IBM to pump Power Systems through Tech Data, Ingram Micro
Expanding channel coverage in the US, and maybe Canada
Big Blue is boosting the size of the Stateside distribution channel that sells its Power Systems servers and enterprise storage by inking master distributor agreements with Ingram Micro and Tech Data. With the new deal, IBM is hoping to boost its profile among small and midrange businesses in particular, a growing market which is projected to be worth $160bn in 2013.
The deal, which comes into force immediately, was announced internally on IBM's PartnerWorld partner web portal last week. It will see Tech Data and Ingram Micro, which previously sold System x iron as well as various software and services products from IBM, join Avnet and Arrow Electronics in being able to push servers based on IBM's own Power processors as well as its full line of enterprise storage.
Bill Donohue, vice president of North America business partners and mid-market sales at IBM, tells El Reg that IBM wants to get more reseller feet on the street in the United States and possibly in Canada if these agreements bear fruit. It is not that the downstream partners at Avnet and Arrow aren't selling a lot of Power Systems iron and various storage products, but rather that Tech Data and Ingram Micro have long-standing partnerships with different resellers who have a different set of customers – and in these two cases, particularly managed service providers – that Avnet and Arrow currently don't reach.
"We are trying to drive lift, not shift," Donohue explained. "And we have taken steps to make sure shift doesn't happen."
The lift IBM seeks includes the potential for its Power Systems, which are based on its own Power processors, to compete more aggressively with two-socket and four-socket x86 iron based on Intel and AMD processors. And as gravy, both Ingram Micro and Tech Data are getting the certifications and building the expertise to sell and support very large Power-based systems like the 256-core Power 795. These bigger boxes have a much high profit margin than a two-socket workhorse server, so you know that resellers downstream from Tech Data and Ingram Micro will be keen to try to get in on that action - particularly if Big Blue is there to help them try to take out vintage Sun and Hewlett-Packard Unix servers.
IBM reckons that in the United States alone, SMB shops (meaning those with fewer than 1,000 employees) will spend $160bn in systems, software, and services in 2013, and that this market is growing at around 3 per cent per year. There is a lot of money to be had here, and even after selling between $3bn and $4bn a year in Power Systems iron (that's El Reg's estimate, not an IBM disclosure), there is still a lot more opportunity to peddle Power7 and Power7+ iron running the AIX, IBM i (formerly known as OS/400), or Linux operating systems.
The cut-throat priced, penguin-powered PowerLinux machines announced last year are no doubt going to be a big focus for IBM and its existing and new distributors and their downstream partners, particularly once the double-stuffed Power7+ machines, which will put two whole Power7+ processors into a single socket, ship sometime this year.
Donohue was not about to pre-announce products and strategies, but he did tell El Reg that IBM expects to see slightly higher Linux-on-Power penetration through the Tech Data and Ingram Micro channels than it has seen through its own channel to date.
Avnet and Arrow are also peddling PowerLinux machines, which are designed to offer the same price and better performance than equivalent single-socket and two-socket x86 iron, and they and their downstream resellers are equally fired up about the PowerLinux prospects.
Under the terms of the reseller agreements that IBM has signed, resellers of Ingram Micro and Tech Data can sell any Power-based system - from the smallest Power 710 rack or PS700 blade server to the big, bad Power 795 machine – provided they have the right certifications, just like any other reseller. They can also sell the PureSystems modular servers based on Power, which includes the p260, p260+, and p460 server nodes for the Flex System chassis. On the storage side, Tech Data and Ingram Micro resellers will be able to push XIV, SONAS, DS6000, DS8000, TotalStorage 7000 arrays and the SAN Virtual Controller.
Donohue says that the reseller agreements with the two new distributors for Power Systems only covers the United States, and that sometime this year it will complete an evaluation of the possibilities of having similar deals in Canada. As for the prospects of the deal branching out into Europe and Asia, Donohue would not say.
The one thing that IBM does not want to do is upset the apple carts with Arrow and Avnet. "I want to emphasize that Arrow Electronics Inc and Avnet Technology Solutions remain critically important to the success of IBM's Power Systems and storage distribution strategy and business," Donohue wrote to resellers on the PartnerWorld site. "It is our intent that IBM's current Power resellers would continue to do business with Arrow and Avnet as they are today." ®