IBM, HP Services Arms Hunger For Midsize Accounts

That's the question playing out in the channel as vendor service organizations, notably IBM Global Services and Hewlett-Packard's HP Services, cast a hungry eye on midmarket accounts. IGS and HP Services recently have expanded their partnering efforts to allow solution providers to use the vendors' technicians to deliver services on their behalf. But the partnering equation, VARs point out, ignores the fact that solution providers have their own service organizations that offer similar solutions.

With static growth in their traditional large enterprise accounts, IGS, Somers, N.Y., and HP Services, Palo Alto, Calif., are moving rapidly downstream into what they both view as fertile new territory. And that's where they collide head on with solution provider service organizations.

Solution providers say the conflict comes because too often vendors want them to simply resell the vendor's services in midmarket accounts for a fee and let the vendor actually deliver the services.

"IGS is really trying to create some partner linkages, but they still have a long way to go," said Vince DeRose, president of Peak Resources, an IBM business partner in Denver. "They need to streamline the processes that we both need in order to close more business. We might have a perfect fit [for a partnering opportunity], but that opportunity can't wait for a long time before we respond to a customer." DeRose noted that at the end of last year he brought IGS into a deal and it subcontracted services back to him, which he sees as a positive move toward better partnering.

But other IBM partners say they see IGS competing against them in accounts. One longtime IBM business partner, who requested anonymity, said the competitive threat from IGS could wind up hurting IBM's product business. "In SMB accounts, I find it much easier to partner with Microsoft than IBM because Microsoft doesn't have a services organization," he said.

Kevin Hooper, director of worldwide channel management and marketing at IGS, said the services organization has made tremendous strides over the past year in working with business partners to deliver services. Where a potential conflict exists, IGS wants to sit down with the partner and "see if we can't find a common ground," he said. "There's a history [of channel conflict with IGS], but I can't solve history. All I can do is solve going forward."

Don Richie, president of Sequel Data Systems, Austin, Texas, most often sells HP-branded services into his accounts. He said the best way to avoid conflict is to maintain a high profile with HP and make its field reps aware of which accounts you are in. "If they know that you are in an account and keeping their reps abreast of stuff, most of the time they will leave you alone and support you," he said. But Richie acknowledged that for VARs not selling HP-branded services, all bets are off and HP Services will actively compete with their solution providers for service opportunities in midmarket accounts. "If you are selling your own services, which would be a competing product, you'd almost expect them to go after that," he said. "The way I get around it is to only sell HP services where they perform the services and I get a fee. My services business is growing like gangbusters."