Thursday, February 01, 2007

Lawson and IBM team for ERP sales to mid-market

Lawson and IBM announced an agreement today whereby IBM will co-develop, sell and implement Lawson's products specifically for small and mid-size companies in the banking, insurance, fashion/apparel, and food/beverage sectors. Read Lawson's press release for more details.

This is not the first partnership between the two firms. Lawson already has significant connections to IBM in Lawson's Landmark development platform, which relies heavily on IBM's Websphere. The new arrangement brings IBM's services arm into the mix to promote Lawson in these key industries. If embraced by IBM's sales force, it will greatly increase the number of feet on the street pushing Lawson's products.

What's in it for IBM? Pull-through revenue from hardware, tools, and services.

The market is reacting positively to this announcement, with Lawson's stock price up over 5% today. I would wait a few months, however, to see whether this agreement amounts to anything. IBM has made similar arrangements with other software vendors in the past. For example, I recall a partnership between IBM and J.D. Edwards in the late 1990s, where IBM's resellers were authorized to sell JDE to the mid-market. I may be wrong, but I don't believe the program was terribly successful. In a more recent example, IBM and Intentia (coincidentally, now merged with Lawson) formed a similar arrangement in 2003. The press release is still on Lawson's website. But that relationship didn't seem to kick start Intentia sales.

So, I think the partnership is a good idea, but it will take more than an announcement to make it productive. It will be interesting to follow up in a few months to see what percentage of deals in Lawson's pipeline are connected to IBM's sales efforts.

Related Posts
New faces at Lawson
Lawson's performance better than it appears: CEO

1 comment:

Anonymous said...

You are absolutely correct that these deals depend heavily upon implementation of the agreement where the leather meets the pavement. I'm co-owner of a firm that is an IBM software reseller, integrator, and developer. If there is any reaching out to the IBM reseller community, it sure is buried deep.

I just looked on IBM Partnerworld, the main web portal entry point for IBM resellers, and the only real tie-in I can find with Lawson is Global Solutions Directory entry #25917, Lawson System Foundation 9.0, a pre-packaged software solution. That is the extent of the actual implementation of the agreement at the reseller level. Despite Lawson's stated desire in the PR release to integrate more with IBM's software portfolio, I'm in no hurry to contact them in the wake of this IBM-Lawson agreement, because I know the size of a company is a make-or-break criteria in their decision to work with IBM resellers.

In 2005, before the IBM announcement, we reached out to Lawson asking to apply to their developer program so we could develop plug-ins for IBM software to tie directly into Lawson. Specifically, for a batch scheduler that IBM sells, then later for other products in IBM's Tivoli portfolio. We were turned down flat. The reason was we were not big enough, despite having actual products for integrating IBM software with other products (more significantly, one of those integration points is with one of Lawson's competitors).

If Lawson continues to insist upon dealing only with big footprint companies regardless of what they can actually enable in the market, then *shrug*, nothing we can do about that except to keep focusing upon working with their competitors instead. I can understand if all they want to do is try to implement this agreement through IBM. They probably get hundreds of requests a month from fly by night self-proclaimed developers who want to "partner" with them, and have probably gotten burned in the past.

While faster, nimbler, more agile reseller/developers like us don't have the heft of IBM, we get solutions out the door quickly to respond to market demands for tight integration between products to deliver a finished solution; we literally don't eat if we don't supply what the market wants. In fact, we're keeping an eye out on when to integrate IBM products with open source ERP offerings. They aren't polished yet, but within 3-4 years they will be definitely "good enough" for a large chunk of the SME market, and they are a heck of a lot easier to work with as a small development shop, and the profit margins are frankly much higher. From a business model perspective however, I'd rather keep my focus on building and selling the integration products that enable solutions, so if I could develop integration products to give IBM software products deep access into Lawson to make more compelling solutions, I would rather do that. If someone from Lawson wants to discuss this, then they can reach me at, under the ID yenant.