IBM woos Net start-ups via three new programs

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Three years after it created an identity for e-business, IBM Corp. is revving up its next generation of initiatives.

On June 20, Big Blue will debut three programs designed to offer Internet businesses an array of customized IBM services and solutions.

The initiatives, emanating from IBM's year-old NetGeneration business unit, will address diverse customer needs and tap the expertise of IBM units such as Global Services, Global Financing, and the Software and Personal Systems groups.

The offerings, which are expected to be supported by a multimillion-dollar advertising and marketing campaign some time after Labor Day--via Ogilvy & Mather, New York--will serve up at least a dozen products and services under the NetGeneration umbrella. They include business recovery and infrastructure auditing services, as well as legal, consulting and global financing services.


IBM's goal is to provide Internet start-ups (what it refers to as NetGeneration businesses) everything they need, in a convenient suite of customized services that can be quickly accessed and deployed.

"We're trying to bring IBM's capabilities to this marketplace," said Jim Corgel, general manager of IBM's global NetGeneration unit. "We've had, in the past, a lot of activity, yet it was fragmented . . . The mission [now] is to make IBM relevant to this marketplace."

Mr. Corgel said NetGeneration businesses, whether they're in the start-up phase or farther along in their business models, want help. "We want to translate the e-business capabilities to a start-up business, communicate them and make the IBM brand visible and relevant to this market."

The June 20 announcements flag the IBM Incubator Series, a program that will translate all IBM's business capabilities across Internet companies' various models. So far, IBM counts five active incubators as clients, among them Spydre Technologies and Epoch Partners. Four more are expected to join the program this summer.

IBM also will introduce QuickLaunch, touting the capabilities of its business partners to deliver services to NetGeneration companies. This initiative will demonstrate how quickly Big Blue can deliver, according to Mr. Corgel.

And a Going Global program will work with Web start-ups to help them become global entities.

IBM has positioned NetGeneration managers in 35 cities around the world to help deliver education programs, customized seminars, organized networking and other services.

IBM has a wide target. It includes Internet service providers such as telecommunications companies, Internet portals like Lycos and Excite, Web-hosting companies, and application service providers such as Interliant and Citrix.

"We intend to touch as many segments and facets of the marketplace as we can," Mr. Corgel said. "We're going to do as much as we can to expand the IBM e-business branding and to personalize [services] for NetGeneration companies."

The NetGeneration business unit will be positioned as the single point of contact for Internet-based companies looking for IBM's help.


The marketing push comes as IBM beefs up alliances with Web integration experts such as Razorfish and grows its Web Innovation Centers. The company has major ties with 50 venture capital companies around the world to help translate its capabilities to start-ups.

For example, IBM has relationships with nearly 75 start-up companies in Internet Capital Group's portfolio. Venture capital companies, Web integrators and graduate schools of business are other natural alliances for IBM, Mr. Corgel said. NetGeneration representatives will work with universities in Latin America to direct students with hot business plans to IBM, he added.

If it sounds like a natural and relatively inexpensive marketing exercise to get in on the ground floor with start-ups, it is.

"IBM is smart enough and powerful enough to figure out how to lock up the start-up market," said one analyst. "It's a way for them to sell more services, hardware, software and support."

A multimedia marketing push aimed squarely at Internet companies is expected to showcase various customer segments, their real-life problems and specific products.

Copyright June 2000, Crain Communications Inc.

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