Gearing up for 2002, IBM hopes to build on its partner relationships
As IBM rolls into a new year, the company hopes to build on the strengths it established in 2001, particularly partner relationships. To that end, Peter Rowley, general manager of IBM's Global Business Partners unit, has been working on plans for the channel, while taking some time to look back at his first year on the job.
The three reasons IBM had a relatively good year in a tumultuous economy are its strategy around e-business, strong and fair relationships with its business partners and excellent products, Rowley says. "Lou Gerstner was very focused on using the technology around customers, and making sure that if they do something out on the Web, that it's integrating into their legacy systems," Rowley says.
IBM's alliance strategy with its partners, particularly software vendors, has also paid off, he says. In the summer of 1999, IBM executives decided against pursuing the application-software business inside the company. Rather than developing applications for various vertical markets, IBM aligned itself with software vendors. "It's such a fragmented marketplace,it's so specialized and it moves so quickly,that we're better off allying ourselves with the software vendors," Rowley says. Such a move certainly helps the sale of WebSphere and DB2, and that's why WebSphere is outgrowing its competitors and DB2 is outgrowing Oracle, he says.
"We're trying to become the world's best provider of middleware, but we are not trying to become the world's best provider of ERP systems or CRM systems or business intelligence systems," Rowley says.
While alliances with software companies are one way to generate revenue for IBM, they can also lead to more opportunities. For example, if Siebel were to license a new product, opportunities would abound for IBM in hardware, other software and services.
"I will never tolerate a discussion with anybody who says the industry is not growing," Rowley says. "We're a trillion-dollar industry. There are always going to be elements of a trillion-dollar industry that are going to be growing at double digits and elements that will be growing at less than that."
But the challenge, Rowley says, is that it's up to him and other top IBM executives to determine which areas will grow. He notes that the CRM market, despite some levels of customer dissatisfaction, is still growing, as is ERP integration. "SAP is doing well around the world, and despite its recent faltering from excessive growth rates, Siebel is still growing," Rowley says.
IBM's relationships with its partners remain strong, he says, mainly because of open communication regarding any changes within the program and the identification of conflict within the channel. IBM's business partners tend to deal with various groups of the large organization and Rowley is hoping his work creates cohesion among those groups.
There are, according to Rowley, four groups (or tracks): software, systems and services, personal systems and developers. "I think you're going to find the relationships with the four tracks are going to get closer and closer, so the business partner who's a member of multiple tracks will see more consistency from IBM," Rowley says. And solution providers are noticing the changes, as proven each year by VARBusiness' Annual Report Card (ARC). In recent ARC surveys, IBM has steadily improved in "ease of doing business."
"The biggest thing we tried to do [last year was extend our portfolio of partners to include software vendors, systems and Web integrators and software resellers, who, I think, are the true generators of demand," Rowley says.