IBM Offers VARs Bounties For Displacing Competing Software Products


In a note sent to software resellers Friday, Sandy Carter, vice president of IBM Software Group business partners, said the company would pay up to twice the usual margins -- what IBM calls “software value incentives” -- for the competitive displacements.

The “Up to Double SVI” offer expands on a program IBM launched in April to provide resellers with incentives to target Oracle and Sun Microsystems software customers. The bonuses can be worth as much as 40 percent of a contract’s value -- twice the average margin for partner software sales.

“Our partners are really accelerating these migrations,” Carter said in a phone interview this week, adding that IBM partners have some 40 deals in the pipeline that qualify for the bonus.

IBM is offering the incentives to resellers of its Cognos business intelligence software if they displace Oracle Discoverer or Oracle Business Intelligence Publisher software in a customer account, Carter said. Also eligible are Cognos reseller wins among customers who own Hyperion Enterprise, Pillar, Brio and Essbase -- products Oracle acquired when it bought Hyperion Solutions in 2007 for $3.3 billion.

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Resellers of IBM’s WebSphere middleware are likewise eligible for the bonus if they convince customers to swap out Oracle’s WebLogic Server (which came with Oracle’s BEA Systems acquisition in 2008) or Sun’s Java Composite Application Platform Suite (JCAPS), which Oracle has said it will continue to support, but will no longer develop.

SAP just completed its $5.8 billion acquisition of Sybase, and IBM is offering the SVI bonus for channel partners who can migrate Sybase database software owners to IBM’s DB2 database. “We’re seeing a lot of requests from our clients who still have Sybase,” Carter said.

And IBM is targeting owners of HP’s software testing tools, which HP acquired in 2006 when it bought Mercury Interactive for $4.5 billion, with its IBM Rational development tools. Carter said the idea for that specific incentive came from Rational channel partners at the IBM Innovate 2010 conference in Orlando last month.

Carter said IBM is looking to its channel partners to help expand its market share in the middleware arena. Last week IBM reported that its software sales grew only 2 percent in the second quarter, although WebSphere sales were up 17 percent and sales of the company’s Tivoli systems management toolset grew 18 percent. But Rational software sales were up only 1 percent sales of IBM Lotus applications dropped 6 percent. Information management software sales grew 7 percent.