Thursday, August 4, 2011

#OEM vs. #ASL: What's the difference?

Great question!  Here's the rundown....

OEM (Original Equipment Manufacturer)
  • IBM partner integrates IBM software into their solutions and embeds it with their application in order to build an integrated solution.  For example:  A partner sells a network appliance which includes Informix IDS or an automated teller machine solutions that requires a specific compoknent of DB2.
  • The partner sells the solution without IBM sales support to their end-users.
  • The partner's brand leads and the IBM software is typically not visible to the end user.
  • The IBM software cannot be uncoupled from the partners' solution.
ASL (Application-Specific License)
  • IBM partner builds an integrated bundle consisting of their application and IBM SW.
  • The partner's application code is customized to leverage the features and functions of the IBM middleware, creating an integrated solution.  For example:  An ISV partner's solution bundled with DB2 and WebSphere Application Server as required run-time components -enabling their software solution to function.
  • The partner's brand leads, but the IBM software is visible to the end user client.
  • Partners may choose to sell to the end user client without IBM sales support or in conjunction with IBM sales teams and programs.
Here are some other ways to look at it....


Click Graphic for Larger View


Click Graphic for Larger View

So...why did IBM separate ASL from the OEM go-to-market model?  To stop the confusion.  We want to deliver partners the program that best fits their needs.  Many software partners do not fit the traditional definition of OEM (Orignal Equipment Manufacturer):
  • They may not include hardware with their solution.
  • They may not hide the IBM software that they are integrating with their solution.
  • They may want to utilize IBM sales teams to endorse their solution or to participate in the sales cycle.
  • They prefer this type of contract with third-party software that enhances their solution.
Why would partners care about this type of agreement?
  • ASL eliminates having multiple contracts for their clients.  The ASL partner can deliver IBM software along with their solution on one contract (their own).
  • End users want an integrated solution with a single point of contact.
  • ASL partners want to manage their entire customer relationship, including technical support.
  • IBM's ASL contracts allow our partners to ship worldwide.
  • ASL partners want either a fixed price or a declining price over the contract life.
  • Partners' customers can get up and running faster with pre-integrated middleware stack(s).
  • ASL partners can reduce their development/training costs by utilizing IBM middleware.
  • Their sale is focused on the application.  ASL provides:
    • Shorter sales cycle and ongoing account control.
    • Independent pricing, improved margins - up front license and annual renewal.
    • Lower installation and support costs.
    • They don't have to write their own middleware.
    • They can focus on building their own value added components.
To see how and ASL agreement can help your business, call me today at 770-863-1493 or send me an e-mail at jagaeta@us.ibm.com.