IBM Pledges Assistance To Partners Transitioning To New Business Models

Cloud computing, business analytics, social computing, mobility and "smarter planet" represent major growth opportunities for solution providers, IBM channel executive Bill Donohue told attendees at UBM Channel's XChange 2012 conference in Dallas Monday. And, IBM is taking steps to help its channel partners transition to these new technology markets.

"This is a big, big, big opportunity in these new, higher-value solution areas," said Donohue, an IBM veteran who was named vice president of IBM North American business partner and mid-market sales several months ago. But, he noted the opportunities mean changes for many partners, in terms of both partner business models and the types of customers with which they engage.

Donohue opened by sharing the results of surveys IBM has conducted with both CEOs and CIOs. Most surprising from the CEO survey was the fact that more chief executives now identify evolving technologies as the most important external force impacting their organizations, ahead of other external market factors and macroeconomic trends.

[Related: CRN's Exclusive Coverage Of XChange 2012 ]

The CIO survey found that businesses are eager to increase their investments in such technologies as business analytics, virtualization, cloud computing and business process management.

Donohue supplied some eye-popping statistics from IBM's own experience that bore out the survey findings. IBM believes that business analytics, for example, will generate $16 billion in sales between now and 2016, while cloud computing will be a $7 billion business for IBM by 2015. Customer use of managed service provider services already makes up 10 percent of IT spending today, Donohue told the audience.

Smarter Planet, which Donohue said IBM has identified as the "fourth era of IT," after mainframes, PCs and the Internet, will generate $10 billion in annual sales for IBM by 2015. Smarter Planet is IBM's initiative to bring intelligence to such systems as municipal traffic control systems, "smart" power grids and water management systems.

But, Donahue acknowledged all this means big changes for channel partners -- including changes among solution providers themselves and in the customers they work with. Solution providers, for example, are increasingly working with line-of-business executives, including CFOs and chief marketing officers, rather than traditional IT management.

"We're starting to see changes in the people we're calling on," Donohue told XChange attendees. "No longer is it just the IT executive. A line-of-business executive is a different kind of animal than the typical IT person we've dealt with in the past."

NEXT: Donohue Outlines IBM Partner Initiatives

Donohue outlined a number of initiatives IBM has undertaken to help partners transition to these new, emerging areas. Through the IBM PartnerWorld program, for example, IBM offers market intelligence, co-marketing funding, and sales support and tools. To help partners develop needed skills, IBM runs boot camps and other training opportunities in cloud computing, social media and other technology areas. And financial incentives and global financing assistance help channel partners increase their profits in these new markets.

Donohue also stressed IBM's commitment to lead with channel partners in the midmarket, which Donohue said is the fastest growing part of the vendor's business.

To back up Donohue's pledges, John Alday, president of Cima Solutions Group, a Lewisville, Texas–based IBM partner, took the stage to describe how IBM helped Cima -- which Alday said had once been a classic VAR -- expand into cloud computing and develop a managed services business with recurring revenue. "We leaned heavily on IBM to guide us through that," Alday said.

Donohue also pointed to the IBM PureSystems line of converged infrastructure systems, which the company launched earlier this year, as the kinds of products the company is developing to penetrate these new solution areas. PureSystems includes the PureFlex infrastructure system and PureApplication platform for running applications.

PUBLISHED AUG. 20, 2012