Channel Execs Applaud Palmisano Appointment As IBM Chairman

IBM

IBM announced Tuesday that Palmisano will succeed IBM Chairman Lou Gerstner, who will retire from the company and from the IBM board of directors at the end of this year.

"He knows the channel," said Michael Healey, president of Ten Corp., a Needham, Mass.-based IBM solution provider, of Palmisano. "It makes it easier as a business partner when you have someone like that at the top--I think he brings a lot to the table."

Healey praised IBM for its ability to offer an aggressive channel program that does not conflict with IBM's direct-sales efforts. "They really support the channel," he said.

IBM, for example, announced this week effective immediately a 90-day "triple-zero" deferral of financing payments and low-rate financing, as low as 4.2 percent on select hardware products, available to qualified customers from IBM business partners and IBM sales reps.

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Todd Barrett, networking sales manager for CPU Sales and Service, Needham, also gave a thumbs up to the Palmisano appointment.

"This is awesome for IBM, especially in this time of uncertainty about where [Hewlett-Packard is going," said Barrett, noting that Palmisano has a solid grasp of the benefits of working with the channel. "We aren't sure where we fit in HP's future. If IBM comes in and shows they are embracing the channel, it is going to be a big advantage for them. We haven't advocated IBM desktops and servers for a long time."

"Palmisano understands the value and the intangibles that the channel brings to the table, whereas someone not accustomed to working with the channel sees it as ... 'How low can I squeeze my margins to compete against the cheaper guy?' " said Barrett.

Barrett's message to Palmisano: "You have a golden opportunity to take advantage of the uncertainty with HP and the non-channel friendliness of Dell."

Rick Hamada, president of distributor Avnet Computer Marketing, who met with Palmisano at PartnerWorld earlier this year, has applauded the IBM CEO's ability to drill deep on channel issues. "IBM is obviously a massive organization and Sam has had experience in PCs and servers, and in his new role I think he understands that one of the consequences of being so big is that you cannot be everything to everybody," said Hamada. "You have to pick the spots where you are going to focus your direct resources, and then you've got to find an economically viable way for partners to help fill some of the gaps."

Sam Albert, president of Sam Albert Associates, a Scarsdale, N.Y. consulting company, said the appointment is official recognition that Palmisano is now "solely responsible for the future of the IBM Corp., and Sam Palmisano is well equipped in his new role to lead the corporation to the next level."

Albert added, "Palmisano is an executive who is committed to business partners and to their role in distributing solutions."

Palmisano's appointment comes on the eve of a major address the IBM CEO is scheduled to make before IBM customers and selected analysts and press.

Albert said Palmisano is going to detail his vision of the next wave of computing--realtime utility computing on demand. IBM is moving to take the complexity of data processing out of businesses hands and provide computing in the same manner a utility provides electricity, Albert said.

"Solution providers are invaluable in IBM's future," said Palmisano. "IBM is going to give you the solution whether it is through business partners or anybody that can add to the solution. IBM is going to be the general contractor."