IBM tells channel types 'stick with us, you'll be millionaires'

IBM is going through massive changes to shift its business towards the cloud. It desperately needs channel partners to come along for the ride, so this week threw out a bunch of initiatives that it reckons will help.

In a global exclusive last month, we revealed the creation of Big Blue’s One Channel, and at the PartnerWorld Leadership Conference – held in a certain gambling paradise in Nevada – the IT goliath fleshed out some of its programmes.

Via the Business Transformation Initiative, IBM will host 300 new workshops to walk accredited channelites through a “strategy consulting engagement” that it says will magnify IBM’s their profitability.

It will take Business Partners back to school with new educational modules “around industry shifts”, based on a "broader roadmap of courses that lead to certifications" – this will sit on the PartnerWorld University platform.

There will be marketing tools including digital and social campaigns with co-marketing funds, and there’ll be more incentives.

Financial rewards are always used by vendors to shape their suppliers behaviour: IBM said it will up compensation via the Partner Growth Incentive for selling Power and Storage.

On the software side, where IBM has a huge portfolio and seems to work (in Europe at least) with large system integrators and specialists, it wants to get more resellers on board. With this is mind, it is simplifying certification for SaaS with the shiny new IBM SaaS Entry Product Group.

Some channel partners complained to us last month that IBM is calling their customers directly to sell them cloud contracts - even though they might not use the cloud service - as it gives them software licensing rights.

Big Blue made no reference to channel conflict at the partner knees-up.

Those reselling IBM services will get ten per cent more margin under the Remarketer Margin Enhancer, and a brand spanking new Services Consumption Programme is designed to “drive demand for service provider solutions”.

The company itself is plotting a course for the business tied to mobile, social, analytics, cloud and security. It doesn’t have all the answers to the problems, but at least needs to give partners confidence that it does.

CEO Ginni Rometty told channel partners at the event “transformations are only clear when they are told in revisionist history, never when you are in the middle of them…I thank you for being part of this transformation”.

Channel partners account for roughly a fifth of IBM’s global revenues, she told the audience.

As well as reshaping the channel business, IBM is also carving up the wider organisation, which we also exclusively revealed last month. The company is moving from the traditional hardware, software and services silos.

The units will include Research, Sales & Delivery, Systems, Global Technology Services, Cloud, Watson, Security, Commerce, Analytics, with Mobility to overlay all of the above.

The moves are designed to improve results after eleven consecutive quarters of declining sales and more recently, falling profits.

IDC analyst for hire Darren Bibby, programme vice president of channels and alliances research, backed up IBM’s moves.

“The greater cloud market alone is expected to reach $118bn this year, representing a huge opportunity for partners who embrace it. In fact, IDC estimates that Business Partners expect to almost double their cloud-oriented business in the next two years”. ®

Updated to add

Since the publication of this story, a market watcher of some repute – but whom shall remain anonymous – has been in touch with his or her own take on Big Blue's moves:

I think you have been too kind to IBM with this continued patronising nonsense they keep foisting on the channel. And they wonder why they are still a bit player in the mid market and nowhere in SMB. I can't see this changing any time soon without someone in charge there getting real.