IBM: ISVs from Emerging Markets Play Bigger Role

The number of software developers in emerging markets, including China, India, Russia and Brazil, is rising faster than ever, and companies in these countries will play a more important role in the global software industry.

“The number of software developers and engineers in emerging markets is now starting to exceed the number in the U.S. and Western Europe,” said Buell Duncan, IBM’s general manager of independent software vendor (ISV) and developer relations, in a telephone interview. He estimated that there are a total of 15 million software developers worldwide.

“The number of software developers is very indicative and shows the importance and influence these emerging markets have on a global basis,” Duncan said. As a result, the IBM team that works with developers is putting a “disproportionate amount of focus on emerging markets,” he said.

The stakes are high for IBM, which has invested hundreds of millions of dollars over the years to provide technical, sales and marketing support for ISVs around the world.

The company generates a large chunk of its revenue by working with these partners. “For every dollar that is spent on the application software itself, it’s estimated that anywhere between five to seven dollars is spent on hardware, storage, middleware and services,” Duncan said, noting IBM generated approximately US$18 billion during 2006 in product and services revenue from its 500 largest ISV partnerships.

IBM has focused its efforts on building relationships with ISVs and developers in emerging markets to tap the high growth rates in these companies and get to know local companies and developers at an early stage. “You can’t tell who is going to be the next SAP,” Duncan said, referring to IBM’s largest ISV partner.

Working with IBM gives developers and ISVs the chance to tap into technical resources, including development centers and the company’s developerWorks website. IBM also offers these companies marketing and sales support, which can help ISVs in emerging markets expand their business internationally.

One such company is China’s UFIDA Software, which offers ERP and CRM software. IBM and UFIDA are working together to sell its application software to a Japanese customer in Tokyo, Duncan said, noting that Big Blue provided the initial sales connection and is helping UFIDA localize and port its software for Japan.

-Sumner Lemon, IDG News Service (Singapore Bureau)

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