Bending and twisting like the Cirque du Soleil circus troupe, to which IBM has just pledged its sponsorship, Big Blue is contorting itself to fit into the low end.
At the vendor's PartnerWorld conference in New Orleans Mike Borman, IBM general manager of global business partners, said the firm was willing to "bend over backwards" to make its partner relationships stronger.
He likened IT to football and said if IBM was a single player, it wouldn't achieve very good results.
"Partners are the rest of our team. $3bn (£1.9bn) is spent on IT every week and we need our team to work together for this huge opportunity," he said.
Borman said IBM has two main priorities: its 'on-demand' computing strategy and the mid-market. He admitted that market conditions are tough, adding that he had "never seen anything like it in 25 years in the business".
But he told the 3,000 or so attendees at the conference that more than a third of IBM's revenue, or $25bn, came from business partners, and he was looking to beat that this year.
Last year IBM pledged $10bn to getting its on-demand strategy off the ground, and the vendor is hoping the campaign will encourage end-users to purchase IT in much the same way as they would buy electricity.
"On-demand is giving your customers the ability to respond to their customers' demand, fast," said Borman.
To encourage its resellers into the on-demand market, which is still at an embryonic stage, IBM announced just before the conference that it was injecting $500m into the channel under its SME Advantage programme.
The money would be directed towards resellers that targeted the lucrative mid-market space.
At the conference Borman said the funds would go to partner support, sales, marketing and training. Resellers will get a single point of contact for IBM.
There will be a single point of entry into the partner website, an IBM newsletter detailing IBM's strategic direction, and a partner charter to "define how we go to market, our commitment and consistency", Borman said.
Resellers at the conference welcomed both the cash injection, of which Borman said roughly $25m would go into the UK channel, and the on-demand strategy.
Kevin Drew, managing director of VAR Triangle, said he believed the money will benefit resellers, as long as there is some structure to the way it is shared out.
"IBM must make sure partners focus and specialise, otherwise everyone will be hitting the same parts of the market," he said.
Other resellers were worried that IBM was encouraging all its resellers to go for the same market and offering them increased rebates for doing so.
However, Borman responded by telling vnunet.com's sister publication CRN that he "would love" the SME market to be overcrowded with IBM VARs.
"IBM's market share in the SME space isn't very big," he said. "It's a tough market to hit. These guys have to work harder to get the smaller deals in.
"They have to make an investment to do that. So IBM is giving them money to help them target this market."
Tony Stirrup, managing director at distributor Magirus, the only UK-based distributor to attend the conference, said the SME investment from IBM was key.
However, he added: "The SME market is huge. Just because of its sheer size it needs to be mapped out. A 'market-map' needs to be done."
He pointed out that the SME sector's biggest problem is affordable coverage.
"How do you give face-to-face, high-quality service for so many companies at a lower cost? The trick is finding a cost- effective way of selling the full services sale, but how do you do this to 500 SMEs?" he said.
Stirrup added that the number of firms that IBM had created under its Teaming and ValueNet initiatives, part of the SME Advantage programme, had gone some way to solving this problem.
"If you have a cascade of partners all talking to one and other and concentrating on different verticals or technologies, this helps to maintain the quality and reach," he said.
He also pointed out that it would not be easy for Big Blue to apply its on-demand concept to the SME market. "It's a very broad concept about customers getting what they want when they want it," he said.
"But how do you translate that into a service that a reseller can take to the SME market? On demand is a simple concept, but getting it to market could present a challenge."
Drew also welcomed IBM's on demand strategy. He said it had two aspects: first, the technical one being based on a utility pay-for-what-you-use model; and second, that it offers the ability to help customers connect and link their entire businesses.
"I'm delighted with IBM's general direction, but the devil will be in the detail. I am waiting for all the i's to be dotted and the t's to be crossed," he said.
Paddy Lawton, managing director of independent software vendor Digital Union, which won both the Software Partner of the Year and Beacon Award for best WebSphere solution awards at the conference, said the on-demand model presented IBM with a new way into the SME market.
"On-demand isn't a product, it's a strategy. Its about being on demand for your customers and your customers' needs and being able to grow with them," he said.
Lawton likened on-demand to the ASP model. "The ASP model wasn't sustainable a few years ago. The market is ready now and applications are more mature," he said.
James Governor, principal analyst at analyst firm RedMonk, agreed. "The economy is very different now. The market was not ready for ASP then," he said.
"People now don't have time to do IT themselves. The mid-market especially is terrified of investing in infrastructure, even though these companies need it.
"It's about delivery of applications, which for some areas of business should definitely be hosted. With this on-demand model there is no upfront cost, which is very appealing when you have no money."
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