NEW YORK - Hoping to tap a rapidly growing market, IBM and AT&T Corp. are reaching out to small and medium-sized IT customers.
The two companies, in a press conference here at Fall Internet World '99, announced a partnership to offer so-called one-stop shopping for small and midsize businesses - those with 1,000 or fewer employees -- to start utilizing the Web in their enterprises.
The offerings, which for now will be available only in the U.S., will begin with a bundle of IBM hardware, software and services called StartNow. The package includes either an IBM Netfinity, AS/400 or RS/6000 server, IBM's Net.commerce e-commerce software, or related services such as consulting and installation.
AT&T, meanwhile, will act as the ISP and deliver Internet connectivity over its nationwide IP backbone.
The packages will be delivered through a jointly certified IBM/AT&T channel program, according to officials at both companies. The first channel partner involved in the program is Savior Technology Group Inc.
The cost will run as low as $2,000 a month, through arrangements with IBM Global Financing, to $35,000 plus Internet connectivity fees.
'Path of least resistance
Small and midsize businesses are spending increasing amounts on Web ventures. Some observers estimate that expenditures might reach $87 billion by 2002. In turn, large IT vendors are focusing as much attention on small and medium-size businesses as they would Fortune 500 companies.
Jim Corgel, general manager of Internet Service Providers at IBM, said the goal of the program is to offer small and midsize firms access to Web services that they either can't afford or don't have the IT skills to implement on their own.
"These companies need a low-cost IT option," he said.
In addition, those customers are looking for hardware, software and customized services that are scalable, allowing for change and growth within an organization.
With this program, the two companies will be competing against a host of small, medium-size and large service providers trying to claim a stake in the so-called SMB market.
Corgel said the two companies are going to market the program as the "path of least resistance" to becoming an e-business, and that the two companies' reputations will help attract customers.
In a related development, AT&T announced it is offering Web-hosting services for $25 a month for companies that have only a few dozen employees.
Although IBM offers similar hosting services, Keith Olsen, vice president for the AT&T Alliance Program, said the new AT&T service is aimed at smaller businesses, and it would not create a conflict with the new IBM-AT&T program.