IBM said by 2010 it will derive 50 percent of its profits from the software side of its business, and it is counting on its channel partners to make that goal a reality.

Mark Hanny, IBM's vice president of independent software vendor alliances, said channel partners and ISVs are crucial to Big Blue's software strategy, since they are on the front lines performing consulting and implementation functions for IBM middleware customers.

"Partners are strategic because clients don't buy middleware on their own; they buy it as part of an entire solution," Hanny said.  Rather than just reselling a piece of  software, IBM VARs and ISVs can drive their own and IBM's software growth by providing consulting, implementation and integration services of IBM software with clients' existing infrastructure, he said.

Mike Chadwick, executive vice president at Prolifics, said IBM helped him transition his software development firm from a software reseller to an ISV and integrator. Chadwick said his company began working with IBM in the mid-1990s because he felt IBM's WebSphere suite was going to dominate the application server market.