IBM Plans To Tie Utility Computing Effort To Solution Providers

IBM Tuesday said it is investing heavily to certify thousands of new solution providers on IBM software products to make the utility computing vision a reality.

Furthermore, the computer giant is planning a series of Express products aimed at the SMB segment in 2003. The company this week launched its WebSphere Express, a version of its application server priced and tailored for the SMB market.

"Partners are going to be crucial in delivering our 'on demand' vision," said Mark Hanny, vice president of worldwide ISV alliances and go-to-market operations, at an IBM briefing here. "The key thing for partners is that as customers move over to this model, it creates a lot of opportunities."

As part of the utility computing initiative, IBM Tuesday added a new Center For IBM Software program to boost IBM software certifications among solution provider partners.

IBM also is beefing up its Start Now Program for e-business solutions, which has 957 companies worldwide that have a total of 2,685 certifications. IBM Tuesday added business process integration and portal certifications to the Start Now Program.

Hanny said solution providers that have five or more certified IBM software professionals have tripled their sales and quadrupled profits. Gross profit margin for these IBM partners is a whopping 33 percent, he said.

As evidence of the big opportunity in the SMB market, IBM said 54 percent of all the dollars spent on IT come from an estimated 400,000 companies worldwide that have 100 to 999 employees.

In the past year, IBM has increased the number of IBM software certified professionals in the channel by 50 percent to 11,000 certified professionals, said Hanny.

Overall, he said IBM added 3,700 new partners this year. The company's Top Contributor Initiative now has 2,000 partners worldwide, and they contribute 75 percent of IBM's revenue in the SMB segment, said Hanny

IBM now has 2,000 support representatives focused specifically on the SMB market, he said. Of IBM's 90 plus strategic ISVs, more than 50 percent are in the SMB space, he added.

Hanny said existing rules of engagement will apply to the utility computing offering for the SMB space. "It's no different than what we're doing today in the market," he said.

"ISVs see Microsoft's move into the midmarket as a major threat. IBM, in contrast, is teaming with its partners," said Les Wyatt, a senior vice president at J.D. Edwards, a midmarket software maker.

The IBM push to partner with solution providers in the SMB market comes as a number of solution providers are complaining that Hewlett-Packard is competing with them in that market.

Ken Klika, a network engineering manager at BCG systems, an Akron, Ohio-based Ingram Micro VentureTech member, said he is shifting his business to IBM.

"IBM is more channel-friendly," Klika said, adding that the company has been more proactive and responsive to BCG's needs. "For HP to say we're no longer important business partners because we don't have $10 million in sales downplays our role as a trusted partner."

Klika said IBM has recently proven its commitment to SMB solution providers with a number of special programs. As an example he cited IBM Global Services' pact with Ingram Micro's VentureTech Network group of solution providers.

"We're getting a lot of feedback and response from IBM," he said. "We used to get that under Compaq, but since the merger we feel like we've fallen off HP's map."

JEFF O'HEIR contributed to this story.