Announced last February, IBM has officially rolled out its Software Value Plus skills initiative, switching from a largely open-source distribution model to a hybrid model, where certain products will only be available to authorized partners. As a carrot, the IBM Software initiative includes: passing on midmarket sales leads valued below $50,000; delivering new cloud computing certification; and providing direct access to more than 130 industry training sessions online and in local markets globally.
According to Sandy Carter, vice president of IBM software channels, there are approximately 45,000 partners selling software in North America, and 11 percent of them are authorized. "We're very pleased with our top-tier partners worldwide being authorized to sell." She says many of IBM's partners will be selling both open and authorized products, but "they see it (SVP) as a real value advantage."
SVP is all about upgrading skills, says Carter, who has had this position for approximately a year, coming over from IBM's SOA group. One of the first things she did was commission a study on partner profitability, gathering data from nearly 800 partners. The study found IBM partners were 36 percent more profitable on high-value initiatives than non IBM partners, associated revenue was 60 percent higher, and startup costs were 30 percent lower. And compared with Oracle partners, IBM's had 34 percent less ongoing costs.
She says IBM partners are more profitable because of two major factors -- demand generation, and skills and enablement. "The more skilled the partner, the higher the margins."
So far, Big Blue has increased the skills basis by 80 percent, says Carter. "New training will be on new areas that partners told us were important," including cloud certification and cloud camps on how to make money on clouds.
Another focus will be around solutions and industry focus. She says 65 percent of decision makers say they're going to select a partner based on the business knowledge. "So industry knowledge is important." IBM has 130 industries on line that partners can be certified and validated on.
According to a new survey of 400 partners, more than two-thirds of IBM Software partners expect improved profitability from this initiative; 60 percent of IBM's top-tier software partners said they see more revenue in the form of hardware, software, and services when selling IBM software as compared to revenue generated by other vendors' top tier partners; and 50 percent of these partners report that cloud computing will be a leading driver of profitability over the next two years, and the same percentage of all IBM Software partners rank consulting services as their top cloud opportunity.
This is a big investment in both time and money, says Matthew Garst, Director, Global Sales and Marketing, Enterprise Information Management, an IBM Premier Business Partner. The company is certified for nine IBM software products, and has 35 personnel certified for these products.
"Although we would prefer to dedicate all of our time to client deliverables, we believe the benefits of obtaining the training and certifications to participate in the program vastly outweigh the disadvantages," Garst said, adding that this initiative keeps EIM competitive in a demanding marketplace.
"As a result, our clients can expect a larger return on their investment with our solution offerings." Carter says their value add distributors have been working on the program since its announcement, but partners like Avnet Technology Solutions have already started to enable around industry-specific solutions. It's not just about technology, she says. "Skills are really a win-win in the marketplace. Our focus is not on how many partners are out there, but rather on having the right skills.
"The first step was rolling out the authorization program, after giving the partners the better part of a year to get ready for it. The next step is letting them know that the industry and solutions focus will be incorporated into next year's authorizations, says Carter. "Our partners are small businesses and they need time."
She expects even more partners will be investing in that skill process.IBM is also expanding its investments for all business partners serving the midmarket, including: a new solutions development team to create a suite of integrated, cross-IBM solution building blocks around areas such as data protection, business analytics and dynamic infrastructure; a $130 million investment in marketing and demand generation programs including a significant expansion in co-marketing programs to help partners design their own lead generation campaigns; and increased support of local partners through Territory Business Partner Representatives to drive opportunities, develop solutions, maximize co-marketing activities and focus on client satisfaction.
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