Greg Adams, vice president for Business Partners for IBM Americas, has been ensconced as IBM's North American channel chief for 180 days. In an interview with CRN Editor In Chief Michael Vizard, Adams discusses, among other changes, the departure of his boss, Mike Borman, as head of IBM worldwide channels in favor of Donn Atkins and what it all means for the channel.
CRN: What should channel partners infer from the departure of Mike Borman as IBM's worldwide channel chief?
ADAMS: I've been in this job since January, and obviously I've brought the various experiences I've had over 20 years working with partners at IBM. When I stepped in, we get the consistency of the programs, which is the prime thing that the partners want. That gives the partners a level of stabilization so things feel seamless. So with Borman leaving, the consistency of the IBM program continues. Mike was the worldwide guy, but I run the Americas. Clearly, it's my responsibility to keep things stable and consistent in the Americas.
CRN: What does Donn Atkins bring to the table?
ADAMS: I've worked Donn over the years, most recently when I was running SMB in the Americas and Donn ran all of Latin America for a two-year period. So we have worked together with partners before. He brings a level of energy and expertise and is very familiar with partners. And with Donn spending the last couple of years on software, that will help. We are trying to pull all the brands together, and we have the farthest to go with software. With Donn's expertise, he can help us accelerate that and minimize any disruption.
CRN: IBM recently rolled out a more unified approach to the channel. Is that designed to make it easier for partners to do business, or are you just trying to get partners to sell more IBM products in each deal?
ADAMS: I think it is a little of both. It clearly makes us a lot easier to do business with, but at the same time it's an opportunity to enhance profitability. We think the value that a partner provides is trying to sell a solution.
CRN: IBM Software Group is a little slow in coming to the new view of a unified channel at IBM. What's causing that?
ADAMS: One of the things that I think is super-important for partners is consistency. We want to make sure that as we've built in incentive plans, growth plans, etc., for a whole range of partners, we can support that as we evolve this thing. They've built their business models for 2004 based on this kind of structure as a software partner. We need to evolve that so that we don't put an impact on their business. We need to give them plenty of warning. We don't want to disrupt what the guys have built into their business models.
CRN: Is software a rapidly growing area for IBM partners?
ADAMS: I see more of our traditional partners getting into the software space. As they focus on solutions, we're pushing them to say, 'Hey guys, this is where the value is.'
CRN: How will the move to solutions change the way channel partners interact with IBM product teams?
ADAMS: The product groups are coming together around common segments where we can bundle these things and then roll them out to the channels. That is kind of the route that we did with eServer. This wasn't just new branding. We were saying, 'Forget what the server is.' Pulling the channel together is enabling that.
CRN: Do you think people in the channel understand what IBM is trying to do with its E-Business On Demand strategy?
ADAMS: I think there was some confusion around the whole On-Demand strategy. For a while, everybody was stuck on utility computing. In all of the training, certifications and stuff we provide for partners, we break On Demand into three areas. One is clearly business transformation. The second aspect is what we call operating environment, which is if you're going to be an On-Demand business, it's about Linux systems and integrated systems, etc. Then the third piece of On Demand is how do you pay for it? Is it financing? Is it pay by the drink? Is it a utility? We're trying to drive this concept to the partners.
CRN: Where do partners play in those areas?
ADAMS: There is the business transformation piece and clearly, our IBM Global Services (IGS) and Business Consulting Services (BCS) arms play in that space. But we don't have enough transformation consultants anywhere. The partners have to get engaged with us to help customers. There is also this whole concept of operating environment. When you're engaged with a customer, it's about transforming their business. But there are some things you can do right now that are much easier to understand.
CRN: How will you help solution providers go to market?
ADAMS: We've put a marketing exec with each of our distributors. Then I put marketing people in each of the regions. Then we're going to have a quarterly marketing review with each partner.
CRN: That operating environment is where most channel partner are scared about the concepts associated with On Demand computing. They worry that integration service revenue will drop as the products become smarter and better integrated. What's your take on that?
ADAMS: I don't see it. All of the marketing intelligence data that we use doesn't see technology services dropping at all significantly. And we're now going to partners and saying, 'Let's look at your bench. Let's look at our bench. How do we team across and expand the business?'
But the price of services is falling. That may be because there are just more guys sitting on the bench. There are more offshore. Pricing on services is seeing a lot of pressure. That affects everybody, including IGS and the channel partner. But over time, as prices come down, the number of engagements will increase. Our bench and our utilization right now are at an all-time high for those kinds of services.
CRN: What role will IGS play in the channel going forward?
ADAMS: From IGS's point of view, we're giving people tremendous incentives, especially around financing, that will help their profits. I think IGS is a huge secret weapon, and we have been dramatically ramping up. The incentives that partners can get are two or three times what they were last year if a transaction is financed through IGS. We're also putting IGS reps with the distributors and in the regions. We can work with partners to help them as they close financing deals. It is a huge play and provides huge profits for the partner.
CRN: How will you make the IGS relationship with the channel work, given the history of conflicts with rival solution providers?
ADAMS: We've got to invest head count into the channel organization. We have undermanned that over the previous years. It is a matter of us investing people with the channel to make sure that we're working together. We're seeing dramatic ramp-ups in the services business, and I think we've broken the code with the IGS team. I now have the IGS channel-management function in my organization.
CRN: With Doug Elix coming over from IGS to sit on top of overall sales and the IBM channel group, what impact will that have?
ADAMS: I worked with Doug. He is a channel guy. He understands the importance of the channel. IGS has been struggling with, 'How do I grow our services business?' The key area is SMB, which is half of the IT market and the fastest-growing market. His coming over is huge. It accelerates the things I just described. He knows how to structure deals and leverage IGS.
CRN: What impact will the other recent management changes have at IBM?
ADAMS: The other subtle thing that went on in all of this is that when John Joyce, our CFO, went over to run IGS, we put IBM Global Finance under IGS.
CRN: What is IBM doing to help get more partners working with each other?
ADAMS: At some point, we should be the dating service to bring them together. That's one of the value propositions. Part of the job of our regional teams is to move around our territories and create value nets. Their job is make sure that our local IBM teams are aware of the solutions and then link the partners in. That's a very active part of what we're doing.
We have two roles within that territory construct that are critical for partners. One is what's called the Territory Partner Manager. That person is kind of like our dating service. That person is responsible for the partner maps and the solution areas. We build a partner map. Then all of our sales reps in this territory understand that map, and the territory partner manager makes sure that partners are getting engaged. Intersecting with that is a channel rep in each of those territories. That channel rep's responsibility is the relationship with the partners in that geography. So it's a two-pronged effort driving business development and the relationships with the partners to grow their business. One of my execution priorities is local integration. We want to help them grow their business with us.