NEW YORK: International Business Machines Corp. signed a joint marketing pact
with electronic-commerce software maker Vignette Corp. that could boost IBM's
revenue by as much as $1 billion over three years, the Wall Street Journal
reported on Thursday.
The deal is expected to be announced Thursday, the Journal said in its
electronic edition. It is the latest in a series of IBM agreements with software
companies that establish IBM as the preferred provider of technologies to those
companies' customers.
The Journal said IBM would not disclose details of the Vignette deal.
Typically, similar arrangements call for IBM to get more than 50 per cent of
the unit sales of the associated products with the dollar amounts being
comparable, the Journal said.
The newspaper noted that in May, IBM's chief executive cited industry figures
for analysts showing that for every $1 a customer spends on an application, it
spends $1 on hardware, $1 on server software and $3 to $7 on services. IBM said
it has signed up some 30 partners that will lead to $8 billion in revenue over
the next three years, the Journal said.
IBM had $87.5 billion in overall revenue last year.
Under these agreements with software providers, IBM will not enter its
partners' software-application market and will promote the partners' products,
the Journal said. In return, the software vendors commit to selling a large
percentage of products for use on IBM computers and installed by IBM's service
group.
Vignette said it has rewritten its software to work with IBM's AIX, a variant
of the Unix operating software, according to the newspaper. Vignette will also
recommend to customers that they use Websphere and DB2 database rather than
Oracle Corp.'s database.
Shares of Vignette ended Wednesday at 35-1/8, off a year high of 100-5/8 but
up from a low of 8-5/16. IBM closed at 114-11/16, off a high of 137-1/2 but up
from a low of 89-3/4.
(C) Reuters Limited 2000.