The co-founders of Google (Nasdaq: GOOG ) were in grade school when IBM (NYSE: IBM ) began investing R&D dollars in search technologies. In fact, IBM has more patents in this space than any other company. Unfortunately, Big Blue has not effectively leveraged these assets, but that may be changing.
Take the company's recent deal with Yahoo! (Nasdaq: YHOO ) , for instance. This week, both companies announced a free limited version of IBM's enterprise search product, OmniFind.
With it, a company can search up to 500,000 documents (more than 200 file types supported), whether on an internal file server or the Internet. In fact, it takes only three clicks to install the software and uses the simple Yahoo! user interface. During the first few hours of the product's launch, there were more than 1,000 downloads.
Interestingly enough, this is a big threat to Google's incipient enterprise search business. For example, it costs $8,995 to buy Google's Mini product, which searches 300,000 documents.
As for IBM, it can afford to make basic search free. After all, the company has a comprehensive set of applications and services that can be up-sold. "We see search as a starting point for businesses," Marc Andrews, the director of strategy for IBM Search, told me in an interview. "By making it easy to access corporate information, there is then the need to analyze that information. That is an opportunity for our software products, such as the Information Server."
While IBM understands how to deliver mission-critical applications, it has been lagging in terms of providing a simple user experience. This is a critical point; just look at the success of companies like Salesforce.com (NYSE: CRM ) .
Thus, partnering with Yahoo! makes a lot of sense. And it shows that IBM can adapt, which, though not easy for a company its size, is necessary as it moves aggressively into the software space.
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Tom Taulli
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