Why IBM Gets the Channel’s Future

IT vendors like to talk solutions and innovation. Their business models are set upon managing commoditization and obsolescence. But even as they talk about the need to build value by delivering holistic solutions and augmenting technology with cloud services, they continually race back to their comfort zones, driven by their own compensation models, of selling products.

IBM is interested in selling products, but it’s taking a much longer view of the world. Rather than just being a product-driven vendor, IBM has set itself up to become a channel platform, on which solution providers of all stripes have the opportunity to build value-based businesses that aren’t reliant upon the IBM brand leading the way to market.

Making IBM different from other technology vendors is more than just its marketing slogans and monikers around “smarter planet” and “smart systems,” but rather the approach it’s taking to understanding shifting market needs and partner enablement. IBM understands that conventional technologies, even when converted to cloud-based services, will quickly commoditize. It knows value will come from integrated solutions that accrete more value for customers in the form of business growth, revenue enhancement and profitability.

“We’re trying to help business partners understand the line of business needs and create solutions,” Mark Hennessy, general manager of IBM Global Business Partners and Midmarket, said in a discussion with press at PartnerWorld.

Just how do solution providers engage in this future IBM envisions? Through participation in a dynamic ecosystem of overlapping technologies, market penetration and specializations that complement and enhance the offerings of IBM and partners in go-to-market solutions.

“The ecosystem is important as we move into integrated solutions,” Hennessy said. “The more we can help facilitate the ecosystem, the more competitive we will become.”

Unlike other vendors, IBM doesn’t feel the need to stand at the vanguard of this value-oriented ecosystem. Even as IBM presses into core technology markets such as Big Data, mobility, security, commerce, smart computing and cloud, it’s willing to act as a component in the systems developed and sold by its partners.

Moreover, IBM sees value in driving business to solution providers who won’t necessarily lead with the IBM brand. As the theory goes, IBM will gain sales if it providing marketing support, lead generation and technical assistance to business partners who develop solutions based on IBM’s technologies. The more business partners grow, the more they’ll consume IBM solutions.

IBM has one of the largest channel ecosystems on the market, with more than 130,000 business partner organizations around the world. The PartnerWorld message was essentially an invitation to all IBM partners and newcomers to leverage the programs, technologies and resources Big Blue has to offer in transitioning to its services-based future.

IBM has no illusions that this evolution will not be difficult. It fully acknowledges not all solution providers will develop the acumen and capabilities to execute on future business needs. However, IBM believes its new incentives, certifications, technologies and marketing programs are the foundation for enabling those solution providers willing to change.

None of this is to say that IBM isn’t interested in selling products. IBM is providing new incentives around its PureFlex integrated server-storage line, pushing hardware-based Big Data products, such as Netezza, and opening new opportunities in mobility with development apps such as CastIron and Worlight. But IBM sees these as pieces of the platform on which partners build and add value.

“Transition is tough to manage. The way you manage it is by starting with teaching the partners around customer needs; their delivery models and the difference between off- and on-premises models,” said Ed Abrams, vice president of midmarket at IBM. “Too many IT vendors are stuck in that old mold; we’re not and that’s our unique differentiator.”