consulting and implementation services (including planning, design, construction and full production testing) to help firms run their IT operations in a greener, more cost-efficient way. Despite the sluggish economic recovery, take up for the service has been phenomenal. Since announcing SMDC about 30 months ago, IBM has implemented more than 200 scalable modular data centers for midsize organizations, and helped another 200 to 300 customers a year to restructure existing facilities to achieve energy and cost savings and improve IT reliability and performance.

With so many green IT offerings vying for midsize customers’ attention, why is SMDC gaining so much momentum? I see a few key ways in which this solution stands out in the sea of green IT, including:

• Connecting the dots to illustrate big picture value. Many companies want to reduce their carbon footprint, but they also need a clear and compelling connection between energy-efficiency and financial and IT performance gains. IBM has developed a strong business case for SMDC and provided customer metrics to back it up. For example, IBM and Business Partner American Power Conversion (APC) worked with Bryant University, a small private college in Rhode Island, to improve IT service levels, cut energy costs and reduce operational costs.  Bryant replaced four server rooms—none of which were providing the reliability and performance it needed—with a SMDC. As a result, Bryant has reduced energy consumption by 15% and operational costs by 21%, while providing a 12 to 15% improvement in service delivery.

• Starting with an upfront assessment service to determine if a company can stretch the life of an existing facility, or if it needs to build a new one. The first question the SMDC service helps customers answer is whether they can retrofit an existing facility to achieve the reliability gains and energy and cost efficiencies they need, or if they need to replace it.

If the customer has a traditional data center, IBM can often help the customer redesign it to increase utilization and efficiency. According to Steve Sams, most organizations use only 10% to 20% of their available technology capacity—and sometimes utilization is as low as 5%. Servers are cheap, so customers often end up just adding more servers to satisfy different requirements, without regard to the total operational costs. As a result, a company may be spending up to ten times more than they need on software licenses, maintenance, management, etc. As alarmingly, they also overspend on energy to power, heat and cool under-utilized equipment and space. In many cases, IBM can help customers use existing space and technology assets more efficiently. Simple things, such as turning up the temperature in the data center, moving things around for better airflow, and consolidating servers can generate up to 23% in energy savings, and about 40% to 50% of the total operational costs of the running the data center.

In other cases, such as with Bryant University, the organization doesn’t have a purpose-built data center. Servers, storage and networking gear are stashed in closets or spare office space. IBM helps them to replace this type of jury-rigged space with a modular data center that reduces energy costs up to 15% and improves IT reliability and performance.

• Centering design on midsize business requirements. SMDC services can serve companies with data center needs as small as 500 square feet. When a customer needs to start from scratch, SMDC provides a modular approach. New space can be added as needed in a plug and play fashion. With this approach, companies can reduce upfront capital costs by as much as 25%, and shrink ongoing expenses for electricity, maintenance, and energy consumption by 15%.

• End-to-end project lifecycle support. In addition to technology and energy assessment and implementation services, IBM provides data center construction planning when required. While Big Blue doesn’t pour concrete, it does develop design criteria and specifications, and provides a construction project manager to run the project. This includes monitoring and managing recycling for both construction material, such as steel and wood, as well as IT equipment. This end-to-end engagement is an important value-add for midsize companies.

• Helping to overcome cultural obstacles. Politics is often the obstacle that stops companies from making strides to consolidate IT operations in a more environmentally friendly facility. In some cases, strong business owner across different functions or departments want to control “their own IT”. They don’t want to let go of physical and operational control of IT infrastructure. IBM consulting services can provide companies with the facts and data points to convince skeptics of the business benefits of streamlining and centralizing IT facilities. Stakeholders can improve energy efficiency and cut costs for the organization, and get better IT performance and reliability. Furthermore, by reducing ongoing IT facility, maintenance and energy costs, they can free up resources for new initiatives.

The bottom line is that IBM has a very good story to tell as to how SMDC can help midsize companies gain significant capital savings, reduce ongoing expenses and cut energy consumption. IBM is also currently piloting a scalable modular server room service in India. This program provides a similar approach and benefits for smaller companies, whose data center footprint needs range from 10 to 50 square meters (roughly 100 to 500 square feet). IBM recently published its first success story in this space with Karad Urban Cooperative Bank.

As this pilot wraps up in the first half of 2010, I hope to get another update from IBM so I can give you some ideas as to how smaller companies can also go green and save green. In the meantime, let me know what’s motivating your business to explore green IT solutions in this poll.