Q&A: IBM's Business Systems Division Chief On SMB Outreach12:40 PM EST Fri. Apr. 18, 2008
Over the past several years, IBM's channel partners have criticized the company for lacking a solid SMB program. The main beef lies in how IBM has defined the SMB market. In the past the SMB program targeted companies that don't fit the parameters of the market, and sold to companies with thousands of employees.
The ensuing result was that most of IBM's attention was spent on large enterprise customers, making it difficult for partners to concentrate on small customers and provide them with the specialized support to meet smaller clients needs.
Hoping to quell partner dissatisfaction, in January, IBM reorganized its Small and Midsize Business Group. The group was renamed the General Business Group, and was split into two units: the Enterprise Business Unit and the Midmarket Business Unit.
Also in January, Erich Clementi was named general manager, Business Systems Division, Systems and Technology Group. He was formerly the general manager of IBM's Managed Business Process Services. Clementi recently talked to Everything Channel about new efforts that the company is initiating to help its SMB partners.
What prompted IBM to make changes in the SMB partner program?
For many years we've had a strict business product focus, targeting very savvy deep-pocket customers. But SMBs have told us that they want the same level of sophistication that we offer larger partners with a simpler way of delivering solutions. We have been successful in this area with the Business System Division, so we thought, why don't we go back, and approach this the same way?
IBM has said that the January reorganization of the SMB program will likely have the biggest impact on channel partners. What sort of impact do you see?
When we reorganized we wanted to focus on a client-centric model. Given the buying preferences of SMB through the channel, we are putting a huge emphasis on arming the channel with technology and sales, marketing and technical resources that they need to reach the SMB market.
IBM said it will provide partners with faster access to integrated business solutions that will be easier to buy, implement and manage -- how does that work?
The requirements of SMBs are unique, and if there's one thing we've learned through the original pilot of the Virtual Innovation Program, it's that these customers do not view themselves as a "small or medium business." (The Virtual Innovation Program provides technical development, technical training and sales support online). Instead, they view themselves by industry. We have identified sub-industry growth markets that represent a significant business opportunity for IBM systems and storage solution providers.
What do you mean by "sub-industries?"
Local labor unions, wholesalers of specialty products and even tools manufacturers and auto dealerships.
How does this help your channel partners?
While clients in these industries recognize the value of IT, they prefer to focus on their core business rather than challenges in integrating IT systems. Given their limited budgets and staff, they prefer to buy pre-integrated business solutions from local business partners, such as application providers, resellers or integrators that are pre-configured and easy to implement.
What does IBM mean when they talk about the "local" channel partners?
These are the system integrators, independent software vendors, resellers, etc. who are based in local areas around the world who specialize in providing solutions for niche sub-industries. For example, resellers who target Mercedes dealerships in Germany.
The company has said that over 75 percent of its Business Partners are teaming up with other business partners to deliver integrated solutions; how does the company identify these "other" business partners?
Our main business objective is to build the pockets of ecosystems internationally. So, what we are doing is connecting networks of various Business Partners -- VARs, OEMs, Sis, ISVs, etc., in local areas, so they can benefit from being able to partner with each other, leverage each other's industry expertise, and sell integrated solutions in vertical sub-industries.
How would you sum up the new SMB program?
This is very different than what you would have initially heard from me; before we talked mainly about technical concepts. Now, we are leveraging the channel and going to market together. We know we need to be able to deliver new solutions to this market. We also have to leverage our capability to have point of view of what solutions are relevant for this specific market.