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Channel exec Gerentine maps out IBM MSP, ISV partner strategy

IBM is placing greater emphasis on MSP and ISV partners as it looks to boost cloud-related revenue from SoftLayer cloud services and the Bluemix developer platform.

At IBM's PartnerWorld Leadership Conference 2015 (IBM PWLC) held last week in Las Vegas, the vendor made a lot of noise about One Channel Team, an organizational effort to simplify and streamline its global channel marketing and sales organizations across strategic markets: cloud, analytics, mobile, social and security. IBM also talked about expanding its Business Transformation Initiative (BTI) program for partners and its partner ecosystem.

In a recent conversation with Mike Gerentine, global vice president of channel marketing at IBM, SearchITChannel learned more about how IBM is rethinking its partner strategy. The vendor's PartnerWorld partner program has 150,000 partners worldwide. About 60,000 of those partners are partners who sell products and services.

A closer look at IBM's partner base reveals that the lion's share, or about 85%, of IBM partners fall into the Member tier of its partner program -- the entry-level tier -- while less than 5% are in the top Premier tier. The remainder, about 10%, is in the mid-tier, or Advanced partner, level. According to IBM, partners generate 20% of the vendor's annual revenue.

In this interview, Gerentine discussed the importance of IBM MSP and ISV partners to the company's partner strategy.

Talk about IBM's evolving partner ecosystem.

Mike Gerentine: Just like IBM is transforming and the market is transforming, business partners are transforming as well. Because of the phenomenon going on with the cloud, we're working with our partners as they move to a recurring revenue subscription model, or SaaS model.

We recruited about 10,000 new partners last year, the majority of whom are MSPs [managed service providers] or CSPs [cloud service providers]. [At IBM PWLC 2015, Marc Dupaquier, general manager for IBM global business partners, announced that the company recruited 9,500 new partners. Many are IBM MSPs but also ISVs and developers, system integrators, and born-in-the-cloud companies.]

As partners move to a cloud model and SaaS, they can't just resell. They really need to own their own intellectual property, or IP.

These managed service providers are engaged with influencing or selling SoftLayer, our acquisition that competes against Rackspace and Amazon. We're seeing tremendous growth with SoftLayer.

MSPs are a new part of the equation for us. And, with the divestiture of our System X business to Lenovo, there were several thousand partners who were only selling those low-end boxes. We've offset [the loss of those partners] with [the addition of] MSPs and actually increased our overall partner base.

As partners move to a cloud model and SaaS, they can't just resell. They really need to own their own intellectual property, or IP. So, a lot of them are now acquiring or hiring developers, and that's where the ISV comes in. We're starting to see the merging of an ISV with the reseller. Those two models are coming together and with the MSP as well. And they're creating their own intellectual property, which means they're developing their own software, such as a mobile application, for example. That's where IBM's Bluemix, our developer platform, comes in.

Bluemix provides developers the ability to quickly develop applications. A lot of our partners are getting trained on Bluemix. [At IBM PWLC 2015] we announced a program for startup companies less than 5 years old who commit to developing applications on top of Bluemix: IBM will make a $125,000 investment with the partner to help them get started. No other vendor in the industry is matching this.

How does IBM's PartnerWorld partner program suit all of the different partner types in this expanding ecosystem?

Gerentine: IBM has one business partner program, called PartnerWorld, and it addresses all the different partner types, but we do have in the program a number of what I'll call different features or attributes depending on the partner type.

We have a points-based system, and that's how a partner moves from Member to Advanced to Premier tier. [Points can be awarded] based on how the partner is skilled or certified, [they] can be [awarded] based on revenue or [they] can be [awarded based on] references as well. So that will hopefully address the different partners in the ecosystem, depending on the partner type. Resellers get leads and co-marketing dollars.

One of the big enhancements we're making to the program is around education. We're accelerating the opportunity for our partners to go deeper and become experts in the different growth areas. We are refreshing and redesigning the PartnerWorld University platform for education.

Now that we have the One Channel Team organization, all the software and hardware global business partner resources that we have are under my leadership, where before we had multiple organizations doing channel marketing and channel sales. So all the tools that we had, the different programs, the different co-marketing programs [are] all being consolidated. And, we all work for Marc Dupaquier.

What can you tell partners about the timeline for this consolidation?

Gerentine: Some things are happening immediately while some things will take the rest of the year to pull together, such as co-marketing programs, which are very elaborate because you have terms and conditions. We're also in 160 countries around the world, and we have to work with our lawyers and compliance to make sure all of the programs are consolidated. That piece of it doesn't happen overnight.

On the other hand, from an organizational construct, it's happening immediately. Two weeks ago we announced internally the One Channel Team program, and all of the resources have been moved. I put a new leadership team in place at the global level and I'm rolling out … leaders for both channel marketing and channel sales in all seven of the [world] geographies, and they'll report into the global organization.

Talk a bit about IBM's Business Transformation Initiative.

Gerentine: In the past year and a half, we ran over 100 BTI workshops and we just committed to run 300 BTI workshops this year. BTI is a strategic consulting engagement at the business partner firm level designed to help qualified partners accelerate their business transformation.

I recently pulled data from 34 companies that participated in a BTI workshop and found that the business partners had [an average of] over 20% quarter-to-quarter growth in revenue. Also, 20 of the 34 companies had 40% to 50% quarter-to-quarter growth in revenue.

So why is that? What's the secret sauce of BTI? It's all about helping partners focus and become more efficient in how they run their business. A couple of examples: Partners' sales reps come from a variety of companies and -- unlike IBM, which runs its employees through a solution selling training class so they're all taught to sell the same way based on a methodology and approach -- a lot of business partners are small and medium-size businesses that give their sales rep a bag and tell them to go sell. The selling approach varies from sales rep to sales rep. So, by putting a common selling methodology in place and having reps doing it the same way, partners are seeing benefits. Also, what we're seeing is that when partners put more energy behind marketing -- [investing] in a marketing budget, [bringing] on a skilled marketing resource or [leveraging] an agency -- partners are able to drive more demand, get their company brand out as well, which drives more pipeline.

So there's about half a dozen repeatable things that we're seeing with business partners after we run these sessions, and the results are staggering.

How do partners qualify for BTI?

Gerentine: Partners are selected by their channel sales reps as having the highest potential for growth and/or interest in working with IBM. The partner company CEO must also commit to attend the full-day session as well as executive staff. There's a pre-work assignment before the workshop, and after the workshop there are 30-, 60-, 90-day, six-month and one-year reviews as well.

Companies also have to provide some fundamental information about the business.

Is IBM still looking for new partners?

Gerentine: Yes, especially in the cloud, MSPs and digital agencies.

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