This month IBM launched a new go-to-market program designed to attract value-added resellers (VARs) who could sell IBM hardware, software and other products within specific vertical markets and to C-level executives.
It's not a traditional role for VARs, especially for a direct-sell, buttoned-down company like IBM. But the company is trying to standardize the way it manages channel relationships and develop them in much the way it does its technology, according to Debra Thompson, vice president of channels and solutions marketing IBM.
Nicole Lewis: How have you changed your business model to better enable your partners to sell IBM products to customers?
Thompson: For the last couple of years we have been implementing one [channel-support] infrastructure across all of our different technologies so we can deliver the education and the co-marketing, etc. through a single set of processes and tools. That was the fundamental thing we had to do in order to be able to be more effective with [the channel] and reduce [sales] costs as they would take on more IBM technology.
Some cross-training and cross enablement [of partners] has been under way now for about six months. We're at the next phase of that where we are actually now going out to a set of resellers. We are targeting about 6,500 resellers around the world that are more SMB oriented, to work with them on our technologies.
Lewis: Can you give some specifics?
Thompson: First of all we are reaching out and helping them to understand how IBM is going to market [with its SMB products] today and getting them re-activated if you will. We have channel-academy programs that we are running, which has cross brand in it, so we're starting to set up more crossed brand road shows and other delivery mechanisms.
This month IBM launched a new set of end-user programs. We have changed our go-to-market model from being focused on individual brands or individual groups to [identifying with] [one brand] across IBM. So [as of] April 2, our first operational day, we go to market through only nine programs that are hardware, software and services combined.
And so -- as we go to end-user customers, we are going [to them] with a more comprehensive total value proposition -- working with the business partners in those programs. We also have an industry vertical market model [in which we work] with partners around specific banking, or insurance, or manufacturing areas, helping them build their skills and link them to ISVs in those areas.
Lewis: What customer segments do you focus on?
Thompson: In the enterprise market, the programs we've set up are oriented by audience. So CMOs, CFOs, other line-of-business decision makers are targeted with a line-of-business set of programs, which are very industry oriented in their messaging, i.e. banking, finance, telco, etc.
A second major audience we target is the CIO. The CIO program deals with the business issues, innovation issues, decisions of outsourcing managed services, etc.
Then we have five programs that are targeted toward the IT manager and partner. And those are leveraging information, optimizing IT, governance and risk management, empowering people, and business flexibility.
The last program is what we call the high volume program. It is really the program oriented for the technology buyer. If you look at mid market and where did business come from, it's healthcare and life sciences -- there's been a big explosion again in retail banking, so there's a set of programs oriented around business solutions targeting these industries.
Lewis: What are the drivers behind the decision to change your go-to-market strategy?
Thompson: The way purchasing for IT technology has been done by customers has continued to evolve and we've moved away from purchases being done by CIOs exclusively or the IT department exclusively. The way that customers are purchasing solutions is to buy more of a complete integrated technology: application, middleware, hardware, customers are now buying more of a solution spend.
In the SMB market, over two-thirds of the purchases are being made for solutions. About a third of the total market is for business solutions, about a third for infrastructure solutions and then about a third of the opportunity remains a technology purchase. [Customers] are continuing to look toward the channel as a predominant influencer in the decision, although in the most recent year or two the influencers like the system integrator and ISV business model have had more influence in the purchase decision than the straight out-and-out VAR.
Lewis: What are the challenges?
Thompson: We are finding a couple of challenges in the channel. The business partners that have been servicing customers and helping them to grow don't have the breadth of skills or applications or solutions to address that [larger size of] customer. Solution providers are trying to increase the value and the breadth of their offerings so they can service their customers better and be appealing to new customers.
This is really becoming a reality for many of the companies in the market and so as a provider of programs we need to start to look at not just the best-of-breed programs around the server or that piece of software but look at it across our portfolio, especially when we have a portfolio as broad as what IBM does. So some of the drivers and some of the changes that we're making that are compelling us is around being able to help them make that next step in their business model.