IBM Launches Low-Cost Server for Small Biz ERP

In a move to reassure small-business customers that it plans to support Oracle’s software products for years to come, IBM announced a server package on Tuesday.

Intended for businesses with fewer than 100 seats of ERP software, the package is called the IBM System i 520 Solution Edition for Oracle’s J.D. Edwards EnterpriseOne.

It includes integrated hardware and software with enough disk storage to support an application suite including asset lifecycle, customer relationship, financial, human capital, project, supplier and supply chain management.

Oracle executives have been making efforts in recent months to retain the 5,000 J.D. Edwards customers they inherited when the company purchased PeopleSoft in January.

At a user conference in April, Oracle President Charles Phillips pledged to support the company’s full range of ERP products in perpetuity.

This product backs up his promise with an improved hardware platform, said Carter Adkinson, System i global sales and business development manager for Oracle at IBM in Armonk, N.Y.

The system is also priced to be cheaper than Wintel servers, computers that use Microsoft’s Windows OS and run on processors from Intel or Advanced Micro Devices. It uses an IBM iSeries 520 server running IBM’s Power5 processors and i5 OS, with the flexibility to run other operating systems from Windows to Linux or AIX.

IBM has struggled in sales recently because its machines have a higher sticker price than competing computers from Dell or Hewlett-Packard, Adkinson said.

The new server will compete on initial price as well as a lower cost of ownership over the long run, he said.

Reliability is important to system administrators since 70 percent of IT budgets are now spent on maintenance, with only 30 percent dedicated to buying new computers, he said. That ratio is the inverse of cost structures 10 years ago.

Users applauded the lower pricing, but said reliability was the most important factor.

“Anytime that you can get a hardware solution that is cost effective, and provides uptime of 99.99-plus percent, that is a win for customers,” said John Matelski, deputy chief information officer for the city of Orlando and head of Quest, a user group for PeopleSoft and J.D. Edwards customers.

“Having said that, costs tend to be more of a concern to C-Level executives. The feature and functionality of the overall solution is of greater relevance and importance.”

The new server supports that goal by hosting the database, Web gear and application gear on a single box, which is a huge relief to small and medium business (SMB) customers, Adkinson said.

IBM is willing to cut its prices to retain those customers because the SMB sector accounts for 20 percent of the company’s revenue, and is growing fast. The new server will be available on Aug. 11 for US$21,921.

-Ben Ames, IDG News Service (Boston Bureau)

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