IBM is aiming for the channel to account for 50 percent of data warehouse appliance sales from its Netezza operation within four years, an IBM executive said Tuesday, a major shift from Netezza's near-total reliance on direct sales before IBM acquired the company in November.
At Netezza's annual customer conference in Boston this week IBM made it clear that Netezza is a key element of its business analytics strategy and Netezza data warehouse appliances will be a major component of business intelligence product channel sales. IBM also is aggressively recruiting solution providers to resell or work with the Netezza products, including existing IBM partners and new partners.
"I think this gives us an avenue to a segment of the market that we weren't able to approach before," said James Baum, Netezza president, in an interview. Baum was Netezza CEO before IBM bought the company in November for $1.7 billion.
IBM has identified business analytics as one of its strategic initiatives and has forecast that business analytics and optimization products and services will generate $16 billion in sales for the company by 2015.
Netezza, founded in 2000, initially had plans to sell through the channel, but ultimately focused almost exclusively on direct sales to large companies, Baum said. While the company had some 300 partners, those were mostly technology and ISV partners and systems integrators. Baum said the appliance model is better understood today by the channel and there are more solution providers with deep expertise in business analytics.
In January IBM outlined its preliminary channel plans for Netezza. IBM is positioning Netezza as a new element of its data warehouse product lineup, which includes the InfoSphere software and its Smart Analytics turnkey systems that bundle IBM hardware, software and storage into data warehouse packages. Netezza serves as a more plug-and-play appliance alternative to the Smart Analytics offerings.
The number of solution providers and resellers working with Netezza today remains relatively small, said Rob Thomas, vice president of business development, information management channels within the IBM Software Group, in a presentation at this week's conference. Of those that have begun working with Netezza, about 80 percent are already IBM partners and about 20 percent are new.
IBM has been developing a Netezza channel initiative within its Software Value Plus program under which channel partners must be authorized to resell IBM products. That includes having at least two employees who have passed a Netezza technical mastery exam and one who has passed a sales mastery exam. IBM began offering those exams in April and June, respectively, and launched a technical boot camp in May. An IBM certification program for Netezza specialists is in the works.
"As we build up the channel for Netezza, this will be a massive differentiator," Thomas said of part certifications and the IBM resources behind it. "We want to build a channel that in four years will account for 50 percent of Netezza's sales."
Currently IBM is operating Netezza's partner efforts in parallel the Software Value Plus program with the formal transfer of all contracts to the program expected later this year, Thomas said.
At this week's conference IBM unveiled the IBM Netezza High Capacity Appliance, a new addition to the top of the Netezza product line. The product is the first to be added to the product line since the acquisition. Netezza's existing products, the entry-level Skimmer and mid-range TwinFin, have been renamed the IBM Netezza 100 and IBM Netezza 1000, respectively.
IBM also has been linking its other business intelligence products with Netezza. At the conference Baum said elements of IBM's SPSS data mining technology have been integrated with Netezza analytics. And the 10.1 version of the Cognos business intelligence software released last week can tap into the Netezza system.
Also at this week's conference a number of IBM executives, including Baum and Steve Mills, senior vice president and group executive for software and systems, indicated that IBM intends to adopt the Netezza appliance model in other areas of the company's software business, possibly including messaging and security.
"One of the goals is to come out of [the Netezza acquisition] with a much broader appliance model for IBM," Baum said. "Appliances are about simplicity [and] appliances are going mainstream. It's kind of neat to be teaching IBM how to do this."