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PartnerWorld report: SMB push goes on

IBM tells partners it will help them resell more of its services, offers incentives to ISVs and creates a way to trim prices on servers and storagern



LAS VEGAS — In a move one executive likened to holding out an olive branch to its VARs, IBM is greatly expanding the offerings of its Global Services division for partners to resell to small and mid-size clients.

“”This is the IBM extreme make-over,”” James Corgel, vice-president of business lines

and strategy for IBM Global Services (IGS) Americas, said at last month’s annual PartnerWorld conference here.

The goal is to make clients view the company and its partners as a powerful set of teams to drive their profitability and growth, he said.

IBM has been transferring its emphasis on deriving revenue from selling hardware to selling services through IGS and its Business Consulting divisions for several years. At the same time it’s encouraging its partners to up their services revenue. Generally, IGS has been focused on the lucrative enterprise market.

However, the company realizes that the SMB market will grow faster than that segment. So it’s turning to resellers to help get a big slice of outsourced services it believes SMBs will want.

Managed services

All of the offerings will be branded under the umbrella of IBM Express Managed Services. The first will be an e-mail remote managed service.

Also to be made available will be a preconfigured version of SAP’s All In One enterprise resource management application, a solution aimed at mid-sized companies.

Corgel also said that there will be a program to encourage collaboration with regional systems integrators to deliver services.

Through local teaming these integrators will have access to IBM’s sales force, and benefit from its marketing and lead generation, the company said. There will also be sales agent training programs for resellers to learn how to sell IGS hosting and strategic outsourcing services to SMBs.

Corgel said IBM is spending US$300 million to set up these programs, including training and marketing efforts.

Noting that IBM is closing a US$182 million purchase of Corio Inc., a company that hosts application services for solutions from SAP, Siebel and Oracle, Corgel said the company is “”moving quickly to an asset-based, rapidly developed, inexpensively delivered, brand-new model of service delivery.””

Work with resellers

IGS will work with partners to develop the services it believes they can sell, he added.

There were no details on pricing or when services will be available to partners in Canada.

Gartner analyst Michael Haines said in an interview that the challenge for IBM will be to assess with partners where their services complement those offered by partners, and where they conflict.

Right now, he added, about five per cent of IGS’s revenues are partner-related, and it won’t rise by much. However, he said, even a doubling of that will be a big increase to IBM’s bottom line.

A key will be choice. “”If IBM has enough of a menu of services for partners to choose from then most of them should find something to pick,”” he said.

Also announced at the conference by Donn Atkins, IBM’s global general manager of partners, were more resources and programs pushing VARs and ISVs to increase sales to small and medium businesses. These include:

• SystemSeller, a new package of servers and storage so partners can get “”competitive everyday pricing”” on single units of hardware faster than before.

Initially the program will cover iSeries, xSeries and pSeries servers, as well as BladeCentre and TotalStorage products. Later this year it will include financing and services and software;

• Express Portfolio development initiative, a new technical framework to help ISVs and solution providers create and manage products for mid-size businesses. Express is a line of IBM middleware tailored for easier deployment for small and middle-sized companies;

• A Built On Express logo and marketing initiative to emphasize applications created on the Express platform. Under this program integrators and ISVs will have access to technical support online from IBM;

• Dedication of sales specialists to help regional VARs and ISVs to sell to vertical industries and geographies. IBM staff will help these partners generate sales leads and close opportunities;

• Creation of Industry Insights within the existing SMB Advantage program. IBM staff will pass on market initiatives, customer challenges and sales opportunities for seven industries, including banking, wholesale distribution, automotive, retail, health-care and fabrication and assembly;

• Expansion of its Industry Networks program for ISVs to now include fabrication and assembly, media and entertainment, wholesale distribution and education and learning sectors.

Atkins also challenged resellers to sell US$2 billion worth of Linux-related business, double the goal he gave them last year. They beat that target, he added, by US$120 million.

Finally, in reference to the sale of the personal computing division to Lenovo, Atkins said PCs are still a critical part of IBM’s offerings. That’s why Lenovo sales will still be credited to partners.