IBM jumps into personalization race

Through personalization, e-businesses can analyze activities on their Web sites to help decide what kinds of content and advertising to divvy up to individual visitors.

"Personalization is a very important part of CRM [customer relationship management]. But it's been hard [for e-commerce sites] to develop and hard to build," contended Valerie Olague, director of product marketing for the WebSphere software platform.

IBM's WebSphere Personalization is part of a large set of Web middleware and tools that debuted at PC Expo in June. Some of the other WebSphere offerings announced at that time included portal, voice and content-management servers, for instance.

Earlier, IBM made a small foray into personalization in WebSphere Enterprise Edition. But WebSphere Enterprise contains only a "small subset of the rules-based filtering" included in WebSphere Personalization, Olague said this week.

With the rules-based filtering for the WebSphere products, developed in-house by IBM, Web sites can set rules along the lines of, "If a user spends $10,000 over a two-month period on a particular type of product, we'll give them a special promotion or enhanced discount," Olague illustrated.

While the rules-based filtering in WebSphere Enterprise is oriented to the banking and insurance industries, the rules-based filtering in WebSphere Personalization is meant to cut a much broader swathe, providing personalization across B2B and B2C sites alike.

WebSphere Personalization also adds collaborative filtering through Macromedia's LikeMinds technology. "With collaborative filtering, you can do statistical analysis of how a Web site is being used," according to Olague.

Noted Tracy Thorne, an e-business analyst at the Hurwitz Group: "As its name implies, LikeMinds helps to place the user in context with other like-minded individuals, and to give recommendations based on that."

Victor Botsch, an analyst at Gartner Group, says he thinks IBM has set pricing low enough to encourage use by developers who are only experimenting, not just those who've definitely decided to use personalization on Web sites.

Bob Monio, MarchFirst's executive director of strategic relations, acknowledged that IBM "may have come late to the personalization party." But he predicted that the product's Java underpinnings and integration with other IBM WebSphere products will hasten the adoption of personalization skills among developers at his large system integration house.

That, in turn, will help speed time to market for corporate customers seeking to add personalization to their sites, according to Monio.

"There are other competitors out there who have products. But IBM has [the] coverage advantage in feet on the street in [major corporate] accounts," he added. Monio also recognizes that, beyond being a partner, Macromedia is one of IBM's competitors in the personalization arena.

Meanwhile, Macromedia also is partnering with BroadVision, another player in the personalization niche. Through a deal announced in June, BroadVision is bundling a "fully functional version" of LikeMinds in its One-to-One personalization software.

Even more importantly, IBM's integration of capabilities like personalization might help to give WebSphere a lift in the e-commerce software space, observers suggested. The Hurwitz Group's Thorne pointed to a "trend to convergence" in application servers. "Wrapping both types of personalization into an integrated suite can help simplify the selection process for users," the analyst said.

According to a study released by the Giga Group in June, IBM's share of the app server market will rise to 24 percent this year, giving IBM a tie for the lead with BEA Systems. In 1999, according to Giga, IBM only accounted for 16 percent of the market, in contrast to 32 percent for BEA, last year's market leader. Giga projects that the application server market, estimated at $585 million for 1999, will rise to $1.64 billion in 2001 and $9 billion by 2003.

But it really depends on how you slice and dice the statistical pie. In July, IDC released a report stating that BroadVision held the lead in the e-commerce software applications market for 1999, followed by Oracle, Open Market, Vignette, IBM and SAP, in that order.

Over the past few months, however, Oracle has entered the application server market with the Oracle 8i application servers. Meanwhile, Microsoft is readying its series of .NET servers for release.

Oracle's iStore application already contains capabilities for personalizing storefronts. Microsoft's forthcoming Commerce Server 2000 .NET server reportedly provides greater personalization capabilities than the company's existing Site Server lineup.

IBM's WebSphere Personalization v3.5 is available immediately for Windows NT, Windows 2000, AIX, HP-UX and Solaris, at pricing of $10,000 per processor. IBM plans to release an edition for OS/400 on Oct. 31 and an edition for S/390 mainframes at a date still to be determined.