IBM: Reorg Will Aid VARs

Late last week, Big Blue said it intended to restructure its STG (Systems and Technology Group) around customer segments and away from product silos, as it currently is. According to an internal memo from William Zeitler, senior vice president and group executive, IBM Systems and Technology Group, the business will be realigned into four customer-focusing groups; Enterprise Systems (large enterprise clients), Business Systems (small and midmarket accounts), Industry Systems (clients in areas such as retail, telecommunications and healthcare), and Microelectronics (pure technology clients—e.g., custom microprocessor and ASICs).

"A client-focused model will enable us to extend our enterprise leadership, accelerate our growth in SMB and exploit new embedded and OEM opportunities outside the traditional IT market," Zeitler said in the memo. "These changes play to our strength in addressing the broad client challenges that drive new opportunity today—like IT complexity, business resilience and energy efficiency."

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An IBM representative said the Business Systems unit will be led by Erich Clementi and concentrate on SMB accounts selling mainly through the channel. "We have a renewed focus on the SMB market and will look to go there through and with channel partners," the representative told Channel Insider. She said that IBM hopes to increase the amount of revenue it makes in SMBs to match what it makes selling to enterprises. "This move will give the channel access to more customers and we will be selling more products through the channel." She said it would also be likely that the marketing spend that IBM lavishes onto the SMB market would increase.

Keith S. Blake, president, Timpanogos Technologies, welcomed the move. He said although the strategy was a return to ways IBM has previously done business, it was the right strategy to adopt now. "This was a rational decision for IBM, different businesses need different solutions and by focusing on the customer segments, IBM can now give customers better, more focused attention."

He said it would also be positive for channel partners. "The small business channel has needed more attention, and now with the Business Systems unit focusing on small businesses, it should get it." Blake, said his company focuses already on vertical markets, in particular the education sector, so it would not need to do any reorganization within to match IBM's latest strategy change.

Big Blue has long eyed up the lucrative SMB technology arena, thought to be worth around $500 billion. At its annual PartnerWorld Event last year, IBM CEO Sam Palmisano said the SMB sector would become the vendor's largest customer segment within the next five years.

IBM also has launched several channel programs, including Express Advantage and Solutions Seller, and product sets focused on the SMB sector, also under its Express brand. IBM also announced in October its Grow Your Business portal, designed specifically for SMBs that Big Blue hopes will entice an additional 500 SMB partners to its folds.