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IBM, Intuit team on small-biz appliance

IBM Smart Cube packages QuickBooks Enterprise and Linux on SMB appliance.

IBM has never been known for its proficiency -- or even interest -- in serving small businesses.

That may be changing with IBM's new Smart Cube appliance which bundles hardware with Linux or the IBM I (OS/400) operating system, middleware and -- importantly -- Intuit's QuickBooks Enterprise accounting software.

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QuickBooks Enterprise handles up to 30 users and is a popular upgrade path for small businesses that outgrow lower end QuickBooks versions. Most QuickBooks Enterprise shops are companies with up to 200 total employees -- a demographic that IBM has largely ignored, while it focused on the upper reaches of the SMB hierarchy. Until now.

The economy probably has something to do IBM's new interest in smaller companies.

"IBM has been an enterprise vendor … and that part of the economy is not growing," said Andrew Abrams, executive director and co-founder of Technology In A Box LLC, a Milwaukee-based Intuit partner. Small businesses account for the bulk of what job growth there is in this economy, he noted. "There's growth there for solution providers such as us and accounting software is the best point of entry to those accounts," Abrams said.

That IBM is aligning with Intuit and not any of many other small business accounting vendors like Sage Software or Intacct is noteworthy. Microsoft's Dynamics line also competes in small business accounts.

But Intuit it is for IBM. "We do not plan to pursue similar relationships with other accounting software vendors," Matt Friedman, vice president of IBM Smart Business told via email. "QuickBooks is number one in this market and will be the premiere accounting solution for Smart Business. Of course we are engaged in and/or pursuing similar relationships with other ISVs to provide applications to fulfill different business needs. We are launching Smart Business and touting the relationship with Intuit … so visibly because they are so successful in the SMB space."

This appliance approach finesses the divide between on-premise software and cloud-based services. Many companies are still not ready to cast their lot with services beyond their firewalls -- a fear that last week's Google outage probably exacerbated, said Laurie McCabe, partner at Hurwitz & Associates, Newton Mass. Unlike prior-generation appliances that were restricted to one application, these newer boxes are fully featured and fully flexible, especially as they hook into cloud-based services, McCabe said. Users can buy additional software and services from IBM's cloud.

"People are still not over the hump with the cloud thing anyway and the appliance [model] fills a lot of the same needs as cloud computing without the same hurdles. It mitigates those fears," McCabe said. IBM's new entry comes with pre loaded and easily configured software but can also be updated and bolstered from IBM's cloud infrastructure.

Intuit may look to IBM as an ally to help fend off rivals that want to poach SMBs moving off of QuickBooks, observes said. Sage, SAP, Microsoft are all gunning for those accounts, said McCabe.

The cube comes preloaded with a full complement of infrastructure software including Java 5, Zend Core 2.5; Lotus Domino Utility Server Express; Tivoli Storage Manager; ISS Proventia Server IPS V1.0; DB2 Express Server 9.5 and WebSphere Application Server 6.1 . Three tower hardware configurations are available: one for up to 25 users with four GB of memory; another for 50 users and 8GB of RAM; and a third for 150 users with 16 GB memory

Available options including Domino Collaboration Express and Sametime are offered separately.

Abrams also lauded the offering's partner focus. "People can point to this and buy it but the sale is routed through partners like us," he noted.

IBM is not first to the accounting appliance. Sage Software has partnered with Applianz on analogous products. But both IBM and Intuit are huge brand names in their respective markets and clearly hope to make hay with that recognition.

The appliance starts at $7, 745 and is available from select IBM and Intuit business partners.

The biggest question some have regarding IBM's newfound SMB religion is how much ongoing emphasis it will get. "This is like a tiny grain of sand at IBM, " said one long time observer. "They launch many things that they then just let fritter away."

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