IBM is helping shepherd increasing numbers of local software companies onto the global stage as they move outside of the comfort zone of their home markets.
As well as software vendors looking to grow their revenue by developing an international business, customers are increasingly demanding that their technology providers can operate globally, according to Mark Hanny, vice president of ISV alliances with IBM. He was speaking this week at IBM's PartnerWorld conference in St. Louis.
IBM acts as a consultant to ISVs as they look to establish themselves in new markets. The vendor provides technical help, advice on the localization of their products, and how to get connected to local partners. IBM currently has 33 Innovation Centers around the world where partners can go to for such assistance, or they can connect with the centers virtually. IBM expects to launch an additional three centers later this year, mostly in Eastern Europe.
In many cases, IBM has had a presence in countries for decades, for example, having in operations in China for 50 years and in Brazil for 90 years. In those markets, "We are a local company," Hanny said.
The key piece of advice from both Hanny and ISVs who've partnered with IBM to enter new markets is the importance of hiring local people from the get-go, particularly around providing presales and postsales support for the software.
Business applications vendor TOTVS/Microsiga, which already dominates its home Brazilian SMB market, has teamed up with IBM to reach other countries in Latin America.
Coming from a Portguese-speaking nation meant TOTVS could easily sell its software in Portugal and through that country also reach users in the Portuguese-speaking nations of Angola and Mozambique in Africa. However, moving into Spanish-speaking nations in Latin America wasn't so straightforward, according to Claudio Bessa, corporate marketing and business director at TOTVS/Microsiga.
The Spanish used in each country is different, as is the style of negotiating business deals, another reason why having locals in place from day one is so important, he said. Also, Latin American countries have a host of legal and financial issues relating to ERP software. "The rules change every day, every single hour," Bessa added, not entirely joking.
The Brazilian ISV's software previously only ran on Microsoft's Windows operating system, and TOTVS has worked with IBM to have it also run on Linux.
Many companies initially look to enter markets that are geographically close to them. For example, business applications vendor Ufida Software, the largest ISV in China, is expanding its business elsewhere in Asia, notably Japan, Malaysia, and Singapore. IBM is helping Ufida enter those markets.
Hanny said he won't be surprised to see Ufida and another Chinese ISV, Kingdee International Software Group, which caters mostly to SMB applications users, as well as Brazil's TOTVS, enter the U.S. market within a few years.
"IBM's global technology unit [in Tel Aviv] was like our commando unit; it opened doors," said Udi Mokady, founder, president, and CEO of Cyber-Ark Software. The digital vault software vendor was founded in Israel, but soon after that, it established its headquarters in the U.S. in Newton, Massachusetts, retaining its research and development arm in Israel.
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