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IBM plans Web meeting service

IBM plans to offer Web-conferencing as a hosted Internet service, seeking to reach small and medium-sized business customers while taking on more established rivals in the market, the company said Tuesday.
/ Source: Reuters

IBM plans to offer Web-conferencing as a hosted Internet service, seeking to reach small and medium-sized business customers while taking on more established rivals in the market, the company said Tuesday.

International Business Machines Corp. said its new Lotus Web Conferencing Service requires users simply to register an account and have an Internet connection, a browser and a phone. IBM manages the computer networks that host the conversations.

The company is looking to compete in the multibillion-dollar market with leaders WebEx, Microsoft, NetMeeting, and a dozen smaller players in the online meeting arena.

Web conferencing services allow users to conduct meetings, share documents, presentations and software programs, over the Internet using a standard Web browser.

IBM already sells its Lotus Instant Messaging and Web conferencing software as a packaged product for companies that choose to manage the system on their own networks. Hosted services are typically 20 percent cheaper, IBM estimates.

Like WebEx or comparable companies, the new IBM Web-conferencing service allows users simply to send other meeting attendees a specific Internet address that they can sign on to through their Internet browser.

The service offers tight integration between the telephone and the Web-based document collaboration parts of the system, a weakness of many Web conferencing systems.

Customers who sign up for a Web conference will receive an e-mail directing them to a specific Web address. Once signed-on, users are asked to provide their phone numbers. The system then calls out the user's phone and hooks them into the Web conference. Participants on the road can take part just by dialing in via an IBM operator. Up to 100 can participate.

The software-as-service approach can appeal to small and mid-sized companies that don't have the money or expertise to run and manage complex network systems, IBM said.

IBM is one of the big computer companies increasingly looking to tap the subscription-based software market. For two years, it has been pushing software as a service and now works with 60 independent software vendors in this mode.

Global sales of hosted software is expected to grow at a 26 percent annual rate, to $8.1 billion in 2007 from $2.1 billion in 2002, according to IDC, the technology market research company. That's several times faster than the rate of growth for traditional software purchased and installed by customers.

Packaged software is sold for a one-time, up-front license fee. Under the software-as-service model, which IBM refers to as the "on demand" market, software is leased on a monthly subscription and delivered to users over the Web, as needed.

In a recent report on the trend, financial analyst Phil Rueppel of America's Growth Capital in Boston said SAP , the top maker of business planning software, is beginning to adopt the strategy, as is Siebel Systems .

"We continue to believe that these 'software as a service' models represent a significant change that is deeper than just new delivery and pricing schemes," Rueppel wrote in a recent note to clients. "This approach is likely to cause disruptive change in the software industry for the next decade," he said.