06/01 3:27P (DJ) IBM Plans 'M-Commerce' Pacts With Web-Services Companies
Story 0730 (ACOM, ANSR, IBM, IBM.A, LUMT, OGNC, RAZF, RRRR, USIT, I/ADV...)
By Jennifer L. Rewick, WSJ.com
NEW YORK -(Dow Jones)- International Business Machines Corp. plans to
announce partnerships with eight Internet professional-services firms in an
effort to establish its software as a standard platform for mobile e-commerce,
people close to the companies said.
The announcement could come as early as Friday. An IBM (IBM) spokeswoman
said Thursday that "plans for a deal are underway."
The Web firms, dubbed the Pervasive Computing Alliance, comprise New York
firms Agency.com Inc. (ACOM), Razorfish Inc. (RAZF), Rare Medium Group Inc.
(RRRR) and R/GA Interactive Inc., as well as Organic Inc. (OGNC) in San
Francisco, Luminant Worldwide Corp. (LUMT) in Dallas, Answerthink Consulting
Group Inc. (ANSR) in Miami and U.S. Interactive Inc. (USIT) in Philadelphia.
These firms specialize in building Internet businesses and offer such
services as Web-site design, consulting and marketing.
Under the terms of the partnership, IBM, of Armonk, N.Y., plans to sell its
WebSphere Everyplace Suite server software to the firms at a discounted price.
In return, the firms agreed to use the IBM software in at least half of their
clients' wireless projects.
The agencies also will receive software training and are expected to
participate in joint marketing and development programs.
IBM has taken several steps to bring e-commerce to wireless devices. In May
it announced its WebSphere Commerce Suite software, which helps build mobile
electronic exchanges. Two months earlier, the company forged relationships
with key wireless industry players including Cisco Systems Inc. (CSCO), Intel
Corp. (INTC), Motorola Inc. (MOT), Nokia Corp. (NOK), Telefon AB L.M. Ericsson
(ERICY) and Palm Inc. (PALM).
IBM hopes to position WebSphere as the standard mobile e-commerce, or
"m-commerce," software. The software, which was unveiled in March and set for
release this summer, allows companies to develop, manage and deliver
e-commerce applications to wireless devices such as mobile phones and handheld
computers.
For IBM, the benefits include locking in customers early and the cachet of
having some of the hottest Web shops on its team. Although IBM has its own
Web-consulting practice, IBM Global Services, the boutique agencies bring to
the table their reputations for being nimble, cutting-edge shops.
"The theme for these hardware companies is to further entrench themselves
with the dot-com communities," says Kevin McCarthy, hardware analyst with
Donaldson Lufkin & Jenrette. "It's great advertising for IBM to be able to go
to their click and mortar customers and say, 'We're very much in bed with
these folks ... when you're doing business with them you're doing business
with us.'"
For the Web-services firms, the venture gains them access to IBM's sales and
marketing force, as well as potential business from large IBM Web clients such
as Merrill Lynch & Co. (MER) and DaimlerChrysler AG. (DCX).
The deal is expected to speed up the development of m-commerce. Agencies
began working on m-commerce strategies over a year ago, but client interest
and the proliferation of wireless devices has picked up speed only in the last
six months. Even now, handheld devices that connect to the Internet remain
more popular in Europe and Asia than in the U.S.
"Wireless is just starting to become an important factor," says David
Grossman, Internet analyst with Thomas Weisel Partners in San Francisco. The
"partnership with IBM accelerates [the firms'] move into the wireless space
with the potential of doing so with some very large, established companies."
Analysts warn that although IBM is ahead of its rivals, competition is
expected to heat up.
"There are a thousand Web shops out there -- it's hard to be a standard by
aligning with a half-dozen or a dozen companies," says John Jones Jr., analyst
with Salomon Smith Barney. |
