IBM made a serious play into solidifying its presence in the international small and medium-sized business (SMB) market when it announced the creation of a "research and innovation center" in the heart of China.
The SMB Innovation Center will be located near the Beijing University of Technology and Tsinghua University, two of the top technical universities in Asia, drawing on what IBM executives call a necessary resource in the development process of new technologies in hardware and software.
Cathy Lasser, vice president of emerging markets for IBM, said such technology forays include wireless technology, RFID chips, Linux and other open source initiatives.
By placing the center in the heart of an educational hub, IBM has mimicked the September opening of the Linux Knowledge and Technology Center at the University of Brasilia in Brazil.
Lasser said the new location will give IBM researchers and local Chinese independent software vendors (ISVs) an opportunity to work with the next generation of technical leaders on modern applications for SMBs. There are roughly 10 million SMBs located throughout China, representing 99% of businesses for the entire country.
Those already familiar with IBM's efforts in China will note that the new center will merge with the existing IBM China Research Laboratory, established in 1995 and one of eight such facilities located worldwide.
Lasser added that the facility will double -- both in physical size as well as the number of researchers. She did not have a specific number of researchers, but said IBM currently employs "hundreds" in China, and approximately 3,000 worldwide.
With the creation of the center, Lasser and her colleague, Dave Carlquist, vice president of global emerging markets for IBM, said researchers will now have the chance to work with partners who understand local business needs.
These relationships will allow IBM to develop open standards-based technologies with a special focus on the global supply chain, Carlquist said.
Open standards and open source applications like Linux are especially prevalent and important in the Asian market. According to a recent Gartner study, the number of PCs shipped with Linux pre-installed will rise from 8.5% in 2003 to 10.5% in 2005.
"Absolutely, open source will play a role [in the center]," Carlquist said.
Tony Iams, an analyst with Port Chester, N.Y.-based D.H. Brown Associates Inc., said research ventures such as the SMB Innovation Center have the potential for giving a big boost to open source, especially with Linux.
Iams said IBM understands SMB requirements in that they've had other programs in the i5 that were very effective in this space, and that they have had a prolonged presence in SMBs and a strong presence in Linux.
"Naturally, they would want to put those two together, but they recognize this is a work in progress and maturity -- they're carefully waiting it out," he said.
Iams said IBM was taking the correct approach with centers like the one in Beijing, as it represents a way to tap into emerging markets where open source has taken root much faster than in North American markets.
"This is a golden opportunity … they build [open source] from the ground up and get Linux on there as soon as possible," he said.
Let us know what you think about the story; e-mail: Jack Loftus, News Writer