IBM Channel Chief: No Shrinking SMB Channel

Despite CRN research showing that the number of IBM partners selling servers and storage is shrinking, IBM's global channel chief said IBM's SMB business with solution providers is in fact growing.

In a CRN survey of about 200 solution providers conducted in June 2006, 25.3 percent said they were currently selling IBM servers, storage or security products. But in an April 2007 survey, only 15.7 percent of those SPs surveyed said they were selling IBM hardware.

And a CRN online poll conducted this week showed that 68 percent of the solution providers polled said their IBM business was down or flat year to date.

Ravi Marwaha, IBM's general manager, global business partners told CRN, however, that the fall off in the number of partners selling IBM products could be misleading. "Our business in SMB is in fact doing very well," he said. "Hardware grew 7 percent [in IBM's second fiscal quarter]. Within that SMB grew, and business partners do somewhere between 85 and 90 percent of our hardware business in SMB. As you think about these lower numbers [of solution providers selling IBM], our business is in fact growing and our growth rate is accelerating over time."

Marwaha acknowledged that IBM lost a number of SMB partners when it sold its PC business to Lenovo more than two years ago. "We are in a little bit of transition when we look at an absolute number of partners, and that is because we came off a period where we had a lot of PC partners. We sold that business to Lenovo and over time partners who were very significantly PC and had a low performance in servers over time ended up not being certified, extended, etc."

He said, however, that IBM is now in a recruitment mode in an effort to attract more SMB partners as it seeks to double its share in that market over the next ten years. He said that IBM added 750 business partners worldwide during the second quarter, 193 of which were added in the U.S. An IBM spokesman said the vendor also added 190 revenue-generating partners in the U.S. during the first quarter.

Marwaha added that IBM earlier this month streamlined the authorization process for distributors to sign up new solution providers who want to sell IBM Express hardware offerings. He said new solution providers could now be IBM authorized in as little as 24 hours.

"Some business partners clearly work very well with us and our offerings and some have chosen not to," he said of the ebb and flow underway in IBM's channel. "They will come back as we grow our business. But if they have chosen not to, that's the way life is and that's the way a free market works, I'm not particularly worried about that. What I'm really worried about is that the people who work with us feel that it's a good experience and their business is prospering and more importantly, what can we do in order to do better."

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