IBM Software VARs: Get The Riffraff Out!
But some worry whether they will be able to meet the new technical and sales certification requirements IBM will require for all software resellers starting in October. And some volume resellers that provide little in the way of value-add services could be in for trouble.
"We're very bullish on this whole thing. In the short term, it's going to be a lot of work. But in the long term it's going to help us," said Toby Banks, software sales director at Toronto-based Softchoice Optimus Solutions. While he was confident his company could meet the certification requirements for almost all the IBM software products Softchoice Optimus carries, he added: "We're not at 100 percent and I don't know if we're going to get to 100 percent."
Last month, IBM informed the approximately 100,000 solution providers that sell IBM software that it is switching from an uncontrolled distribution plan, under which solution providers were free to resell the company's software products after doing little more than registering as an IBM partner, to a controlled distribution plan with new certification requirements.
The change applies across all of IBM's software product lines, including WebSphere, Tivoli, Information Management, Lotus and Rational software. IBM channel executives said the "Growth Through Skills" initiative, known as "Tuscany" while the program was under development, is designed to ensure that channel partners have the skills to add value to the software they are selling customers and are not simply moving products.
"I'm actually rather encouraged by it," said Stan Duda, executive vice president of sales and marketing at Alpine Consulting, a Schaumburg, Ill.-based solution provider. "We're increasingly running into the issue of keeping the margin in a deal," he said, noting competition from low-cost resellers.
"This really is where IBM would like its partners to go. It keeps out the riffraff and the people who don't understand the solutions," Duda said. Poor implementations of IBM software and dissatisfied customers hurt all solution providers in that market, he added. "This affords us more margin in the long run."
"We view it as an opportunity," Dave Kemper, a managing partner at Dataskill, a San Diego-based solution provider, said at the time of the IBM announcement. "Many times partners sell [IBM software] as a commodity or don't recommend the right software. This program will ensure that the right skills are used in the sales process and on the technical side to make sure a solution is deployed properly."
One partner who asked not to be identified, however, said he has received calls from several other resellers who are nervous about meeting the certification requirements. "There's a lot of people freaking out about it," the executive said. The change also could lead to decreased sales of IBM software overall when the certification requirements kick in and push some potential customers to competing products.
Duda said the new distribution restrictions could also eliminate situations where a solution provider stumbles across a sales opportunity outside of their core business. Without the needed certification, they won't be able to close such deals.
Banks said the new distribution plan could have the most impact on volume resellers, such as Software House International and Dell's ASAP Software subsidiary, that provide few implementation services. "This allows organizations like us to compete more fairly against software houses that have been competing against us on a very, very cutthroat percentage," he said.
Under the new plan IBM created 14 categories of software products in which solution providers must have at least two technical employees certified by IBM to work with those products and at least one sales representative that has passed IBM's "sales mastery" test for those products. IBM software resellers are now evaluating what skills they have in-house to meet those requirements and where they need additional training.
Dataskill sells software from 10 of the 14 product groups and at the time of IBM's announcement Kemper said the solution provider already met the certification requirements for five of those groups. The company is making plans to train employees and hire expertise from outside -- increasing headcount in technical areas by 30 percent and in sales by as much as 50 percent.
Banks said Softchoice Optimus already has some 60 to 70 certified employees covering about 98 percent of the company's IBM software-related business. He said there's one product area the company is at "medium-risk" of not meeting the certification requirements and one at "high-risk." Because the company is based in Toronto, Banks said it has to get certifications in both the U.S. and Canada. "For me, that's very expensive."
Several IBM software resellers also raised concerns about the cost of the training partners need to get certified. IBM didn't announce a formal program to cover those costs, but at the time of the announcement, Salvatore Patalano, vice president of business partner program sales in the IBM Software Group, hinted the company would be assisting partners with training expenses. "You pass, we pay," he said at one point during an interview.
Banks said IBM has been offering discounts for some training, such as for Tivoli-related classes at last month's Pulse conference in Las Vegas, and vouchers to cover fees for certification tests.