Arvind Krishna: IBM ‘Dead Serious’ About Partner Push; Upcoming Growth Has ‘Got To Be’ Through Channel

IBM’s CEO tells partners at The Channel Company’s Best of Breed Conference that the IT giant has stepped up to invest in the channel, and offers major opportunities that include hybrid cloud, Red Hat solutions and security. ‘Now, let’s go grow the business together,’ Krishna said.

IBM’s effort to generate growth in hybrid cloud and security is so ambitious that it’s “got to be” through the channel, since the IT giant has mostly shifted from taking deals direct as part of its “dead serious” push to work more with partners, IBM CEO and Chairman Arvind Krishna said Monday.

“To reach the vast majority of the market, it’s got to be through you,” Krishna told attendees at the 2021 Best of Breed (BoB) Conference in Atlanta, hosted by CRN parent The Channel Company. Krishna (pictured center) took questions from Robert Faletra (pictured left), executive chairman of The Channel Company, and Steven Burke (pictured right), editor news at CRN.

[Related: IBM CEO Arvind Krishna’s 10 Boldest Statements From Best Of Breed 2021]

Krishna outlined pivotal areas of opportunity for solution providers to work with IBM as the company doubles down on its investment into the channel, with the CEO re-committing to double the business that IBM does with the channel in the next four years.

To achieve that feat, Krishna said he does hope to generate more interest from channel partners in working with IBM going forward—acknowledging that “I’m not getting what I want” from the channel so far.

“I think we needed to step forward and we needed to hold our hand out and say, ‘This is what we can do,’” Krishna said. “We’re willing to invest. We’re willing to put in education. We’ve put in incentives, we’ve put in marketing funds, we’re doing lead passing. We’ll invest with you to build solutions. Now, let’s go grow the business together.”

Krishna pointed to IBM’s hybrid cloud platform—powered by solutions including Red Hat’s OpenShift Kubernetes platform—along with IBM Cloud Paks application modernization software and cybersecurity as the three biggest areas of opportunity for partners looking to grow with IBM.

While there’s an ongoing opportunity for partners with IBM around servers and storage, “I think that the opportunity in software across the three areas I mentioned is so much more,” Krishna said.

Krishna’s statements come after his first year-and-a-half as CEO of IBM, during which time he has launched a $1 billion investment, above and beyond standard incentives, to elevate the role of partners at IBM. Under Krishna, IBM has simplified its go-to-market model and placed bigger bets on the partner ecosystem, committing to let partners handle all but the several hundred clients that prefer to buy directly from IBM.

On Monday, Krishna reiterated this commitment, saying that beyond those “few hundred” direct accounts, “everywhere else is wide open space” for channel partners.

After hearing Krishna’s pitch, Chad Hodges, president and CEO of Sacramento-based HSB Solutions, which doesn’t work with IBM, said he plans to explore the possibility of partnering with the company.

Hodges said hybrid cloud is one area where he says IBM’s approach could resonate with his company’s client base.

“I’d be curious to see what the portfolio looks like now—now that Red Hat has really been assimilated and they’ve really figured all that out. I’d like to see more of what that could look like,” Hodges said. “Arvind got me excited about that part.”

In the past, Hodges said he didn’t perceive much channel friendliness from IBM, but that appears to have changed under Krishna.

“I always had the impression that they were very competitive against most solution providers,” Hodges said. “But he made it very clear: he’s only going to have a couple hundred direct clients. And everything else is going to be partner-led. That’s a big shift on their part, because that’s not traditionally been what we’ve heard from IBM. I thought that was pretty impressive to hear him say that.”

One solution provider that’s already seeing the fruits of IBM’s ramped-up channel push is Boca Raton, Fla.-based Flagship Solutions Group. The IBM Gold Business Partner, which almost exclusively focuses on IBM solutions, has seen 23 percent growth in its IBM business for 2021 to date compared to the same period of last year, said Flagship Solutions Group CEO Mark Wyllie.

A key driver for the growth is IBM’s emphasis on hybrid cloud, where the company has a strong differentiator from Amazon Web Services and other major cloud players, Wyllie said.

“IBM has come at it differently. You know that with IBM, it’s an enterprise solution. If I have to bet the farm on something running both in the cloud and on-prem, I’m going to count on [IBM] much more than I’m going to count on AWS,” Wyllie said. “That’s where I think IBM has a leg up.”

John Head, chief evangelist for IBM partner PSC Group, which is owned by Bannockburn, Ill.-based Netrix, said that “being part of the IBM channel has never been easy” in the past. He’s hopeful that Krishna’s positive attitude toward the channel will improve that.

With Krishna’s commitment to partners, “it’s a good direction,” Head said.

When asked about whether IBM might look at combining its IBM and Red Hat partner programs to simplify life for partners, Krishna said the company would “take it under advisement.”

But Krishna said it’s crucial for Red Hat to remain “neutral” in the market, and able to work with all cloud, hardware and software providers.

“That’s how, I think, Red Hat gets its footprint,” he said. “But we will take it under advisement, in terms of, ‘Hey, can we do more in terms of maybe aligning the models of them—but not necessarily the actual [way to] go-to-market. I want to leave that choice in the marketplace.”

Wyllie said this approach makes a lot of sense, with a possible “advantage” in aligning the models of IBM and Red Hat around elements such as terminology.

“That would make it easier to communicate, because the terminology is the same,” he said. “But I agree with them—I think Red Hat has to be a little bit of a ‘Switzerland’ from a hardware standpoint.”

Ultimately, IBM’s $1 billion investment into the channel is just the beginning, Krishna said—characterizing it as a “big enough down payment, that people understand that we’re serious.”

Looking ahead, “less direct, more channel is where we would want to go,” Krishna said.