Apart from being famed as one of the crime and murder capitals of the US, St Louis is the Gateway to the West; it is where two world famous rivers – the Mississippi and the Missouri meet.
It was against this backdrop that IBM chose for its PartnerWorld 2007 conference.
Moving the event from Las Vegas was a risk, but the coming together of the two great rivers was appropriate and fitting for IBM’s message of collaboration at this year’s conference.
Big Blue unveiled a raft of channel initiatives aimed at bringing partners, ISVs and integrators to work together, especially in the mid-market.
The first of these concerned Value Net Connections – known in the UK as PowerNet. Value Net – a scheme aimed at VARs looking to pair up – was launched several years ago. However, Value Net Connections brings together all of the tools and resources under the Value Net brand, including the matchmaking tools and marketing, and scales it up.
Ravi Marwaha, general manager, IBM Global Business Partners, who interestingly gave the opening keynote – leaving chief executive Sam Palmisano to do his on the second day – said: “Together we are an ecosystem, we are greater than the sum of our parts. I can assure you of IBM’s commitment to our shared success. As people turn more and more to solutions that are end to end, in many cases you will find resellers will need to work with ISVs and integrators. So we wanted to make our current Value Net offering more scalable. Now we know that it works, we want to do it in a big way.”
Andrew Griffiths, business development manager at IBM VAR Q Associates, said: “Partnership between partners is difficult because we all make our margin in a similar area and if you try and partner with another player, everyone wants to deliver the value part of the deal to get the margin.
“Value Net pairs Business Partners with ISVs and this works well for us because we focus on the deployment value that we can bring the ISV. Where it works less well is where the focus is on the go-to-market strategy. ISVs tend to be very independent so sometimes don’t like to jointly go to market.”
Ian Cook, chief executive of Logicalis, said: “For a long time this kind of pairing has been going on in the networking world. This is no different, but channel players have to realise that it can be a case of partner in the morning and compete in the afternoon, so firms have to be grown up about it.”
To help enable partnering, IBM unveiled Lotus Connections for Partners. Big Blue first released the social networking platform for business at its Lotusphere conference earlier this year, but has now launched the system to partners.
Jeff Schick, vice-president social computing software at IBM, said: “Lotus Connections is the first social platform for business. All partners will be able to connect, have profiles and collaborate across the platform. There will be blogs, real-time communications and file sharing too. We’re connecting people to people and users to information.”
Palmisano added: “Social networking at the end of the day will be about businesses dipping their toe in. Where we are at right now is similar to the early days of the internet.”
However, partners were sceptical about the move. John Lindley, director of the Portal Partnership, said: “I’m not sure how this will go down until Lotus release 8 comes out. The market is just waiting for this so it will be clearer after the release.”
Cook added: “This would be useful for a certain size of partner, but many companies in the channel would much rather just pick the phone up and have a face-to-face meeting with someone rather than contact them over the internet or a networking site, especially if a business partnership was involved.”
IBM also updated its Express Advantage programme, plunging $200m into expanding the scheme on a worldwide basis, after its initial US pilot last year. Express Advantage is the vendor’s way of targeting the SME sector, with specific products, marketing and programmes. A campaign is due to launch imminently in the UK that will help drive leads and raise awareness, according to Steve Solazzo, general manager, global mid-market business at IBM.
“The emphasis on SME within IBM is dramatic,” he said. “Everyone is talking about it. These campaigns will be very localised; local press and local events. We are conducting them under the tag line ‘Simple’ because we want people to understand we are easy to do business with.”
Under the programme IBM unveiled two new servers – which it claimed would sell for $8,000 – a new storage tape drive and new software.
Griffiths said: “This is great because it brings the benefits of the Express programme to outside of just hardware, encompassing services and software too.
“The new Express Advantage campaign is a good idea, but I am not a big believer in vendors generating leads. I would rather move the money into the sales cycles so that we could do our own lead generation.
“The new entry level products IBM has launched will help us to have proper business and technology conversations with end-users.”
Cook said: “Logicalis will push towards a $1bn revenues this year and we are not going to do that selling $8,000 servers. We will take them into our portfolio as a door opener.”
Lindley added: “The Express Advantage will be good for the newer partners and firms not yet inculcated into the ways of IBM. It will help the older partners, just not as much.
“The server and storage announcements are really good offerings, easy to position and sell. We have seen some Express offerings rolled out, but it would be good to get clarity on what is out there and how it all fits together. It has got better, but it is still somewhat confusing.”
However, Lindley was very positive about a software announcement the vendor has been touting – greater rebates under its Software Value Incentive (SVI) programme.
“This is a fantastic incentive,” he said. “It is the best incentive programme in the software channel in 15 years. It gives proper money as opposed to points to redeem. It should drive business and give better rebates.
“We can get 20 point margin on SVI so this should drive incremental business for IBM and because of the extra margin it does incentivise us to sell a bit harder.”
Paddy Lawton, managing director of IBM ISV Digital Union, said the SVI incentives would give additional benefits to sales people.
“This means that ISVs can incentivise their sales people and still make margin on a deal,” he said. “It is also rebates over and above the already good margin that SVI offers. It is good because it lets firms properly partner together and allows them to expand into new markets. This is the first time that IBM has produced a model that really compensates the partners for selling IBM software.”
Partners also welcomed the news that IBM has reorganised its Global Services (IGS) units and condensed the offerings available for partners to sell.
Griffiths at Q Associates, said: “There has been a massive change inside IBM in the past 18 months. Global Services is always an old bug bear for partners, but with the Service Product Lines – where IBM took 5,000 services offerings and packed them as 10 – it is much easier for us to sell.
“IBM’s idea of productising their services portfolio has really helped us. The top of our wish list used to be how we could package up services in the right way for the sales managers – so it was like buying a boxed product.
“The challenge is that every partner has different services capability, so there is bound to be some overlap with IBM’s own services. Partners will sell what they sell and then get what they can’t from IBM.”
Cook said: “We are already actively engaged in Service Product Lines. It can be very niche, but it’s a good way of jointly working with IBM. We still do come up against IGS occasionally, but it’s not something we are up in arms about. They don’t operate in the SME space, just the enterprise.
“We are moving to a move collaborative approach backed up by the Service Product Lines. This has been a bit frustrating for us, as we spent time and money building our own services in house and now anyone can do it. But we’re not concerned because Service Product Lines is for the low end, which isn’t our business model.”
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