The idea that the Cloud is disintermediating channel partners was clearly debunked at IBM’s 2012 PartnerWorld Leadership Conference held this week in New Orleans, LA. In her opening keynote this morning, IBM CEO Ginni Rometty noted that 80 percent of IBM’s partners will have done something with the Cloud by mid-year 2012.
One of the most interesting announcements at the conference was a set of new financial incentives (IBM Solution Accelerator) – referred by some as the “blue on blue partner program.” The financial incentives encourages channel partners to bundle IBM hardware and services assets with increasingly software-driven deals – components that otherwise might go to competitors. While IBM is no doubt also optimizing its hardware and software assets to provide a higher value-add than can be delivered via a separate component-focused approach – clearly, the new incentives will help pull through additional hardware and services revenue, potentially in a significant way.
More broadly, this initiative is yet another example of IBM transitioning to selling bundled solutions, and emphasizing the IBM brand over the mix of traditional sub-brands that it maintains – two key initiatives that Saugatuck strongly supports. For example, within Software Group alone, there are nine significant business units, each with myriad sub-brands.
While both of these shifts are very positive corporate initiatives – the emphasis on selling industry solutions will no doubt challenge many in the channel as they grapple with a substantially new value proposition, and new buyers, and a new engagement model. Selling the benefits of advanced and predictive analytics – the golden thread weaving through many of IBM’s new Smarter Planet and solution initiatives – will require a new engagement and partnering model, especially as IBM goes down-market to smaller public and private sized organizations.
In this regard, IBM faces many of the same challenges that other traditional channel-driven organizations are mired in. The Cloud is clearly helping to reshape routes-to-market. However, our take is that the new financial incentives should help box-centric resellers who are open to transition their business models – as the new bundled approach provides a natural path to deliver value-added solutions, with IBM helping both financially as well as via a variety of program support.
Other large platform providers face a similar sets of dilemmas, as many of their traditional go-to-market channel partners have historically focused on selling component technology to IT buyers – whereas the Cloud (in most of its forms) encourages partners to sell bundled solutions with a focus on business outcomes. Transitioning channel partners to focus 1) less on reselling and more on the value-add that they can provide, and 2) on helping them identify and close new business with process owners (rather than IT buyers) is two of the key challenges our industry currently faces.
While the combination of IBM’s new financial incentives and a variety of co-marketing programs (and available investment / funding) should accelerate deal identification and closure, this is not a trivial transition – especially given the emphasis on selling industry solutions around its Smarter Planet positioning (especially down-market, as previously noted). The good news is that IBM is clearly focused here – and is leading with some interesting new initiatives.
This blog originally appeared at Saugatuck Technology.