IBM on Wednesday launched a program that provides new resources for software vendors to develop products and create programs based on the software-as-a-service concept.

Dave Mitchell, program director for software as a service at IBM, says vendor partners already have begun the transition from traditional licensed software models to software-as-a-service platforms, which allow customers to use software only as needed. However, many vendors need assistance in both the financial and technical details.

"How do you manage the change from a traditional licensed model to a software-as-a-service model?" Mitchell asked. "When they make this move, they have to consider things like revenue recognition, sales-compensation terms, use of distribution channels, and to what extent there may need to be a re-architecting of the technology and its delivery."

According to research firm IDC, the software-as-a-service market grew to $2.4 billion in 2004, and is expected to grow to more than $10 billion over the next five years.

Scott Hebner, VP of independent software vendor and developer relations for IBM, says the company had 70 software partners involved in its application enablement program last year, and believes that number of partners will grow to 100 by year's end.

Those software partners were able to generate about $100 million in revenue for IBM products and services last year, Hebner says. About half of those partners already are involved in a software-as-a-service model.

To assist partners in creating software-as-a-service programs, IBM has established technical workshops. Workshop topics include financial modeling and transformation strategies.

Mitchell says IBM also will help software partners tailor their offerings for specific target markets.

Says Mitchell, "We're adding capabilities to help them optimize by industry, partner with our sales and marketing team, localize support, and provide their customer more flexibility with software-as-a-service implementations."