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IBM, AT&T Forge New E-Commerce Alliance

By Mary Hillebrand
Oct 6, 1999 12:00 AM PT

IBM and AT&T announced today that they will join forces to develop, market and distribute end-to-end e-commerce packages for small and mid-sized companies.

IBM, AT&T Forge New E-Commerce Alliance

The world's largest computer maker and the world's largest telecommunications provider launched the "technology alliance" to reduce the complexity of developing e-commerce Web sites. The turnkey solution is designed to allow customers to create a Web site and develop an electronic catalog with secure capabilities.

This "out-of-the-box," simplified implementation is expected to give businesses the ability to develop a sophisticated site at the starting price of $35,000 (US$), plus Internet connectivity fees. Customers may also opt for a lease arrangement with IBM Global Financing for a monthly cost of less than $2000.

Vast Resources

"IBM studies show that small and medium businesses are looking for convenience, cost-effectiveness and vendor confidence when they choose an e-business solution," said Jim Corgel, general manager of Internet Service Provider Industry, IBM Global Industries. "IBM and AT&T are combining vast resources to meet those needs," added Corgel.

The $35,000 package consists of IBM Start Now e-business software, an IBM Netfinity, AS/400 or RS/6000 server and IBM's Business Partner customization services. Savoir Technology Group, Inc., an IBM distributor in San Antonio, Texas, will be the first to carry the new small business service.

AT&T will provide Internet connectivity through its Managed Internet Access Service for an additional fee. That service includes Internet connections from 56 Kbps to 155 Mbps, monitoring and maintenance, primary and secondary domain name system administration, usage reports and a network news feed.

Separate E-Commerce Initiatives

Both companies also announced individual e-commerce programs. AT&T unveiled a suite of Web housing services for companies that are too small for the joint AT&T/IBM project, and IBM announced services to help companies build industrial-strength Web sites.

AT&T Small Business Hosting will enable customers to easily register a custom domain name, create and publish a Web site in minutes and manage the site through a user-friendly Web interface that is available 24 hours a day, seven days a week. There are three levels of service, starting at $25 a month.

IBM introduced a new e-business service to help companies plan and build industrial-strength Web sites. The new service is designed for businesses with mission-critical Web functions. The service will help technology managers provide smooth performance during even during spikes in Web traffic.

Growing Market for Small Business E-Commerce

According to Cahners In-Stat, small businesses will increase their IT spending from $39 billion in 1998 to $87 billion in 2002. The number of small businesses implementing e-commerce solutions (44%) actually exceeds that of large companies (36%).

"Growing companies often have to divert precious resources from their core businesses to tackle complex Internet technologies," said Donus Sroufe, executive vice president of BMC Solutions, a company implementing a similar AT&T/IBM e-commerce program. "IBM and AT&T are delivering an attractive and cost-effective way to help companies set up shop on the Internet," explained Sroufe.

About the Companies

AT&T (NYSE: T) serves more than 80 million consumer, business and government customers and generates $53 billion in revenues per year. The company is also the largest direct Internet access service provider for consumers in the United States.

IBM (NYSE: IBM), with 80 years in the computer business, develops and manufactures computer systems, software, networking systems, storage devices and microelectronics.

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