IBM is consolidating its entire global partner program, rolling its four PartnerWorld tracks into one on 1 January 2005, in a plan aimed at luring partners into broadening their IBM-based offerings.
IBM's 90,000 business partners globally have been divided until now into four PartnerWorld groups -- Personal Systems, Software, Systems and Services, and Developers. The four-part structure has meant a certain amount of resource duplication and complexity for partners dealing with Big Blue.
A US report in CRN said IBM planned to roll out the new structure in stages through 2004, but Andrew Baker, Australia and New Zealand director of IBM's global business partner program, said the consolidation would take effect in one go.
The new overall program would give partners a single point of contact with IBM and its array of products and services, removing the need to deal with different brands and different partner groups, he said.
“Which is going to be positive for our partners. They will have the same standing across all the different products and solutions that they sell,” Baker said. “So once established as an IBM business partner, the incremental investment they would need to make to add WebSphere to their offerings, say, is not very great.”
Baker has responsibility for all IBM business partners -- volume distributors, VARs, system integrators, ISVs and others -- in the region across all the vendor's different product divisions.
“The program is ... about how we channel-enable IBM offerings so they fully go through the channel,” Baker said.
He said that he doubted the consolidation would save IBM money, however. It was hoped that the move would encourage partners to offer a wider range of IBM products and services, he said.
CEO Sam Palmisano reportedly kicked off Big Blue's annual PartnerWorld conference this month, in Las Vegas, by asking some 5,000 partners at the forum to embrace open standards, technical innovation, business process transformation and outsourcing.
Business partners had accounted for US$2.9 billion or a third of total IBM revenue last year, and some US$ 29 billion in sales, up 16 percent from US$25 billion in sales in 2002.
“When you look at our product base -- servers, storage, PCs, printers, software, notebooks -- Our partners are responsible for more than 60 percent of that,” Baker said. “In our fastest-growing segment of the Australian marketplace, our primary go-to-market strategy is through our partners.”
Australian IBM partner business had grown 30 percent last year. “And last year was a record,” Baker said.
IBM has promised several new 2004 incentives and technologies for partners. Another US$500 million has been earmarked globally for incentives to help partners push into SMBs this year, including US$100 million in new programs.
“We want to encourage partners to move into the competitive pieces of the market,” Baker said. “We have made it a rebate program, as opposed to a margin program which encourages them to give an aggressive start price.”
ISV partners will be reorganised into PartnerWorld industry networks according to verticals.
“We want ... to continue to expand our network of business partners. That's critical for IBM,” Baker said.
One initiative offers partners tools to help end-users automate their IT environments. IBM believes on-demand or utility computing to be the next big thing in IT -- reflecting end-users' desire to integrate systems and applications and streamline IT operations to lift productivity and thus profitability.
Global partner plans would be presented to Australian partners in more detail at IBM Partner Meets in Sydney and Melbourne in April, Baker said.
Duncan Hewitt, acting general manager for IBM Software in Australia and New Zealand, said the PartnerWorld moves were part of Big Blue's ongoing strategy to make it easier for partners to deal with the company.
“We have had a business over the last six years that has been organised by brands. So we've made a couple of changes,” he said. “There's a couple of reasons for the re-alignment, particularly around industries.”
Hewitt said customers had been “starting to ask” for ways to solve content management issues -- and the answer for IBM had been to take a piece of the answer from each different brand. The vendor had concluded that it would be best to make it easier to share resources among Lotus, Tivoli, DB2 and so on at the customer level, he said.
“So we changed the organisation of our sales forces to align them with industry segments,” Hewitt said. “We want to start from asking what problem we are trying to solve.”
The changes had helped halve the numbers of IBM sales staff needed across brands and should also help IBM consolidate and benefit better from partner feedback, he pointed out.
“It should be a lot more flexible for partners,” Hewitt said.
IBM in the US recently announced new versions of its xSeries 206 and 306 Intel-based servers for small and medium-sized businesses. The giant vendor has also released new storage software this month as part of its e-business on demand strategy.
Big Blue recently announced plans to acquire yet another business partner, US-based Trigo Technologies, to add product information capabilities in modular form to WebSphere middleware. Trigo -- which has 150 staff -- has a development office in Brisbane.