2 min read

IBM streamlines partner incentives while growing the pie

A revamp of IBM's partner incentives mean less programs, but more dollars flowing to resellers

A recent revamp of IBM Canada‘s (NYSE: IBM) partner incentive programs cuts the number of Big Blue partner incentive programs from seven to two, but the vendor insists the changes will mean a simplified structure that will see more dollars flowing to partners, and more quickly.

Stephen Timms, channel marketing and enablement executive with IBM Canada, said the changes in Canada largely mirror changes recently announced by IBM in the U.S., with a few tweaks to reflect local market realities and the more mid-market nature of the Canadian economy.

“We’ve simplified the number of programs so it’s simple for partners to understand what they can earn,” said Timms. “More partners can make more money with incentives now this year. We’ve designated partners as our prime route to market in the mid-market.”

As an example, Timms said partners used to have to hit a certain sales target before they began to see incentive dollars. Now, incentive dollars will flow from the first sale, ramping-up over time.

“It improves partner leverage by allowing them to make money right away, and gives them improved line of site into their earnings,” said Timms. “Now there’s no question about how much they’re going to make on a deal.”

The streamlined incentives scheme will fall into two categories: growth incentives and brand accelerators.

The growth incentives will be applicable on all sales to end-user customers. Partners will earn a standard rate on dollar one, and once a sales target is hit payments will accelerate, ramping-up further with every additional target achieved.

“Partners can actually double or triple their base-rate once they reach and overachieve their target,” said Timms.

The brand accelerator incentives are focused on expanding IBM’s partner base, and are targeted in areas where the vendor wants to be the market leader. Partners will earn “kickers” for sales of key IBM product portfolios, namely high-end servers, blades, and IBM’s Express portfolio.

The accelerators were in place last year, noted Timms, but their applicability was more selective. Now they will be available on all products within those categories.

“It’s simple for partners to understand. They don’t have to check to see if they’re getting paid for selling this Express product and not the other,” said Timms. “We decided, let’s just make it simple.”

Bonuses will be paid to partners that bring new customers to IBM, whether it’s going into competitive accounts and getting more business or attracting true whitespace clients. New customers are defined as those that have done less than $10,000 in business with IBM over the last 12 months.

A number of changes have also been made to IBM’s Partner Rewards program, which provides marketing funds and education vouchers to partners. Timms said the tiered structure has been eliminated so all partners will get the same, higher benefits. As well, for the entry-level partners that do les than $100,000 in business with IBM and weren’t eligible before, the same advantages will be available at a slightly lower level. As well, test vouchers will be available for partners to cover the cost of certification tests necessary for IBM partner program eligibility.

The bottom line of all the changes around incentives, said Timms, is that more money will be paid out by IBM to its partners this year.

“We’ve had a couple of sessions with our partners to roll-out the program and we’ve gotten tremendous feedback on it,” said Timms. “They’re very pleased incentives have been dramatically simplified and that they now have a clear understanding of what they’re going to make, and from dollar one.”