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IBM releases new version of software for online biz.

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CIOL Bureau
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NEW YORK: International Business Machine Corp. (IBM) said on Wednesday that it would spend $1 billion a year - and add 1,000 employees - to develop and market software products that help businesses operate online.



IBM announced the release of its new version of WebSphere, which manages the Web system of a business, and unveiled new products for businesses to run online commerce, wireless operations, manage Web site content and personalize a Web site for users. The company also said it expected to add more than 1,000 development and sales employees worldwide. Shares of IBM rose 5-3/16 to 114-7/8 Wednesday in active trading on the New York Stock Exchange, helping push the Dow Jones Industrial Average up about 90 points, or 0.87 per cent, to 10,595.



Hurwitz Group analyst Evan Quinn said the move marks a major and much needed directional shift for IBM's software unit. Instead of developing and marketing separate products, IBM is responding the market's demand for all-under-one-roof buying. "It's kind of a major departure for their software strategy," Quinn said. "Ultimately, what it comes down to is a response from customers. Companies really only want to deal with a handful of vendors. IBM created a more seamless set of offerings that are nonetheless adaptable. I think IBM recognized that. They're attempting to provide a lot of one-stop-shopping."



In addition, IBM said it will go all out to promote its WebSphere and related applications with television and newspapers advertisements and a series of promotional events. "We're going to blanket the Web with Web banners," IBM general manager of middleware John Swainson said of the online advertising. A major portion of the marketing money will be targeting sales and customer support. "I think they're on the right track," Quinn said. "IBM has taken it on the chin for not having shared set of messages in the software area or a holistic approach."



Staff engaged in middleware - those software products that connect varying operating systems and applications - make up about two-thirds of the approximately 3,000 to 4,000 people working in IBM's application and integration middleware units.



(C) Reuters Limited 2000.

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