IBM CEO says direct clients have fallen from 5,000 to 400 in two years

Arvind Krishna calls for partners' help in winning new customers

The number of clients IBM serves directly has fallen from around 5,000 to 400 in the space of two years, its CEO Arvind Krishna said yesterday at CRN parent The Channel Company's 2022 Xchange Best of Breed (BoB) conference in Atlanta.

While on stage, Krishna discussed his company's investment in partners, the integration of subsidiary Red Hat, encouraged partners to raise their prices given the inflationary economic environment and even weighed in on chipmaker Broadcom‘s pending acquisition of cloud vendor VMware. Read the full story on CRN US here.

Under Arvind Krishna's watch, IBM has decreased the number of direct customers from about 5,000 in 2020 to about 400, Krishna said.

Big Blue is growing above the four per cent standard market growth rate (with Q1 and Q2 2022 revenues growing eight and nine per cent, respectively), with the bulk of that coming from "the long tail".

"I want to increase the number of clients, also, not just wallet share," Krishna said. "That means that we need your help. We are not going to go there directly at all."

Krishan claimed that labour inflation, skills shortages and changing demographics (the US population is no longer increasing) spells opportunity for IBM and its partners.

Technology needs to give everyone "10-20 per cent additional productivity", he said.

During his talk, Krishna encouraged partners to explore more opportunities in IBM's artificial intelligence operations (AIOps) offerings, including Turbonomic, Watson AIOps and Instana.

Customers will continue to spend on automation tools, he said.

"The ability to go into an enterprise and tell them, ‘Look, we can do things a lot more automated. We can take some cost out. We can do monitoring, and eventually go closed loop on AI' - which I don‘t think is happening yet," Krishna said. "I think is a massive opportunity given the current labour market."