An ‘A+’ Deal: IBM To Private-Label Relativity Technology
By Rick Smith, LocalTechWire
“It will also be obvious to anyone evaluating application modernization and migration products that the IBM branded product is based on Relativity technology. In addition, our relationship with IBM has enabled us to have tight, clean integration with other IBM products. This is a clear and important competitive advantage. The overall benefits to Relativity dwarf anything else.” - Relativity CEO Steve Maysonave
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RALEIGH – The name will be different but the technology is the same, and the CEO of Relativity sees a private-labeling deal with IBM has putting a sales force of 12,000 people on streets around the globe touting enterprise application modernization.
Big Blue and Relativity disclosed Tuesday that IBM would license and market its own version of Relativity’s Modernization Workbench.
“This is an A+ validation of our technology,” Relativity CEO Steve Maysonave tells Local Tech Wire. “There is tremendous value to leveraging the IBM channel through their thousands of sales executives around the world. I believe that IBM's Software Group has approximately 40,000 employees with the world's largest direct software sales force of 12,000. That is why we are excited.”
IBM and Relativity have worked together in the past, and Maysonave sees this new deal as good news for his company’s sales.
“It will also be obvious to anyone evaluating application modernization and migration products that the IBM branded product is based on Relativity technology,” he says. “In addition, our relationship with IBM has enabled us to have tight, clean integration with other IBM products. This is a clear and important competitive advantage. The overall benefits to Relativity dwarf anything else.”
IBM Plans Quick Rollout
IBM expects to have its licensed version available the first half of this year. Its version will be integrated with WebSphere Studio Asset Analyzer and WebSphere Studio Enterprise Developer as part of an application transformation solution platform. Relativity will also train IBM workers in use of Workbench.
“More importantly, after IBM announces and ships our products, we anticipate a significant acceleration in royalty revenues from IBM that will continue to grow for many years,” Maysonave adds. “We also anticipate that our services and training revenues we grow significantly in 2005 in support of IBM activities
Relativity focuses on software that can be used to upgrade older mainframe systems through application analysis and “re-architect” them. IBM Global Services has already worked with Relativity on a variety of projects over the past five years.
“We have completed approximately 20 projects with IBM in recent years. This has been steadily increasing including several important projects in Europe in 2004,” Maysonave explains. “These successes and other very significant projects initiated in 2004 demonstrate the business value of the Modernization Workbench and the millions of dollars of related services that a large modernization project typically derives.
“The number of projects should dramatically accelerate in 2005. With over 10,000 IBM Software Group sales executives selling our product under the IBM brand, we anticipate very fast growth in the number of projects for many years.”
In a statement, IBM said it sees growing customer demand for modernization.
"Responding to new strategies and competitive pressures and moving to the on demand enterprise requires the ability to modernize the applications that today's businesses continue to rely on," said Yvonne Perkins, a vice president with IBM. "By working with Relativity to create an IBM-supported version of the Modernization Workbench, IBM is able to provide our clients with a software platform that accelerates and reduces the risk of modernization initiatives. The result is twofold: more efficient alignment of existing applications with current business needs, and systems that are less complex and easier to enhance."
Relativity will maintain and sell its own brand.
More Growth in 2005?
The IBM deal has Maysonave looking forward to 2005 with enthusiasm.
“2004 has been an excellent year in terms of the growth of our customer base, our partner network, and industry awareness of the need to modernize enterprise applications,” he says. “Relativity added 35 new Modernization Workbench customers during the past 12 months, and we are very confident about even faster growth in 2005.
“Our partner relationships continue to deepen, as evidenced by this IBM OEM agreement and others transacted in recent months with industry leaders. Application Modernization is clearly a hot sector from both a software and services standpoint. It enables enterprises to better leverage the value of their applications by reducing complexity, lowering costs, responding faster to new business requirements, and facilitating regulatory compliance.”
Maysonave also says the deal should have a positive effect on Relativity’s relationships with other partners.
“The IBM OEM agreement will have a positive affect on our relationships with other partners like Capgemini, CSC, Northrop Grumman, Patni, SAIC, US Technology, Cognizant, Sojitz, and others,” he says. “It is a validation of our technology and the marketplace. It is the best way for all of our partners to drag through millions of dollars of services business related to Application Modernization.
Relativity: www.relativity.com
