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IBM empowering partner ecosystem to co-create the future

Enablement, execution, empowerment and experiences are the unwritten principles driving the entire IBM partner team in transforming the rules of partner engagement. At the recently concluded IBM PartnerWorld at Think conference in San Francisco, the term partner ecosystem was emblazoned across the entire IBM partner leadership team. Techaisle data shows that channel partners are faced with balancing investment in depth vs breadth and increasingly turning to a larger ecosystem for partner-to-partner collaboration. Between 2014-2018 there has been a 69% increase in opportunistic partner collaboration for sales. By using the power of artificial intelligence (AI) to empower its partners, IBM is formalizing partner-to-partner collaboration and ecosystem, named IBM Business Partner Connect, built on Watson.

With an instant match capability, IBM Business Partner Connect has been designed to accelerate solutions for end-customers by matching partners looking for assistance with partners offering expertise. Business Partner Connect also allows partners to join the business partner Slack community to share best practices and find new partnership opportunities. In its pilot stage, approximately 800 partners participated, which unveiled 300 matches.

Enablement to Empowerment

In the current channel world – where core business conditions, market opportunities and requirements are all in flux – an opportunity to provide relevant guidance, targeted business advice from IBM, plus peer-level input, is an enormously important and valuable capability. Partners need guidance to transition through current market and business changes and a community is an appropriate context for this guidance, and leading the community will be IBM at the center of this dialogue/activity. Over time, Business Partner Connect and the community platform will give IBM the ability to involve a large number of partners, increase IBM’s centricity, and provide a revenue line into the channel operation.

It is quite evident that a key factor in IBM’s partner program’s momentum and transformation has been John Telstch’s leadership and his own ecosystem of senior leaders (Carola Cazenave, Jacqueline Woods, Catherine Solazzo, Chris Oliver, Jamie Mendez, Ken Gregory and Rose Nunez). He has been listening, responding and committing to having the channel partner’s back. Techaisle’s latest study of channel partners shows that 52% of partners want their vendor partner channel chiefs to be setting a clear overall strategy and 44% value trustworthiness and accountability. John gets a check mark on both these value traits.

Vendor organizations usually focus on simplifying drivers of channel enablement, but IBM is consciously extending enablement to empowerment to deliver customer success. Enablement (usually incentives) is a short-term lever to change immediate partner behavior for achieving sales quotas and revenue targets. Regardless of addressing short-term objectives, it is necessary. In Techaisle’s study, 50% of partners mentioned that incentive programs are important for marketing and sales. Empowerment helps partners transform themselves from a vendor’s sales agents to sales advocates especially when increasingly partners are focusing on business outcomes with hybrid/as-a-Service delivery solutions and shared-risk partnerships. IBM has spent the last one year in understanding the present and is working consciously and furiously in shaping the future.

Simplifying partner experiences

Partners are challenged by the wrenching, organization-wide change that cloud demands. Cloud is forcing new metrics and disciplines on management, which has historically worked to maintain sustainable per-deal margins on individual current transactions. It is requiring sales staff to sell differently – stressing recurring-revenue, OPEX-heavy ‘pay as you go’ contracts over larger one-time product transactions – and it is requiring sales management to compensate staff differently. Finance is needing to deal with a far more complex set of cash management requirements, needing to understand the valuation impact of different revenue recognition approaches. In the cloud, marketing’s role is becoming larger, and its tools much more sophisticated. Even technical skills requirements are changing as channel delivery staff is evolving from ‘just in case’ knowledge to ‘just in time’ skills acquisition that can respond to the rapidly-changing environment. Techaisle finds that some partners are working through this transition, but many, especially in markets where cloud has not caused large year-over-year decreases in product sales, are trying to navigate a path that does not include top-to-bottom change. These channel firms will be under intense pressure when the market increasingly demands that partners support migration to and efficient use of hybrid infrastructure. IBM has bet its future on being a differentiated supplier for multi-cloud/hybrid environments, holistic AI, security and analytics. Its partner organization is also following through to support and reward partners. 

On-boarding training, or a rapid ramp-up of new partners, is important to both sales/marketing and technical professionals within partner organizations, and should be prominent in the vendor channel marketing ‘toolkit’. IBM has improved its partner on-boarding process which has reduced the time from several months to less than a month. In the last year, 13,000 net new partners joined the IBM partner ecosystem. IBM has also reduced partner contract terms from a voluminous 18 pages to 4. IBM is extending its Try and Buy program for partners and allowing them to maintain ownership of opportunity.

Sales and co-marketing

Beyond all of the technology-driven change that the channel is adapting to, there is a shift in how customers are acquiring IT solutions. SaaS has shown buyers that they can acquire IT capabilities that map directly to business needs – they no longer need to take on the risk and uncertain time-to-benefit inherent in the purchase, integration and deployment of building-block technologies. At the same time, IT budget authority continues to migrate from IT gatekeeps to business managers who view technology as a means to achievement of process objectives, rather than as an end in itself. Both trends affect channel sales and marketing professionals. Within customer organizations, the key buyers are often non-IT professionals who are looking for suppliers to respond to business pain points with approaches that directly address the business requirements, rather than with traditional product-centric ‘some assembly required’ solutions targeted at IT buyers. The ability to talk credibly to business outcomes vs. technology issues has become the key to selling solutions in today’s market. Most channel firms lack business-savvy sales staff. Over one-third of partners want access to market data and nearly 40% need information about market opportunity. IBM has not only launched Bluemine (a repository of market research and analysis) on their Partnerworld portal but is also launching a new sales enablement tool on Seismic with relevant content for the partners.

Lead generation and marketing is always a hot topic. Techaisle data shows that support requested by partners runs the sales process gamut from prospect identification (provide sales leads, 50%) to delivery of post-sales support (52%). In 2013, over 60% of channel partners relied on referrals from customers to generate leads and over 50% relied on their vendor partners to generate leads. In 2016, the process of lead generation became distributed across several different “channels” and the trend continued in 2018. Channels are still struggling to generate leads from social media. IBM’s Business Partner Connect and MySA tool aim to alleviate some of the pain points associated with lead management. In 2018, MySA generated over 80,000 sales opportunities.

IBM is also streamlining its co-marketing initiative specifically for third-party marketplaces, embedded solutions and SaaS offerings. Marketing support and lead generation (collectively, GTM enablement) are generally the most important aspects of a channel relationship. Increasingly, a combination of digital discovery and opportunity development – as a process, IBM wants to be effective at multiple levels to exercise leadership in partner relationships. Techaisle believes that IBM needs to build awareness of and preference for IBM-centric solutions to business issues. This will definitely involve development of long-tail, compelling content, plus strategies to make this content visible online. Techaisle research shows that buyers are typically more than 50% through a purchase decision before contacting a vendor, so pre-approach influence is critical. IBM’s co-marketing initiative must include processes for providing in-market support to partners by including both relevant sales collateral and effective field marketing and sales support as well as ecosystem product access. This requires excellence at two levels: 1/ establishing credible offerings within each layer, and 2/ establishing a process that connects these offerings together in a fashion that appears seamless to customers, and reasonably seamless to partners.

Elephant in the room – Red Hat

The Elephant in the room is the potential for IBM’s global partner community to develop new opportunities for Red Hat technology. Since IBM divested itself of core platform technologies, it and its partners have struggled to gain traction beyond relatively narrow niche solutions. There is now potential for IBM partners to expand their influence within their customer accounts by positioning Red Hat as the key to building a platform for hybrid service delivery. It is highly likely that IBM will embed Red Hat tools within the strategies of its partners and will begin to establish a base for advanced solutions in highest-priority market segments: cloud, cognitive/AI, mobility and emerging technologies (e.g., Blockchain). It is also possible that partners will be able to spearhead midmarket sales, driving Red Hat/IBM success outside the enterprise. The Red Hat acquisition has opened a door that looks onto the future. IBM has assured its partners that work is being done for the vision to grow roots and expand to contribute meaningfully to success throughout the entire IBM/Red Hat partner ecosystems.

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