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Big Blue wants You!

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By Luke Wheeler

Compare the Cloud were invited along to IBM’s European Analyst and MSP Influencer Forum event on Tuesday. As you might expect from the US’ second largest firm – it was a well drilled affair, an action packed day of presentations, workgroups, networking, acronyms and coffee.

The big announcement – around which the day was constructed – has now been well covered well by the IT industry’s mainstream news channels, so we won’t delve too deeply into the details here, but to sum it up in one over-extended sentence:

IBM recognise the value of Managed Service Providers (MSPs) as a primary route to market for sales of IBM products and services to the “mid-market” sector (sub-1000 employee companies) – and have subsequently created a specific MSP program called “PartnerWorld” – which offers a broad range of partner benefits encompassing supply of product, technical and sales support, marketing and business development, leveraging of the IBM brand, and financing.

To the credit of the Mid-Market team at IBM there are certainly some interesting “beyond hardware” initiatives within the program, and MSPs should certainly take a good look at it. IBM invests $2bn a year in their partner channels, and has reportedly recruited >1400 MSP partners this year so far – so they’re certainly committed.

IBM invests $2bn a year in their partner channels…

It’s not every day you get invited into the hospitality of the world’s third most valuable brand* and get to meet so many key influencers, so as Compare the Cloud we felt there was a need to delve a little deeper into the strategy of IBM and what this might actually mean for the UK and Europe’s Small and Medium-sized businesses (SMBs)…

The first take-away positive for us was the fact that IBM realise that the nature of their channel has changed. IBM do indeed recognise there are different computing requirements and engagement levels needed for different types of partners – whether they be MSPs, Independent Software Vendors (ISVs), systems integrators, Value-add Resellers (VARs), Telcos, Cloud Services Providers (CSPs) etc. – and are re-organising their channel strategies accordingly.

The second take-away for us was that IBM do understand that the market is contracting for their primary revenue sources: traditional product sales (hardware and software) and Professional Services – and that these are being off-set with growth in demand for Managed Services, Maintenance and Application Hosting.

So the big news here is that IBM knows what the Mid-market / SMB sector wants, and they now have formulated a strategy to best deliver it.

But what is “it”? What does IBM have that the SMB wants? We heard ourselves asking.

“Well, we have an expansive portfolio of products and services”, came the reply.

And indeed, they do… but perhaps communication around specific products, technologies and their benefits needs to take central stage in this initiative of addressing the mid-market?

It’s evident from IBM’s strategy that the MSPs and channel partners will be relied upon to cherry-pick the right IBM products for their customers, alleviate any perceived complexities, and to re-assure end-user SMBs that IBM’s products and services are indeed better than the competition and worth paying a premium for. IBM clearly have a plan for educating their partners for the top-down approach, but what about the bottom-up approach and delivering winning messages to the end-user SMBs (such that they then turn to their suppliers and demand IBM products and services)?

What products do IBM have that are of value and relevance to SMBs today?

On behalf of the SMB and Mid-market sector, Compare the Cloud would like to explore that question in more detail: What products do IBM have that are of value and relevance to SMBs today? For us that’s the $24.1bn** question.

With annual investment of $6bn in R&D, and 6,180 patents to their name, IBM must have some great technology – technology that the SMB can benefit from.

Of course IBM has some excellent products and services within their expansive portfolio, but as an SMB (and perhaps even as a channel partner) you could easily be forgiven for not knowing exactly what they are and why they are better. The IBM website isn’t particularly enlightening either – sure it looks great and the right kind of information is there – but am I being asked to buy into the IBM brand or a better product? As we know, the brand itself is worth a great deal – but to the Mid-market and SMB – we’re pretty sure in most cases they’ll want the better product?!

So, politely we laid down the gauntlet and challenged IBM to step out (of their Ivory Tower) into our (Pie ‘n’ Mash) arena to explain the advantages of their key products and services to an informed and eager SMB audience.

The challenge is set. The initial response has been positive. We look forward to finding out what’s under the hood – and whether SMBs will want Big Blue.

*According to Interbrand (2012), the IBM brand is valued at $75,532m, behind Coca Cola and Apple.

**Around 20% of its $107bn annual revenue comes from the channel. Not bad for starters.