IBM Goes Out Of Its Way to Lend Partners a Hand

Such is the sense of urgency permeating through the IBM organization these days. Maybe it's the impending arrival of Sam Palmisano, IBM's new president and CEO. At PartnerWorld, the atmosphere was one of "Let's make a deal." A few thousand business partners gathered with what seemed like an equal number of IBM employees. IBM executives were doing everything they could to give this partner a field rep, or that partner added incentive or help in closing a sale, or to bring two partners together to help solve customers' problems. Although the show lacked hard news, it made up for that in soft maneuvers, such IBM Global Services' pledge to partner with solution providers and stay out of accounts with sales of less than $500 million. While some resellers applauded the move, others were less than eager to partner with IBM's huge integration arm, which recently closed a direct deal to sell 40,000 PCs to Kodak. Some of the activity almost compensated for the scripted, wooden behavior of more than a few IBM executives who presented to business partners. Some of these executives can actually make Al Gore look hip and loose.

Channel executives in attendance seemed committed to providing Palmisano with a honeymoon period,even if it's a short one. And they're willing to go so far as to sell Oracle databases running on Linux sitting atop midrange servers. In addition, Peter Rawley, who heads IBM's centralized PartnerWorld channel support and marketing organization, entertained some 25 new IBM partners, who were evaluating the company's play in wireless, life sciences, e-business and middleware offerings, despite their ties to rival vendors. That's what drew integrators to this forum, including John Sheaffer, president and CEO of Sysix Technologies, a Westmont, Ill.-based solution provider that generates only a relatively small percentage of revenue from IBM.

But behind closed doors, many IBM executives say they smell blood. For example, some of the company's top executives believe they can inflict a serious and, perhaps, lethal blow to Sun, which IBM seems intent on pounding into submission by cutting into its revenue stream. That would undoubtedly hurt Sun's ability to fund its R and D efforts for its proprietary chips and OS. Also on IBM's hit list: HP and Compaq,distracted by their impending merger,as well as Intel and Microsoft. Remember that, just a few years ago IBM's PR machine wouldn't even allow executives to comment on specific rivals' strengths or weaknesses.

IBM has other challenges on its plate today. First and foremost is its poor position in the PC market, where it intends to focus on high-value specialized solutions in wireless and security. The alternative is to engage in a prolonged price war against Dell in the commodity business. Second is its confusing channel strategy revolving around Tivoli, Lotus and IBM middleware software, a strategy nearly every IBM executive says is in need of surgery. It may be a footnote to its overall product portfolio, but IBM faces an uphill battle in the printer market, where at least one high-ranking distribution executive told me he was unaware IBM was even a player.

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