Controlled distribution delay to hit IBM partner margins

Three-month postponement could deprive Big Blue partners of chance to make more money during peak season

Lindley: We would have liked the opportunity to bring in extra margin in the fourth quarter

IBM partners that have already skilled up for Big Blue’s move to controlled software distribution have branded the three-month delay as “frustrating”.

Originally set to be introduced on 1 October, the new model was hailed as a potential shot in the arm for partner margins.

But the deadline has been pushed back to January to give partners more time to make the necessary investments. IBM was also conscious of causing disruption in the fourth quarter, which is the busiest period for its software business.

IBM partner Portal Partnership has already achieved six of the 13 certifications required to retain access to the IBM titles it offers.

Business development director John Lindley said the delay is “disappointing”.

“The whole move to controlled distribution is designed to help more margin stick in the channel,” he said.

“We would have liked the opportunity to bring in extra margin in the fourth quarter as that is when we do about 50 per cent of our IBM software revenue.”

The delay also means partners that have dragged their feet will be let off the hook, Lindley claimed.

“If partners have been a bit slow it is disappointing for those like us that have made the effort to get ahead," he said. "But we do understand why IBM wants to protect its Q4 pipeline.”

Kevin Drew, director at IBM partner DU360, said the delay did not come as a surprise.

“It was always likely to be postponed because it would have confused Q4 selling,” he said. “It makes more sense to take it to the start of a new fiscal year, given that it is such a significant change.”