Continuing CRN's interview with Donn Atkins. Click here for part one of this interview.
How big is the SME sector opportunity?
It's where the vast majority of the growth is in our industry. One of the reasons we are so aggressively focused is that it's a place where we see the opportunity to gain market share and it's where customer spending and new customer acquisition is at its highest levels.
So we're trying to facilitate as much focus there as possible. We have pretty good success with established enterprise customers. It's an important space that we'll continue to support. It's all about growth, and it's all about getting new name customers.
So in terms of the corporate space are you going to be helping partners hit this sector next year when the growth is back up?
I think it's something that we'll continue to work closely with our partners on. There are situations with established accounts where partners have great relationships, and it makes all the sense in the world to take advantage of that relationship and that set of capabilities.
We touched on distribution a little earlier, but just to go back to that, do you believe in distribution?
I believe in having a channel strategy that reflects what my customers want. And I believe that there are groups of customers that prefer a value-add approach, and there are also customers and partners that value distribution capability.
I think that to be successful you have to have a presence that reflects what the marketplace demands. My key focus is to not have those two approaches in competition. Where our customer prefers value I want to make sure that those partners can gain credit for their investments.
There are many customers out there that do not require the level of support or value that others do. Our industry and our product mix is really at a level where we need to be responsive to all customers.
What measures do you have in place to ensure you are not over-distributed?
It involves understanding the opportunity and the capacity of your current partner and a close working relationship that means you don't have lots of conflict out there. But again, there are always opportunities.
If you look at current partners and where they have their presence and focus, some of these new partners we've been able to attract to IBM were really focusing on different customers. Their focus in the past has been distributed competitive products to customers that have not been buying IBM.
It is very complementary to our coverage strategy to get more IBM products in the marketplace. I would suggest that the success of this strategy even helps our existing partners, because it helps the IBM presence in the market to be broader. So in the end we see it as having positive impact for all.
I am only interested in signing new partners that have a market opportunity or a niche that we are currently not covering. I'm not interested in a quantity strategy that would have me place partners in competition with each other unnecessarily.
Keeping the level of trust and confidence with our partners, and them knowing our dependence on partners, is a big part of my message.
How do you think distribution can add value?
I'm finding that our distribution partners are able to facilitate the delivery of product and to provide the kind of capabilities that individual first-tier partners have, or desire to have on their own.
Our distributions partners also provide a level of technical support. And finally our distie partners facilitate this whole ecosystem. Enabling the interaction of partners, helping identify ISVs, forming relationship with solution providers. I think there is room for all approaches.
How is your ISV programme going?
Very well. Every day and every week we see new partners joining the ISV programme. At PartnerWorld we announced the ISV Industry Value Networks. It's allowed us to have a framework to attach this activity around this whole industry solution perspective, which has great traction in the market.
It gives us a great framework to have the dialogue with a prospective ISV partner, and then once we reach an agreement, it gives us a framework to connect this activity to our sales teams and other partners. This complements very naturally our customer solution focus.
I think there is more power in being part of this overall solution approach than being part of an individual component.
Last year at PartnerWorld you announced that you were giving so many millions of dollars to partners. Have they started seeing any of this yet?
Our management system is really tightly interlocked. It starts with these investment decisions in new areas. It's really a closed loop management system that tracks on a monthly and quarterly basis against a set of milestones that is tied to those investments, that looks with a lot of specificity, whether it be a specific number of ISVs or a set of partner enablement capabilities.
Many of those investments went around training. We track the number of certifications that we have been able to deliver to partners, we track the number of marketing events, we track partners' productivity. We really ensure that those investments are being delivered and that we are getting the type of return that we expect as a result of them.
There is very active dialogue in all parts of the company around how we're using partners. I promote the partner channel, but equally my colleagues are placing requirements on me. It's not just me pushing partners, it's the rest of the company pulling partners.
Is this is a new thing?
It's been growing for a number of years. I think it's a very positive statement from a partner perspective that our entire company has understood the power and the value of connecting tightly with our partners, and it is part of our everyday management capabilities.
What else can we expect this year at PartnerWorld?
A continued focus on how our total IBM company capability fits together to provide a total solution. We'll feature best practices of partners and how they have utilised our technology, and updates from the leaders of our business.
We've taken the feedback of what has worked well and has been the most appreciated, and we'll continue to build on that. We have the education tracks and a chance to network, and of course the ecosystem.
How are you helping partners to sell Express?
Our partnering activity is not limited to the focus on the Express products. The Express products target a set of customers that have a requirement for a solution that is easier to install, maintain and use, but we have every bit as much activity going on with the breadth of our product line, across out portfolio.
We have partners that are specialists in our storage technologies, for example, that will provide a complementary story and systems management solution to complement a server strategy or a particular software technology.
But with Express how do you make something that was previously high-end, a low-end product without just taking away all the functionality?
Well, because we have really built the products from the ground up. It's not a version of a product where we have taken out function. We used the architectures to build this Express capability with all the functionality, but with less complexity.
Clearly some of the capabilities, from a scale and growth perspective, would require the full product, but our design on Express is not to take away function, but to have a more condensed form of delivery.
The kind of value delivered from WebSphere in a large enterprise is equally attractive to enterprises of all sizes, especially as more and more companies collaborate with each other and prove the need to have business-to-business interaction.
IBM changed its focus last year in the software unit from product sets to verticals. How is this going, and will you be implementing this in your hardware units, too?
We decided to focus on two things: combinations of software into these solution packages, and individual solution packages by industry. We announced some 62 industry vertical packages that combine in areas such as branch banking and provisioning in a telecoms space.
If you think about this approach, this says that inside a particular industry there needs to be an integrated technology solution. We are working closely between our hardware and software businesses to ensure there is a solution that takes advantage and integrates server and storage capability with these solutions.
One of the advantages of all IBM solutions, whether hardware or software, is that they are all very open. It's open architecture based on industry standards, allowing customers to integrate all the investments they have made.
Hardware will be slightly different because with software we integrated parts of the middleware into a specific industry solution area. All of those solutions require servers and storage, and every one of those is already constructed to run on top of IBM technology. We are aligning our focus inside the hardware division to make sure there is a tight connection inside the different solution areas.
And finally, what does the future hold for IBM's channel?
I think it's a bright future for IBM's partners because they're so integrated into IBM's overall strategy. And I believe that our strategy is resonating well with our customers.
So if you believe that the overall IBM strategy has good acceptance, then it's a natural connection that our partners will share in the success. Their success will help drive IBM's success.
Click here for part one of this interview.
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