After six months and some 300 customer engagements, trying out a new sales and services approach that concentrates on industry-specific solution sets, IBM has decided to realign its global Linux-related sales and marketing teams around this model.
The Linux teams are now concentrating on selling and marketing 17 solution sets that address IT and customer business problems, rather than focusing on selling specific products.
The shift recognizes the growing demand from IBM customers that the company transform enterprise operations to become more responsive, “real time” and on demand, Scott Handy, the vice president for worldwide Linux at IBM in Somers, N.Y., told eWEEK.
IBM has aligned each solution with a services-led delivery capability, with specific business insight and solution customization by industry. This solution-delivery capability supports all operating system platforms relevant to IBMs customers, not just Linux, and is an extension of IBMs On Demand strategy, which is now tied more closely to Linux, he said.
Handy said the solutions are also really rallying or starter points for the various engagements, and while these industry-based solution sets represent the top issues those customers are dealing with, if there is a solution or technology they have that is not part of the set, IBM installs it.
“We prefer our stuff but well install anybodys stuff and, so, if we have to install someone elses product, well do that,” Handy said.
“The services arms are trying to be agnostic and a lot of the time the customer has no preference. In those cases, they will tend to favor our solution. But they are trained to be neutral, and if the customer has an opinion or already has skills that can be used we accommodate those,” he added.
But some competitors are not so kind. Martin Fink, the vice president and general manager of Hewlett-Packard Co.s NonStop Enterprise Division of its Open Source and Linux Organization, said IBMs change in strategy indicated they were being called to the carpet by customers to make their execution match the message.
“There is nothing new, different or challenging there, as it doesnt change the holistic nature of IBMs go-to-market model. From my perspective its an admission of guilt on their part that they had not mainstreamed Linux within the company, and now their customers are making them do that,” Fink said.
Steve Mills, IBMs senior vice president for software, said the company firmly believes in the co-existence of open-source and proprietary software across its solution stacks and offerings.
“That is very evident across a whole range of things we at IBM are doing that combine open-source and proprietary software. They are not contradictory, and help provide incremental customer choice. For businesses, the leveraging of value comes about through integration, and they want the certainty of openness, the freedom of choice and to take advantage of lower cost,” Mills said at the recent LinuxWorld conference in San Francisco.
Thriving communities are also building up around these technologies and customers have the ability to leverage that, he said.
“These things can be made to fit together, combining fee and free into offerings that customers can leverage. It also widens the ecosystem, facilitates more packaged offerings and encourages the industry to grow at an even faster pace,” Mills said.
Next Page: How IBM adds value for customers.
How IBM Adds Value
For his part, Handy said that IBM is the largest supplier of services on Microsoft Windows, and is one of the largest resellers of HP and Sun Microsystems Inc. equipment, “because in the end we do what the customer wants us to do. Solving their problems … is where the value creation lies in the relationship,” he said.
But Handy acknowledged that there are other industries and groups that IBMs solution sets do not yet cover, saying that those would come later.
“We are getting more aggressive about open source, as there is an energy around it and we want to tap that energy and have it drive the acceleration of open standards that create an open environment where our solutions become applicable to a wider number of customers,” he said.
IBM is in the business of providing value on top of open standards, including industry-specific standards, and is aware that the line will creep and that it has to keep providing the value the customers are paying for, he said.
Asked if this was not much the same strategy as the one Microsoft Corp. of Redmond, Wash., is adopting, Handy said Microsofts strategy is more of a product alignment and a focus on product-specific bundles for an industry, whereas IBMs approach is to identify a customer or industry pain point and then put together a solution that solves that problem.
Jean Bozman, an analyst with International Data Corp. in San Mateo, Calif., said the IBM move was also significant in that it indicates that many open-source applications are now deeply embedded in customer infrastructures.
IBMs Handy termed this a “valid point,” saying, “As soon as we shifted to an open-standards-based strategy, that allowed others to have compatible products to those standards, which is why customers like them. We do have to recognize these other implementations of standards.”
Bozman said, “The customer is clearly in the driving seat and increasingly wants certain open-source components as part of their solution stack. IBM is responding to that and is trying to embrace a wider set of customers by including more open-source technologies and processes in its own solution stacks and across the multiple hardware platforms it supports.
“While IBMs own proprietary products still remain a very important component of those solution stacks, it is now clearly showing its willingness to include other technologies if these help address customer problems. I dont see this as being disruptive to them selling their own middleware and hardware; in fact, it might be beneficial [as it may help in] growing the customer base,” she said.
Handy agreed that customers are not just interested in software, but are looking for a total solution, which was the rationale for IBMs industry-aligned move.
“We found that IBM was already doing this solutions work as part of its On Demand work, creating industry-specific solutions. So the decision was made to make Linux an integral part of all those solutions; and this resulted in the reorganization of the Linux team around this business, but not before we tested this out for six months by aligning and challenging some staff to sell this model,” he said.