IBM Has Come a Long Way

Recent moves prove company understands channel's value.

Its good to be an IBM partner these days.

The Armonk, N.Y., computing giant is bending over backward to prop up its partners, giving them unprecedented access to technical research, boosting the profitability of selling the companys software and encouraging partners to collaborate on projects they cant take on alone.

Other IT vendors should be closely watching IBM to get some pointers on how to treat their partners. It wasnt always so, but IBM has come a long way in recent years to build a channel infrastructure that not only challenges partners but also rewards them for their efforts in boosting the brand. IBM is setting a new standard.

Informing the vendors channel-friendly strategy is the recognition that channel partners, be they ISVs, VARs, system integrators or consultants, are the key to IBMs future growth.

IBM realizes, for example, that if it has any chance of gaining traction in the SMB (small and midsize business) space, it must do so in cooperation with the local VARs, who have a deeper understanding of customers in that space than anyone else.

The company disclosed during its annual PartnerWorld conference in Las Vegas March 12-15 that it plans to recruit 5,000 partners worldwide to get the brand into the SMB space. IBM also launched Express Advantage, a set of services for SMBs.

The SMB market, though vast and dynamic, traditionally has eluded the big IT vendors because, in focusing primarily on large customers, vendors werent very interested in the SMB market.

It would be easy to dismiss IBMs SMB channel play as merely a jump on the bandwagon, since every other vendor is tripping over itself to do the same. But Big Blues other channel moves of late have demonstrated a level of commitment to partners that is unrivaled in some ways. For example, the company has upped the level of compensation for partners that participate in software deals. Partners stand to earn as much as 40 percent of the value of the sale.

Partners qualify for commission by playing a role in any part of a deal: identifying the opportunity, negotiating the deal, closing a sale or handling fulfillment. This model recognizes partner influence, in that an ISV may register a lead and help negotiate a sale but not deliver the product. A VAR can step in to handle that piece of the transaction, and both the ISV and VAR benefit.

In addition to partner compensation, IBM is pushing technical innovation. To that end, the vendor is opening the door to its researchers so partners can work closely with them to develop innovative solutions for customers.

In a complementary move, IBM launched ValueNet, a program that encourages collaboration among solution providers to handle customer projects.

Partnering is a growing trend in the channel but typically is initiated by the partners themselves when they have a need; partners are less likely to agree to collaborate if they are being pushed by a vendor to do so. Channel companies have an interest in protecting their turf, be it geographical or technical, so trust is essential.

How successful IBM can be in getting partners to trust each other, unless they already have worked together, is an open question.

Overall, the spirit of what IBM is trying to accomplish with its partners is exemplary. Vendors such as Oracle and CA could learn a thing or two from the IBM approach.

Ultimately, everything hinges on execution. And as long as partners perceive that IBM will back up its plans with effective execution, they will play along.

Pedro Pereira is a contributing editor for The Channel Insider. He can be contacted at