IBM lets partners resell services to SMBs

LAS VEGAS – IBM Corp. broadcast two messages to resellers at its annual PartnerWorld conference here this month: continue focusing on selling services and products to small and medium business, and push the company’s “”on demand”” strategy.

On the former, it announced a range of initiatives including

the promise of spending US$1 billion this year to lure independent software vendors (ISVs) to shift their applications to run on IBM middleware. Other parts of the strategy will be rolled out through the year.

But there still appears to be — as one industry analyst here put it — some fog around the meaning of “”on demand.””

CDN learned of one change that will appeal to Canadian VARs which wasn’t announced here but will be shortly: Partners will be able resell products offered by IBM’s Global Services consulting division. Details are still being worked out.

That may address the surprising omission of Canada in one of the big announcements made here: IBM partners in the U.S. who resell IGS managed hosting services to small and mid-sized companies will be able to get up to a 100 per cent incentive increase above the existing program. It will be realized through an annuity throughout the term of the agreement and with a signing bonus.

U.S. partners will also be able to resell a special IGS managed hosting service for medium-sized business on Windows, AIX, Linux or Sun Solaris operating systems.

Asked in an interview when these programs will come to Canada, Gary Isaccs, IBM’s director of business partners in Canada said: “”I can’t see why we wouldn’t do that.”” He suggested that like other programs that start first in the U.S., they will move north in three months.

Another significant announcement made here was the upcoming simplification of the company’s partner programs, which may make it easier for solution providers to become top-ranked. Currently there are three levels, Premier, Advanced and Member for each of four tracks: software, services, personal computing and developers. Resellers have to meet certain training and sales criteria for a designation, which differs within each track. But it means a company could be a Premier software reseller and an Advanced services provider. Also, the reseller couldn’t use training credits earned under the premier designation to upgrade certification in the software section.

“”It gets confusing to customers,”” Isaccs said of the different designations. “”The implication is ‘you aren’t good on the other.'””

So next year the company will eliminate the tracks and simplify the criteria for attaining each level. A premier designation, for example, will apply across the board. The new criteria will be announced in April.

“”This is huge,”” said Dan Hinchey, who owns three MicroAge franchises in Western Canada and is a member of the PartnerWorld advisory committee.

“”It’s really going to help IBM strengthen their business partners across multiple tracks.””

As for ISVs, the company said it will spend US$1 billion this year to become IBM partners. The money will in part go to help them port applications away from proprietary languages and tools such as Microsoft’s C# and .Net to open standards such as Java, as well as to help them build their applications on IBM middleware like WebSphere, DB2 and the Lotus family.

IBM said it has signed more than 30 ISVs to the program and want to double that this year.

Other announcements which IBM hopes will help partners attract business from medium-sized companies included the consolidation of its education, porting and testing facilities. The renamed Business Partner Innovation Centres are a merger of existing storage and software centres, of which there are an estimated 14 in Canada. Operated by partners, these centres showcase reseller solutions and services built on IBM hardware and software.

As for the demand for on demand, IBM executives spent much time in both general and special sessions explaining, touting and honing the concept. Broadly, IBM uses it as a logo to mean its way of helping companies get information when they want it.

But partners confess the phrase doesn’t mean much to them or many of their customers. “”It’s inconclusive,”” Ross Salvo, president of Montreal-based SIA Service Information Access Inc. said in an interview here. “”Nobody understands it, but nobody cares.””

“”Progress was made, but there’s still more that has to be done,”” said David Weglo, Ontario director of sales for the Ram Group.

Robert Sproule, managing partner of the Kenna Group, a Toronto sales and marketing ISV, said the firm uses IBM “”on demand”” marketing material in its brochures, but its a concept his company doesn’t lead with.

“”It’s hard to associate what they mean by on demand,”” agreed Mika Krammer, research vice-president for Gartner Inc.’s SMB group, who was at the conference. “”They use it so much it’s like ‘e-business’ — it loses its edge or meaning.”” And, she added, it loses any excitement for partners and their customers.

Besides, she continued, customers don’t ask for “”on demand technologies,”” they want solutions.

“”Calling it what it is, especially the SMB market, gives you more traction, recognition and demand for your technology.””

As for the SMB push — which the company acknowledges is really aimed at the mid-market — she’s more encouraging, noting that recently IBM began offering tools to enable partners’ software solutions to be brought to this market.

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@]
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