IBM Software Rolls Out Sales Incentive Plan

The Software Value Incentive (SVI) plan, to be announced Thursday and highlighted at PartnerWorld next week in Las Vegas, adds a new deal registration system to help partners put dibs on new business they bring to the table.

The triple goals are to reward value provided throughout the entire sales cycle, to offer and enforce deal registration, and to make IBM easier to do business with, said Neil Isford, vice president of worldwide business partner sales for IBM Software.

The program takes effect April 1.

A partner who finds a deal, specs out the solution, and/or fulfills the license sales will get points of margin for all of those things.

"If we discover the opportunity, develop it and fulfill it, we can enjoy a bigger bottom line and won't be in danger of some discounter coming in and undercutting us," said Troy Webb, managing partner of Incentric Solutions, a Morrisville, N.C., IBM integration and reseller partner.

He and other partners who have been briefed said total margins on deals can range to 40 or even 50 percent, depending on circumstances.

Scott Severson, vice president of systems and storage for Berbee, a Madison, Wisc. agreed that "Our issue with the software model in the past was we'd engage with the customer, and really dive down, architect a solution, spend three to 12 months, and in a growing number of situations, we'd spec out the software, but when the deal gets to the purchasing person –guess what? It goes out to bid. The model in 2005 did not recognize or reward partners like Berbee for making that [presales] investment," he said.

If a partner identifies an opportunity and registers it, IBM ensures that the deal hasn't been claimed, and notifies the partner within five days. Then, that partner will get 20 points of margin even if the software sale itself goes direct, Isford said.

IBM has had deal registration on the hardware side and Oracle has had a system in place for a few years. But there are often logistical issues. Oracle VARs complain of instances when they register a net new opportunity at a given company, only to be told that Oracle has a pre-existing relationship with that company that nullifies their registration. Isford says in IBM Software's case, there are no "house accounts."

"Our system is open to customers of every size. The partner may register an opportunity at Citibank and we will check our CRM system to see if we are working on that deal. If we are, the partner will not get the 10 points for identifying the deal but can still get points on the sale," he noted. "Or the IBM team may be in Citibank but not know anything about that particular opportunity so the partner would get the points for identifying it."

IBM, like Microsoft, is trying to figure out a way to protect and build profitability for a bevy of partners including small resellers, large integrators that may not resell software and large account resellers with expertise in license fulfillment and software asset management but not a ton of vertical applications expertise.