IBM's storage arm claims it no longer has a reputation of being a boring, "old man" company.
"IBM Storage in particular has shed the model of we're the old man storage company," said Eric Herzog, VP of IBM Storage Systems, said in an interview. "We're not the old storage guys. We may be the big storage company but the big storage company doing new and innovative things quickly, and partners love that too because partners want to be on the leading edge."
Herzog said that with IBM Storage having a reach in cloud and cognitive for storage technology, the vendor appeals to solution providers since it becomes harder for them to make money off such offerings once they're commoditised.
"[If] they get in the door early… they can farm the account for a long time, [and] they make more money upfront because it's a more sophisticated solution versus when it becomes commoditised," he said.
The executive also pointed to all-flash storage and software-defined storage, saying these currently have higher margins than when they are eventually commoditised. Having these technologies in its portfolio allows partners to do "the cool stuff", Herzog said.
He noted executives on the IBM Storage team have experience with multiple start-ups, with Herzog, for example, having participated in seven.
"[Partners are] not doing the old, traditional, boring storage stuff, which has been what people thought about us. Over the last year-and-a-half it's changed to, ‘Those guys are doing a lot of cool storage stuff, and they're not a start-up; they're acting like a start-up," he said.
"Partners can get in the door easier when they're doing the innovative stuff than when they're doing the old, boring stuff. They can also make more money than when they're doing the boring stuff because the boring stuff is a price war, and they know that.
"We have boring stuff too, but we lead with the cool stuff. That's what they want, and that's how [partners] get in the door. They can sell the cool stuff to lead in, and then they sell all the other stuff too. It gives them a good margin play and a good revenue play."
Herzog said IBM Storage's channel is seeing many of its resellers evolve into cloud services providers (CSPs) and MSPs. He said channel partners are getting into the service business by using IBM software, noting IBM has 300 CSPs and MSPs using IBM Spectrum Protect to offer Backup as a Service.
Further, IBM is depending more on its channel, Herzog claimed, saying 75 percent of IBM Storage's global revenue goes through the channel.
"It's a co-sell model, so the IBM sales teams work with the partners," he said.
"If you go back 30 years, that was not the case. It was much more of a direct model, and partners weren't embraced. In the last 12, 15 years the company's gotten very channel. For storage in particular…the storage division and the systems part of the business at IBM is probably the most channel-oriented of the company."
Edward Walsh, GM of storage and software-defined infrastructure at IBM, added members of IBM's sales teams get paid the same no matter if their sale goes through the channel or directly. The executive said this is more beneficial for partners than having IBM sales members make more commission for direct sales.
"Some companies have that. That sets the partner up as somewhat of an adversary, and [vendor sales teams] not looking at [partners] as an extension of the sales team," Walsh said.
In addition, 30 percent of IBM's sales team must make all sales through the channel, he said.
Herzog said that for its direct sales team, as well as its channel, IBM is pushing conversations that focus more on driving business solutions, such as saving money, rather than products.
Walsh added that while this is helping IBM's storage business grow, it's also a challenge for resellers.
"It's complex. How do we help clients…to use cloud and cognitive [or] how to use analytics to change their business? That's not what a lot of VARs grew up doing. They do solutions, and here's the next evolution of technology - it's how to engage on that business side."
Herzog pointed out IBM offers partners training videos on how to talk to different C-level executives. He said the videos encourage partners to talk about things beyond technical value: "I have never met a CIO who was a storage guy ever". Big Blue also encourages driving the point with references to successful IBM projects previously deployed.
"The longer you can talk and engage without talking product the better you're off," Walsh said.
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