Techaisle Blog

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

On Wednesday this week, we attended a Channel Expert Hour webinar (sponsored by IBM) and produced by Nine Lives Media, Inc. It made our Pick of the Week for three reasons:

1. Very clear statement of IBM’s Addressed Market
2. Very clear statement of IBM’s Three Tier Mid-Market Cloud Offers
3. Very clear statement of IBM’S SMB Channel Partner’s Opportunity

The format of the webinar was informal, with ongoing Q&A by channel partners and users. We started off with an overview of the SMB move to the cloud by VP Joel Raper of Azaleos, Inc., a 300+ employee, Seattle-based Service Provider focused on Microsoft UC&C Stack Managed Services (Cloud, Design, Deployment and Lifecycle Management) to the Mid-Market.

This was followed by an overview of the IBM Mid-Market Cloud Partner Program, by Ed Bottini, a Cloud Ecosystem Program Director at IBM Global Services. As mentioned, within three or four slides, it was clear where IBM saw the opportunity, what offers were available to address it and what partners could do to take advantage of IBM’s resources to sell into the market.

IBM’s Addressed Market

In typical IBM fashion, this graph represents the big picture very well: They believe half the Opportunity is SaaS growing at a compounded 25% rate, three-quarters is XaaS, compounding at ~25% - IaaS is growing at 35%. The remaining is ~25% Private Cloud and Non XaaS, growing at 20%.

This is not an acknowledgement of the IBM estimates, the point is that they see huge opportunity growing very rapidly in their base and it comes through when they talk about it. This answers WHERE REVENUE opportunity is for SMB Channel Partners.

IBM’s Three Tier Mid-Market Cloud Offers

IBM’s Cloud Solution Stack includes the Foundation layer of Servers, Networking, Storage and Secure Data, using a virtualized environment of IBM hardware, software and networking including PureFlex and Bladecenter Foundations for Cloud, along with IBM Cast Iron to integrate different clouds and applications.

On top of the Foundation is the Infrastructure as a Service layer, SmartCloud Services, which includes Pay-as-you-go Managed Backup Services, Tivoli System Management and Cloud Automation “middleware”,  Managed Security Services, and IBM SmartCloud Enterprise, which according to IBM delivers "enterprise-class public cloud infrastructure-as-a-service (IaaS)—delivers secure and scalable hosted IT infrastructure with on-demand access to virtual server and storage resources."

The top layer is the Applications Tier, Software as a service (SaaS), SmartCloud Solutions,  "a software model with applications centrally hosted in a cloud computing environment and accessed by users over the Internet."  As described in the first section, IBM has identified SaaS as half the opportunity growing at 25% CAGR; this is where the rubber hits the road. IBM has never been known as an Application Software vendor, preferring to invest in Systems Software, Database Technology, Tools, Middleware, etc. – which they have done very successfully. In addition, acquisitions over time have steadily been used to both plug holes and repurpose for gaps in applications - Cognos, CoreMetrics, SPSS and Unica being examples in Analytics, along with Sterling for e-Commerce, Merchandising and Supply Chain Management. The bold decision  (at the time) to fully embrace the Open Source movement in the '90s and leverage it with their tools like Websphere to participate in the rapid growth in web-based computing has also had a positive impact (i.e., SugarCRM). This answers WHAT SOLUTIONS offer the opportunity for SMB Channel Partners.

IBM’s Five Mid-Market Cloud Options for Channel Partners

The approaches SMB Channel Partners can choose to work with IBM is next, and  is  evident in this chart. Ranging from Tools, to Infrastructure, to Cloud Building, to SaaS Application Providers, Partners have a variety of options from which to select. This chart is pretty self-explanatory, so we won’t go into redundant detail here. This third leg of the stool is a clear view of HOW the Opportunity can be addressed by Partners.

This is not meant to be an endorsement for IBM - they are not the only Systems Vendor that 1) has a strategy, 2) has an integrated solution stack and 3) has a Cloud Partner Program. As a firm that helps companies sell more effectively into the SMB space, what appealed to us was the simplicity of the message and the ease with which the story was communicated and re-enforced using  credible, robust and tested Enterprise-level offers. In our opinion, IBM sounded a lot more like a young SaaS start-up than a hundred-year-old East Coast manufacturing company.

Postscript: When thinking through how the industry has consolidated around a few major system vendors, we wonder whether Cloud Computing strategy and execution have impacted confidence in the company?