IBM is to stop paying its direct sales staff commission on all but the largest accounts globally unless they work with the channel, CRN can reveal.
Big Blue assembled its top UK hardware partners at the Tate Modern yesterday to inform them of the changes, which it reckons will free up $6bn (£4bn) worth of opportunities to its partners globally.
In the UK, IBM will continue to work directly with just 23 to 27 accounts, Stephen Leonard, general manager global markets for IBM's Systems and Technology Group, is understood to have told the 50 or so assembled partners.
He also reiterated IBM's commitment to its System X business, despite recent rumours that Big Blue was looking to offload the division to Lenovo.
While IBM will not force all other UK customers to buy direct, its sales staff will no longer bag any commission unless they work with resellers on these accounts. A programme that will see dedicated sales and technical headcount sell with each partner is also being launched.
The handover should slash IBM's cost of sale at a time when the vendor juggernaut is looking to reduce its wage bill.
IBM could not be reached for comment but earlier this week its UK channel boss Richard Potts hinted at changes that would give partners more laser-focused account and technical management.
Rob Tomlin, business unit director at IBM distributor Azlan/ISI, hailed the change as "a real positive" for partners, claiming the new internal commission structure would provide an incentive for resellers to work with IBM.
"IBM's view is that the cost of direct sellers servicing those customers is far higher than if the channel does it," Tomlin said. "IBM also believes that partners are more effective because they can bring together an ecosystem of products IBM could not do itself."
Steve Ellis, managing director of IBM partner APSU, said: "Anthing IBM does that potentially puts more business through the channel is good news for all of us."
Mark Starkey, UK managing director at IBM partner Logicalis, also hailed the move, saying it amounts to IBM "increasing engagement with the channel".
Kevin Drew, managing director of IBM partner DU360, called it "absolutely fantastic news".
"IBM's strategy to this point has squeezed the channel," he said. "A lot of its salesforce has been in direct competition with the channel. This takes all that away in one fell swoop. This will allow partners to invest heavily."
Although the commission changes apply only to STG, CRN understands IBM is also introducing a more regional management structure in the UK that will apply to its entire business, including its software arm.
IBM has since told us it is not ready to comment further but issue us with the following statement:
IBM is taking steps to strengthen its Business Partner channel through an increased commitment to develop specialty solutions skills, providing access to more IBM technical resources, and aligning to higher value, higher growth business opportunities for Business Partners.
For Business Partners looking to engage in higher value solutions, IBM will provide cross-brand and brand specific channel resources to engage with these Business Partners, drive strategic actions, ensure comprehensive technical assistance, develop skills, and support sales transactions. IBM will rely on the expertise of its Distributors to provide broad coverage, enablement and support of Business Partners doing business as a reseller.
This shift is a continuation of IBM's transformational strategy to drive growth and greater Business Partner satisfaction by delivering greater technical support, competitive margins, quality leads, increased demand generation, and drive continued simplification for our Partners.
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