IBM has announced the first e-business on demand applications for companies with between 100 and 1,000 employees. Partnering with independent software vendors (ISVs), the solution set covers CRM, HR and accounting applications, and pricing begins as low as $50 per month per user.
Mid-market customers will see the greatest value from on demand, according to Mike Riegel, global marketing executive for e-business hosting at IBM. “They don’t have large IT staffs and yet they still need the IT and business process applications. They told us they’d like to start with some of the back-office things, something for HR, CRM, accounting.”
Onyx is providing on demand CRM marketing and sales force automation; Intacct is providing on demand accounting applications for general ledger, AR and special applications; and Employease and HRsmart are delivering of human resources and benefits solutions that cover core HR functionality and also recruitment and workforce management.
Billing models vary by provider. While HRsmart is a fee per seat per month, Employease pricing is based on how many people are in the company… The business model is that as the ISV builds customers, IBM will gain more hosting revenue.
This seems somewhat similar to what Jamcracker had tried a few years ago. Integrated ASP services, aggregated from different vendors (best-of-breeds).
I think to make the ASP concept work, especially in emerging markets, what is needed is that the applications should run off a server on theLAN, rather than the Internet. Connectivity and bandwidth are big challenges. Also, what the customers will want to see is an integrated backend, rather than silos of information.