IBM wants to extend the “halo effect” of its Smarter Planet marketing campaign out to the channel.
At the IBM PartnerWorld Leadership 2013 Conference this week IBM is doubling the rewards it gives partners for closing leads generated by IBM, while increasing the quarterly payout for partners certified on IBM hardware by a factor of three.
In addition, IBM is making analytics applications based on the company’s Cognos software running in the cloud available to solution providers for free for one year. IBM is also making a host of IBM Smarter Commerce applications available free for the internal use of solution providers certified on those products.
IBM channel chief Mark Hennessy says solution providers current account for about half of 2,500 Smarter Planet reference accounts that IBM has developed. Hennessy says that by investing in five core areas IBM channel partners will be positioning themselves to participate in high-margin Smarter Planet opportunities that span analytics, social networking, Big Data, Smarter Cities and Smarter Commerce platforms, mobile computing and cloud computing.
IBM expects analytics revenue to grow by seven percent through 2015, while social network will grow eight percent. Smarter Commerce and Smarter City revenues are expected to grow 13 percent, while Big Data, mobile computing and cloud computing will each grow 17, 18 and 22 percent, respectively.
Hennessy says IBM expects to the IBM partner community to move into higher value spaces that combine hardware and software sales as part of the overall convergence trend in IT. Accomplishing that goal will require partners to lead more with business consulting services that focus on the business benefits of a particular technology solution as opposed to merely selling IT products and services. Accomplishing that goal will require partners to focus their sales efforts more on C-level executives such as the chief marketing officer within an organization, says Hennessy.
As part of that trend, Hennessy concedes the size of the overall channel may get smaller as solution providers move to acquire additional expertise or move into new markets by acquiring other solution providers.
IBM is particularly focused on improving the quality of the leads it shares with partners while at the same time investing in programs that help partners drive their own leads. IBM, which spent $150 million on demand generation programs last year, says that those efforts have already led to a 33 percent increase in pipeline creation, a 25 percent increase in yield and an 18 percent increase closure rates.
IBM counts 130,000 companies in its channel program, 13,000 of which have been recruited in the last year. Of those new recruits 60 percent of them are from emerging markets. IBM has also made available $5 billion in financing to partners, and that partners that avail themselves of that funding have a 36 percent higher close rate than those that don’t.
There’s no doubt IBM’s vision for transforming the channel is going to take some time to execute. But what is for certain that partners that succeed on a “Smarter Planet” will be less susceptible to the vagaries of commodity IT products that might generate more sales volume, but not nearly as much in the way of actual profits.