VARs: IBM Taking Over ELA Deals

When it comes to Enterprise Licensing Agreements (ELAs), several large software resellers complain that IBM has taken direct deals the solution providers had conceived and nurtured.

"They've deprived the channel of tens of millions of dollars easily in [individual accounts where people like us have been doing all the ground-level work," said an executive at one large software reseller, who requested anonymity. "In their effort to sell up, [IBM rolls the accounts into ELAs, which are then taken direct in many, if not all, cases."

IBM Global Services (IGS), the services arm of IBM, figures prominently in most of these complaints. Resellers disagree with IBM's claims that its product groups treat IGS as just another integration partner. "To me, IGS and IBM Software are one and the same," the executive said. "It's all IBM . . . and they're competing with us."

Mike Colleary, IBM's vice president of software channel sales, said IBM is committed to its value-added partners and insists channel conflict has been reduced. "I've heard an occasional complaint about IBM taking things direct, but those [moves by IBM are customer-driven."

But even Colleary admitted that "you always hear about conflict with [IGS."

He and partners alike contend that IBM has fostered good relationships in the SMB space. The major conflicts arise in large accounts, where ELAs are a factor, many sources said.

Roger King, president of product services at large software reseller Software Spectrum, Garland, Texas, said some level of conflict is inevitable. "From time to time,and I'm counting on the fingers of one hand,some deals ended up direct, but that's life in the big city," King said.