IBM reveals fears over behind-the-times VARs

Big Blue worries resellers failing to adapt could subject it to losses and slow its production line

IBM has warned that if its resellers and distributors fail to move with the times, its own finances could be thrown into disarray and the number of products it launches could dwindle.

In a 10-K document filed earlier this week, Big Blue detailed a variety of factors posing a risk to the firm, including growing concerns about surveillance and privacy, currency fluctuations and ongoing legal disputes.

Among the risk factors were concerns about how heavily it relies on its channel.

"The company offers its products directly and through a variety of third-party distributors and resellers," it said in the filing. "Changes in the business condition (financial or otherwise) of these distributors and resellers could subject the company to losses and affect its ability to bring its products to market."

Earlier this week, Big Blue unveiled its plans to invest $40m (£26m) in growth hotspots such as cloud, big data and security. The announcement comes after it said last week that it would invest $1bn in software-defined storage.

In the 10-K, it said there could be trouble if lollygagging resellers fail to keep up to date with its new tech.

"As the company moves into new areas, distributors and resellers may be unable to keep up with changes in technology and offerings, and the company may be unable to recruit and enable appropriate partners to achieve growth objectives," it said.

"In addition, the failure of third-party distributors and resellers to comply with all applicable laws and regulations may prevent the company from working with them and could subject the company to losses and affect its ability to bring products to market."

Since the National Security Agency (NSA) spying scandal broke in the summer of 2013, technology companies have been keen to take measures to assure customers of the privacy of their personal data.

IBM said cybersecurity and privacy considerations are so important, it could invest to mitigate any risk.

"In the current environment there are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance, and human or technological error," IBM said.

"Computer hackers and others routinely attempt to breach the security of technology products, services, and systems, and those of customers, third-party contractors and vendors.

"The cost and operational consequences of responding to breaches and implementing remediation measures could be significant. As these threats develop and grow, the company may also find it necessary to make significant further investments to protect data and infrastructure."