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For ISVs and solution providers looking to make money selling solutions into the midmarket, partnering with IBM has its perks.
Steve Giondomenica, president of Chouinard & Myhre (CMI), a San Francisco-based solution provider that targets the SMB market, said that his company has seen success by teaming up LakeView Technology's Mimix high-availability software with IBM hardware, and that IBM has been hands-on in helping CMI win deals by bringing the cost barrier down.
"Let's say I have a customer that has [IBM hardware]. IBM has a program where I can sell them a second system that is almost identical to that system, but because it's only going to be used for high availability, IBM prices it dramatically [lower]. That helps me convince the customer to go ahead and buy the hardware so that I can bring in the LakeView product," Giondomenica said. "If IBM didn't help me by offering that reduced second box, it would make my rep's sale to the customer that much more difficult."
The benefits go both ways.
IBM, Armonk, N.Y., has indeed seen growth as a result of its efforts to target the midmarket through ISVs. About 70 percent of the 60,000-plus ISVs that participate in IBM's PartnerWorld industry network target the midmarket with their software products, and 220 are part of IBM's ISV Advantage program.
Revenue influenced by IBM's midmarket-focused ISV Advantage partners jumped 42 percent year-to-date by the end of the third quarter last year, with software revenue climbing 70 percent.
"The driver of spending in the midmarket for a small or midsize business is predominantly the business solution. Companies are interested in acquiring packaged software to allow them to better connect with customers and suppliers, [which then allows them] to manage accounts," said Buell Duncan, general manager of ISV and developer relations at IBM.
For IBM to succeed here, it needs "a strong network or ecosystem of business partners, particularly with ISVs that we work with to reach that opportunity," Duncan said.
IBM hasn't always been as proactive in supporting its partners, some ISVs say. "IBM has been much more aggressive in the last couple of years in recognizing the value of the partner channel," said John Siniscal, president of Lansa Americas, a Downers Grove, Ill.-based application development and eBusiness software maker. "Just in the past six months, we've done two different lead-generation campaigns with IBM that have been pretty much at IBM's initiative."
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