Big Data, Mobile, Social Drive IBM, Partners to New Opportunity
IBM announced the availability of $4 billion in financing in November 2012. However, 18 months prior to that, Big Blue made $1 billion in financing available to partners. "We expected the burn rate to be 18 to 24 months for that, but it turned out that it was done in only nine months," said Ed Abrams, vice president of midmarket business at IBM. "Given how quickly we went through that, we knew we needed to make more financing available." Meanwhile, Steve Mills, senior vice president and group executive for Software & Systems at IBM, said it's all about the Benjamins for him. "Above all, I want to talk about money," Mills said. "Whenever I'm involved with IBM's business partners, I move the conversation very quickly to money—not IBM's money, the business partner's money and how they can make more of it." IBM is intensely working on its lead-generation processes. "Business partners are a key route to market for IBM, and IBM is passing you more leads," Mills said.For his part, Jon Iwata, senior vice president of marketing and communications at IBM, spoke about the new challenges and opportunities for IBM. With all the instrumentation of the environment and the pervasiveness of mobile broadband, we have only seen just the beginning of big data, Iwata said. "The instrumentation of the planet is pervasive, with cameras and sensors everywhere," he said. "Mobile broadband is expected to reach 85 percent of the world's population in a few years." That means more and more big data challenges, and much of that data will be unstructured, which presents different opportunities for IBM and others. The CMO is a ripe opportunity for IBM and its thousands of business partners, Iwata said, noting that although the average tenure of a CMO in the U.S. is about 20 months, $1.5 trillion was spent on marketing and communications in 2011. Marketing budgets are expected to grow about 8 percent in the next 12 months, which is two to three times that of IT budgets, and CMOs owned or influenced $148 billion in IT-related spending in 2012, Iwata said. IBM aims to tap these opportunities. "We're teaming with an ecosystem of 132,000 partners to deliver value solutions around big data, analytics, cloud, social and mobile," Hennessy said. In 2012, 13,000 new business partners joined the IBM ecosystem, he said. "Half of IBM's Smarter Planet references came from partners," he said. On the hardware side, IBM's Systems and Technology Group (STG) is increasing the number of personnel in the field available to partners by 50 percent. In the cloud space, IBM has seen 80 percent growth in its cloud business during the last year, Hennessy said. "Another element of the cloud is that many of our partners are transitioning in the managed-service provider (MSP) space," he said. Indeed, IBM has 4,000 MSP partners, Abrams said. "Two-thirds of our MSP partners have evolved from traditional reseller partners and one-third is net new business—new companies born as MSPs."
IBM is making incremental payouts for competitive displacements, and there is a 3 to 20 percent incremental payout opportunity for approved clients when displacing technology from Microsoft, Oracle, Sybase and HP, in particular, Mills said. "Displace the competition and earn more," he said.