Mid market key to IBM's future, chief executive claims

In first keynote since 2004, Sam Palmisano said mid-market was a major driver for Big Blue going forward

The mid-market could become the biggest part of IBM’s business under current growth rates, according to chief executive, Sam Palmisano.

In his keynote speech at IBM’s PartnerWorld event in St Louis, Palmisano, who was speaking at the conference for the first time since 2004, cited IBM’s shift to focus on the mid-market as a key driver for the vendor. “Partners have been key for our SME business, half of the business we do in SME goes through partners,” he said. “If this growth rate keeps up it will be the biggest part of the IBM business.

“IBM’s success is tied to our partners success, so we couldn’t be successful without you,” he told the 5,000 or so delegates. “For us it all came together financially last year and we have seen shifts in our market.”

He said IBM’s revenue splits were now much more balanced and stable, with 37 per cent coming from services, 23 per cent coming from systems and financing and 40 per cent coming from software.

Palmisano talked about the shifting markets, saying the model of computing had changed. “The PC model is over, it has run its course. Customers want technology embedded in their business now.” He said customers were looking for open flexible systems and he cited Service Orientated Architecture, virtualisation and convergence of software and services as examples of how technology has moved forward.

He also talked up the idea of the globally integrated enterprise. “Globalisation is undeniable,” he said. “And to compete in that world you have to be a globally integrated enterprise; this is all about collaboration, which in turn creates economic value, for us and our partners.”

Andrew Griffiths, business development manager at IBM VAR Q Associates, said Palmisano had been laying down a good solid strategy in the keynote. “He [Palmisano] wasn’t as evangelical as in previous years, but it was a carefully considered and thoughtful strategy, rather than something completely new. IBM’s SME focus came through loud and clear as well as the potential growth rates available in that sector, which is good news for us.”