IBM To Give VARs Special Bid Pricing Up Front

IBM is helping its solution providers with a number of new programs aimed at helping sell more server and storage hardware, including cutting out the back-and-forth jostling needed to approve special pricing, a move solution providers said would greatly speed up customer transactions.

Bob Samson, vice president of worldwide system sales in IBM's SystemsTechnology Group, on Tuesday briefed solution providers attending the IBM PartnerWorld conference in St. Louis that IBM would let solution providers know up front what the special bid pricing for its products was, and approve the pricing to customers after the deal was made.

IBM is also helping partners set up blade server and storage infrastructures for use in demonstrating the technology to customers, as well as continuing lead generation programs targeting the existing customer base for certain servers and storage devices, with leads to be passed exclusively to solution providers, several IBM hardware execs told the VARs.

Speaking to CRN after the presentation to solution providers, Alex Gogh, vice president of channel marketing for the SystemsTechnology Group, said that his company is using a grid system to let partners know the different levels of pre-approved special bid pricing.

"Partners will understand the special bid pricing, and will know the bid pricing process," Gogh said. "The can give the special bid pricing to customers, under the appropriate terms and conditions, and we will approve the prices after the deal is signed."

The goal, Gogh said, is to make sure the solution provider can give the special bid pricing to the customer as soon as possible without going back and forth with his or her IBM representative.

Russell Schneider, president and founder of Marketex Storage Solutions, a Santa Clara, Calif.-based IBM solution provider, called the move an interesting change in the customer pricing game.

However, Schneider said, the impact will be felt less by larger solution providers such as Marketex, and more by smaller solution providers thanks to the understanding large customers have about the special bid pricing process.

"We pretty much know what the lowest price is day-in and day-out," Schneider said. "But for extraordinary deals, with large customers in a dogfight with the competition, the price can be stretched another point or two."

The biggest question about the new program is, will IBM go the extra stretch in such dogfights, Schneider said. "I guess they will," he said. "This program is more for the smaller customer. And the main goal is to keep end users from knowing the final price."

Schneider said that every situation is in some sense a competitive situation. "When the gorilla customer comes to the door, he gets the special pricing whenever he wants," he said.

Jack Russell, manager for the Advanced Technology Group at Lowery Systems, a Fenton, Missouri-based IBM solution provider, said the biggest advantage to the new special bid pricing system is faster response to customer requirements.

"The customer needs the price now," Russell said. "We can't wait four days, which is typical. And customers don't know what we're waiting for. This could be huge for customer satisfaction."

Like Schneider, Russell said it is important that IBM still keep some flexibility in the special bid pricing. "We still run into situations where special pricing is not enough, so we have to stretch it a bit," he said.

IBM is also helping solution providers set up new small blade-focused versions of their Business Innovation Centers, where a partner deploys a demo center complete with a wide range of IBM products. Unlike the Business Innovation Centers, which require a hefty investment in money as well as time, these new "remote branches" will specifically target the demonstration of server blades and associated storage, Gogh said.

Next: More partner marketing from IBM

"If the VAR has interest in showing leadership with blades and storage, IBM has the incentives to help set up a sales center in their own office," he said. "And for VARs that have a Business Innovation Center already, they can get a remote branch. We want to energize points of sale."

To qualify for the remote branches, which are scheduled to become available in early July, solution providers will have to demonstrate their server blade and storage skills, and will require what Gogh called a "nominal" monetary investment.

IBM is also targeting the 50,000-strong installed base of System i server users and the 80,000 current users of its DS3000 and DS4000 storage arrays for a telemarketing program aimed at generating leads for solution providers, Samson said.

IBM will call each user to ascertain if he or she is a prospective customer of new hardware to replace existing products, with all leads being passed to solution providers, Samson said.

"We don't keep any of them," he said. "We couldn't do anything with them anyway."

Russell said the help with telemarketing to existing storage customers could be a big help as long as the leads get passed to the right solution providers.

"Does the partner information come from the customer?" he said. "Sometimes the customer doesn't pass the right information to the vendor. I like the telemarketing help, but I'm always a bit nervous in such cases."