IBM, Lawson Link Business Offerings - TheStreet

IBM, Lawson Link Business Offerings

The companies take aim at small and medium businesses.
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IBM

(IBM) - Get Report

and

Lawson Software

(LWSN)

said Thursday that they are pairing up in a bid to take a larger slice of the small- and medium-sized business pie.

The two companies will combine Lawson's applications for certain markets with IBM's hardware, software and services expertise.

Specifically, they plan to target smaller banking and insurance companies, as well as manufacturing firms in the fashion industry, and manufacturers in the food and beverage market. Lawson has a strong background in these areas, says Ray Boggs, head of small- and medium-sized business, or SMB, research at IDC.

The announcement follows news that IBM has

created an SMB division in its hardware group in an effort to reach a larger chunk of small and midsize customers.

It's not surprising. Over the past several years, technology spending in the SMB market has been "much more healthy" relative to larger enterprise sales, Boggs says. In 2006, IDC found that SMB IT spending worldwide totaled $404 billion.

"The SMB community is ready for these solutions because now the majority of them have sever-based local area networks in place and broadband Internet access," Boggs says. "More and more SMBs are sitting at the grownups' table."

And at IBM, "senior management is recognizing the opportunity for growth in the SMB market," Boggs says. "

CEO Sam Palmisano has said it's a key growth engine for IBM."

The deal builds on an existing partnership between Lawson and IBM to facilitate their customers' move to open standards-based, service-oriented architecture, which helps automate businesses processes, the companies said in a press release. They already have 3,000 joint customers and plan to expand that number.

Boggs says the deal should benefit both companies.

"You as IBM are able to efficiently bundle with Lawson and get your solutions in the hands of more customers," Boggs says. In turn, Lawson becomes "very visibly associated' with tech giant IBM which packages the technology and services together.

Big Blue shares closed Wednesday off 22 cents to $99.15. Lawson ended off 1.7% to $7.51.