On the very day when IBM's outgoing and new channel chiefs were explaining their new roles internally, VARBusiness and sister publication CRN reached out to get the lowdown on the significant changes under way at Big Blue. In a joint interview, Mike Borman, IBM's former general manager of Global Business Partners, and Donn Atkins, the man who now takes his place at the helm of IBM PartnerWorld, outlined the rationale behind the changes there.
Atkins, the former vice president of worldwide sales and marketing for the IBM Software Group, say major changes won't be coming to PartnerWorld. But, obviously, there's more going on inside IBM than meets the eye. This is especially true after last week's earnings announcement, which, despite strong quarterly gains, indicates softness in certain parts of IBM's business, software especially. Here, Borman and Atkins explain why and how their roles are changing -- moves that already have partners talking. Rick Kearney, president and CEO of IBM partner Mainline and the 2004 VARBusiness VARBusiness 500 CEO of the Year, tells us the time had come to shake up certain parts of IBM, especially the software business. New blood could lead to some new thinking, he suggests.
CRN: Who made the call to shift the top channel positions, the Borman role over to Atkins? In addition, take us through the basics of when the changes take place and what we can expect below that.
Borman: To answer your question, I'd say it was a joint decision by Steve Mills [senior vice president and group executive, software], Bill Zeitler [senior vice president and group executive, IBM servers], and Doug Elix [senior vice president, sales and distribution]. As far as it pertains to the channel, I am moving over to be the general manager of the iSeries brand, working for Bill Zeitler. It's a brand that is very important to IBM and it's also, based on the channels experience and the SMB experience I've had, [a big layer there]. We do about 85 percent of that business through the channel. So I think the synergies match very well there.
VB: One question about that role: It doesn't seem that that brand is growing in terms of channel acceptance or partners. It's sort of a closed community that has settled on that. That was one of the questions I had: Why take a guy who was running the entire partner program and put him in sort of a closed-off area, so to speak?
Borman: If you looked at the technology announcements we have made, [note] we announced our Power5 first on iSeries. It has, as you probably know, an [option of] multiple operating systems that you can run along with Windows and OS/400. So it has a variety of operating systems, and we're positioning this as a very important platform for IBM. It has been, and in the future we want to keep it growing. It's important to IBM and I am delighted to have the opportunity to go back in. I spent some time in the systems group before. I was with the Unix team, with the pSeries guys. And so I know many of those guys working for Bill Zeitler and I am actually excited about this opportunity.
VB: So, is one of the tasks there to grow the acceptance in the partner community around iSeries beyond what it is today?
Borman: If you talk to partners that sell iSeries and customers, they love the box. Right? They just love the box. So, what I want to do is take the technology that we announced, this leading-edge technology, and help get it widely accepted in the marketplace. I think we have a great opportunity here. Our technology here, as you guys know, just by some of the awards the VARs have give to us in terms of iSeries, midrange server awards and [CRN's] Channel Champion awards, it's still thought of as a leading-edge product.
VB: What else?
Borman: With that [change,] we announced that Donn Atkins was going to take over as general manager of IBM Global Business Partners. And Donn has a wealth of experience with sales and distribution. So, I'll let him comment on what he brings to the channel here.
Atkins: So, I had a really great job, too. And I got this call that said, "How'd you like to come and take an even better job?" I was pretty excited. I know we have had a chance to talk about the important of channels while I was at my previous job in software. This is something, as I was working the go-to-market strategy in software, that was a big part of my play around the whole ecosystem that we were driving around partners in our software business. So the opportunity to come over and take a leadership role and build upon the work that Mike had done with PartnerWorld was a natural for me. Secondly, as we look at how customers are looking at solutions, this was another complementary set of capabilities. The final thing is, as Mike said, even before my days in software, I ran Latin America for IBM. As you know, that's an example of a geography with multiple countries, smaller ones and larger ones, where partners play such a key role. So I am excited in that I bring a lot of experience from different aspects of the company and [partners] is a place where I've been putting a lot of my energy. I'm really excited to be working with our partners, customers etc.
VB: A question in general about the software group: Q2 sales were flat to poor in some instances. Where are the soft spots? What's going on if you sort of evaluate what you think are the issues at the moment, especially in the middleware brands with Tivoli and Lotus?
Atkins: I'd really prefer to have you talk to my replacement, John Swainson. We talked about our software business. Clearly, there were bright spots among a number of our brands. We thing our strategies are really taking a hold. But, again, I'd really prefer the comments from software to come from the software group guys.
CRN: Should people infer as VARs that a software guy coming over to channels that maybe there's a signal here that you guys should lead more with software than you do today and that that expertise will translate over?
Atkins: The marketplace and our customers are going to dictate what the lead ought to be. We have some wonderful relationships around all parts of our product line. To the extent that it makes sense to look at combinations of our products and services, then we want to be able to support that. Clearly I'll bring a set of links from the software group. But I want to come back to the fact that I am picking up something from Mike that is working pretty darn well. And my intent is to build upon the success we have had with Partner world, continue to refine it and drive it to even more success.
VB: Along those lines, one of the things the partner community tells us is that they love consistency and certainly reliability from their partners, and any time there is personnel change that upsets the apple cart and the flow of things. What are you going to tell partners amid a backdrop of changes going on at HP, Sun and other major channel organizations?
Atkins: Well, it's kind of interesting because Mike and I have been spending a lot of time calling on partners this afternoon. And the reality is that even though we are changing a few chairs here, these are people who I have been working with, too, in a lot of jobs, clear back to my OS/2 days. I have a lot of relationships that we are building upon. I agree that if this was somebody completely new to the partner community that that might be a bigger turmoil. But I would tell you that I think most of our global partners I have [already] been dealing with directly in a number of jobs and I plan on building on the stuff we have been doing together.
VB: How many of your subordinates will be coming you? Is that likely to be a large number or will they merely stay in their current roles and just you guys switch?
Atkins: In my case, I have an organization in the software group that will stay and continue to work in the role they had.
Borman: Typically, we leave the teams in place because as you go over, the teams [are what matter]. We typically get some of the credit, but the teams do all the work. I need the team that's been there doing the work for iSeries to stay there. A lot of the people from the partner side from Angelica, for example, will stay in place.
Atkins: The other thing that plays well is that Mike and I have been working together for two years. So it's not like we are introducing ourselves to each other; we have been working together as an integrated team on this play. I know his team very, very well and don't expect there to be any start-up time.
VB: It seems like the changes impacted channels, hardware and software. The one piece of the puzzle missing here is services. Anything we should know about potential movements in or out of the services group that you guys know about or might be involved in?
Atkins: The changes we have talked about are really the extent of them.
CRN: Who made the call and when did you hear about the changes?
Atkins: I'll tell you the truth, I was in a meeting with Elix, and Mills was in the building, so I got to talk to both within three minutes.
CRN: What was your first, initial or gut reaction?
Atkins: I couldn't believe Borman was giving up this great job. [laughs]
CRN: Speaking of that, though, your competitors will be out there in the world and going to say moving from the head of the august channel group to the somewhat unknown iSeries effort is a demotion. How are going to spin that or what are you going to say to those guys?
Borman: I'll let the competitors say whatever they want. The truth is if you look back, the iSeries is one of the best franchises in the entire industry. Windows is one of those. Intel is one of those. DEC has one of those, and then it sort of got absorbed. The iSeries has just been one of the best franchises. I'll let the competitors spin it however they want. This is very important to IBM and I am actually delighted to go work with the systems group team again.
Atkins: Mike and I have been working together for a lot of years at IBM and a lot of different jobs together and it's a great working relationship.
VB: When will the changes take place?
Borman: I think they are effective immediately. And we just announced this to our teams [today]
CRN: Do any of the reporting relationship changes? Mike, you reported to Elix. Now Atkins will report to Elix?
Atkins: That's correct.
CRN: Any changes in terms of the other roles?
Atkins: The jobs still report to the same places they did. We just changed the people in the seats.
CRN: What was the impetus for the change? Why make the change?
Atkins: This is an opportunity for the IBM company to move some skills around, to allow us to take some experiences that each of us had individually and apply them to different parts of the business. It gives us an opportunity to grow our skills and build upon experiences we have.
CRN: So how do you reconcile the [changes with desire from partners for stability?]
Borman: It is right that partners don't like change. It applies to people, but it is beyond people; it's what people stand for, what decisions they are going to make and are they going to change the program, and will it impact the financials and some of the strategy I don't think it is necessarily me as the person, but more than things we have put in place. This is not a "Mike Borman" strategy, it's an IBM strategy that I worked with Donn and the systems group and the services guy to put together. As a matter of fact, we have been here in Palisades going through a number of things that we are going to improve next year for our wholesales and distribution
VB: When you look back at your tenure of running the channels, what was the one thing you felt was the most important contribution or success and, conversely, what's the one thing that you hadn't gotten around to completing?
Borman: It's almost the same and we are in the middle of it right now. But I think the most major change that we are making is to make this one IBM. Instead of four tracks, we are down to one track. The points system that we went through, having partners represent the total IBM value proposition and not just point products, etc. -- we're in the middle of that rollout. We'll have it done by January of next year. I think that's been the most major change, and I would have done it faster if I could have. But we need to give the partners enough notice. As you know, we're not changing until 2005. But that's a major change for these guys and I think it will help IBM and our partners.
VB: Donn, what are your goals and what changes are you going to make as you take this new job?
Atkins: I don't have any changes in mind. One of the great things I have [going for me] is that I have been close to Mike. I have been part of his virtual leadership team that he has formed with the rest of IBM, so I know exactly what's going on. I've been happy that he has given me a voice in shaping the strategy and I think we need to just continue to drive it and follow on the things Mike just talked about. Our partners should not expect to see any radical changes here. This is about taking a program that we are happy with and continuing to work in partnership with them to find ways to make it better.