IBM gets personal
Big Blue is working on its partner relationships, emphasising that it wants to work with them, not against them, writes James Governor.
It's not software. It's not hardware. It's not billion-dollar investments. It's not financing capabilities. What will make IBM succeed in the channel is its attitude.
At the company's PartnerWorld conference in Las Vegas, it made a slew of announcements aimed at delivering growth in the channel. It is putting in place coherent strategies to attract ISVs, VARs and systems integrators.
But it is culture, not formal strategy, which drives success. IBM's goal is simple: to beat Microsoft and Oracle by chasing them in channel-led sales, which is an area they consider their own back yards.
Most ISVs targeting SMEs have been aligned with either Microsoft, because of ease of development, or Oracle, because it remains the market-leading relational database. IBM is playing catch-up, which makes it hungry.
Perhaps the most potent argument at IBM's disposal is that, unlike Microsoft and Oracle, it does not sell packaged business applications. This narrative certainly helps in the attitude stakes.
I have spoken to many ISVs over the past 12 months that are justifiably worried about the entry of Microsoft and Oracle into the apps business.
Well, wouldn't you be? Microsoft has proved itself to be the master of entering a new market, sometimes through a small acquisition, and then building on that beachhead. We tend to forget, for example, that RealNetworks used to be a Microsoft partner.
To be fair to Microsoft, it creates plenty of opportunities for services-led partners and those that are willing to OEM its products. Most of its revenues are partner-led, but ISVs are nervous.
Recent evidence shows a powerful force at work, actively underlining IBM's 'we won't compete with you' message. IBM is showing a genuine commitment and interest in the success of smaller ISVs.
In an age of emails, spam and unreturned telephone calls, personal contact is an all-important element in fostering close partnerships.
When a small Irish ISV is getting personal attention from some of IBM's heaviest-hitting vice presidents, you know something is up. FrontLine Consultancy is a service management software player that was one of the first ISVs in Europe to sign up to IBM's ISV Advantage Program.
The company's platform is called Kudos, and it is set to compete with Microsoft CRM. It is not really surprising that IBM executives are excited about this opportunity to help build an SME-focused service management solution that runs on Linux and IBM middleware.
What is surprising is that an IBM vice president, based at IBM's headquarters in Armonk, New York, has a personal relationship with FrontLine's founder. Small firms are exactly the kind of company IBM needs to attract to compete with firms in the mid-market.
If this were an isolated incident it wouldn't indicate much. But RedMonk is talking to an increasing number of small ISVs reporting similar experiences.
This is not to say all potential IBM channel partners can expect an IBM vice president as a sponsor. Even IBM, with its high staffing levels, couldn't scale that model.
But staffing is where the rubber meets the road. IBM is determined to compete on the basis of an engagement model. Its high-touch approach is not aimed just at direct sales to enterprise customers, where IBM can offer a level of hand-holding and advice that others can't, and won't, match.
IBM is also building high touch into its channel operations. IBM's rivals always complain about Big Blue 'blackening the skies with parachutes' as consultants do project work at clients. Now IBM is parachuting resources into the channel too.
Of course there is a major downside to having so many people on the ground. It can make VARs and ISVs nervous that IBM will cherry-pick the best opportunities for itself. But, of course, this kind of behaviour is far less likely when there are personal relationships involved.
Channel programmes only go so far; it is people that make successful business relationships. One of the biggest complaints I hear from ISVs and VARs is that their contact at an OEM has changed jobs again, and now they have a new account holder.
This happens every nine months or so, when the vendor goes through yet another reorganisation, which is not the way to grow a business together.
James Governor is principal analyst at RedMonk
www.red-monk.com