IBM Unveils New Midmarket Investments, Solutions for Partners

For years, IBM has been knocked by the channel as arduous to do business with, especially when it comes to developing midmarket solutions and backing them with the right support for partners to sell effectively into that space.

IBM has made improvements though, albeit with many fits and starts along the way. IBM’s Express portfolio has had some success in the channel, but the company never fully integrated – or frankly effectively promoted — these midmarket-focused products. The lack of harmony between Express products in the various IBM divisions made it difficult and time-consuming for partners to easily put together multifaceted solutions for customers.

This week, IBM takes another stab at midmarket success with several major initiatives aimed at channel partners selling into this space. The changes include a $130 million investment in marketing and demand generation programs and a new set of technology solutions-based building blocks that feature product pieces from across IBM’s different internal groups – all in one place.

“In 2010, it’s about simplification across everything we do, from the bid process, disbursements and promotions,” said Tim McChristian, vice president of sales, global business partners, for IBM Systems & Technology Group. “It’s also about a sales model transformation with a significant increase in business partner-led territories.”

In fact, under the new program all midmarket sales opportunities become the primary responsibility of business partners, who will take the lead in these territories from the point of lead creation through to fulfillment and implementation. 

To achieve this, IBM is reorienting how it conducts business, replacing face-to-face lead generation reps that have historically identified leads and then passed them off to partners with an organization that supports partners in developing business they find on their own.

“This is truly moving to business partner lead creation,” said Marc Dupaquier
IBM general manager of global mid market. “Partners told us they’d rather find the leads and nurture them than have them passed by us. So instead of having us invest in marketing to find leads and waste dollars, we think it’s better to align with the business partner at the point of lead creation and help them there.”

Dupaquier said that IBM this year will more than double its investment in partner co-marketing to help solution providers design their own lead generation campaigns, execute customized marketing tactics, and have more direct control over their midmarket opportunities. Along those lines, IBM has shifted its midmarket sales organization into a support and territory capacity management role.

“We will keep people to take inbound calls, but our goal is if we get any inbound lead from midmarket customers we will immediately pass off to business partners,” he said.

In return for accepting IBM’s added marketing muscle and financial investment, partners will be monitored to see that they cultivate their leads, progress expeditiously toward closing and meet revenue requirements, he acknowledged.

“We will track things, see if the partner is progressing leads at the right speed and seeing if they are getting right revenue,” he said. “In pilots we did, some business partners loved the model and some struggled more.”

IBM is hoping that raising partner awareness to the existence of a suite of integrated cross-IBM solution-building blocks for the midmarket should help the channel achieve revenue targets. The building blocks, aimed at making cross-IBM solutions more channel intuitive and faster to market currently address three areas: data protection, business analytics and dynamic infrastructure, but more solutions sets will be coming this year.

Essentially, IBM has identified products and services from across its different product groups that best work together to form solutions that partners can craft more easily than they could in past dealings with IBM. For example, one solution block that combines to form a data protection service features Tivoli Storage Manager, System x server, System Storage DS3200 and optional financing from IBM, according to IBM.

Clay Hales, president and CEO at Chatanooga, Tenn., solution provider InfoSystems, praised the latest initiatives by IBM, calling them out as the right direction to take to enable solutions-based midmarket businesses.

“The building blocks are essential to a solutions business,” Hales said. “Solutions used to be totally incumbent upon us to figure out with IBM products. Before, we were dealing with different lines of business, which was like dealing with different companies.”

Hales said he expects the additional marketing and lead generation investments, coupled with the solutions blocks, to help his company enjoy greater profitability by lowering his costs and eliminating the need to start from scratch during every customer engagement.

Yet there’s still more he’d like to see from IBM.

“It’s such a huge undertaking to pull off solutions that I think a more complete portfolio of [building blocks] is in order,” he said.