IBM Channel Boss: Partners Will Play Big In $20 Billion Key Growth Initiatives Plan

IBM Global Business Partners General Manager Rich Hume Thursday said partners will play big time as the computer giant pushes to drive $20 billion in revenue growth from key initiatives over the next five years.

Hume said IBM is planning for broad and deep participation from partners as it drives a projected revenue gain from $30 billion in 2010 to $50 billion in 2015 in four primary areas: emerging growth markets, Smarter Planet initiative, business analytics and cloud computing.

"There is unbelievable opportunity for the channel going forward," said Hume in an interview with CRN. "The channel is right in the forefront of every major strategic imperative we are working on."

For example, Hume said, IBM has funded new cloud resources for the partner organization. "We are very, very focused on leveraging the channel's capabilities."

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"It is our expectation that our participation with partners will be equal to or greater than it historically has been as we go forward with these four growth initiatives," said Hume.

"The major mandate of the channel organization is to get partners to participate in the journey with us by building out their capabilities to focus on these four initiatives we are aggressively pursuing," added Hume.

Hume said IBM is sharply focused on getting partners to "build out their capabilities" to participate in the high growth "journey."

Hume's comments represent a watershed moment for solution providers looking for signs of the $96 billion computer giant's channel commitment.

What's more, it marks the first time Hume has talked publicly about where IBM partners fit into IBM CEO Sam Palmisano's highly publicized pledge to double IBM's profits by 2015.

Palmisano is pushing IBM to drive more and more profits from the higher margin areas like growth markets including China and higher margin software and services that make up smarter planet, business analytics and cloud computing.

As part of the Palmisano plan, IBM has signaled its intention to spend $20 billion on acquisitions over the next five years.

IBM expects emerging growth markets to contribute 50 percent of IBM's growth over the next five years and business analytics to drive another 20 percent growth over the same period. That would make growth markets 25 percent of IBM's total revenue by 2015 and business analytics a $16 billion business by 2015.

On the Smarter Planet front, IBM said it expects that business to grow to a $10 billion business by 2015 and cloud solutions to contribute an additional $3 billion of net growth by 2015.

Next: One IBM Partner's View Of The Future

One top IBM infrastructure focused partner, who did not want to be identified, said IBM wants to engage with the channel on growth markets like cloud and smarter planet but has not come up with specific programs to make it happen. "Those offerings are not yet channel enabled," he said. "I don’t think IBM has thought through how the channel is going to play in these new initiatives. That's a concern."

IBM's Smarter Planet initiative, he said, for example, has been primarily an IBM Global Services, Consulting and IBM direct sales initiative.

Hume,for his part, would not break out just how much of the $20 billion in revenue growth in those four key markets over the next five years will come from partners.

Hume did say that IBM has developed a business development tool designed to get partners to understand the economic benefits of moving into key growth initiatives with IBM.

IBM is currently piloting the tool with some of its top US partners. Hume said the tool acts somewhat like a spreadsheet analyzing a solution provider's business model metrics, comparing them to best in class IBM solution provider peers and then analyzing what impact adding specific IBM software and product offerings will have on profit margin and sales growth.

IBM aims to move the tool to a Web portal offering in the fourth quarter, said Hume.

Another major move IBM is making as it drives growth initiatives with partners is a stepped up effort to get partners vertically focused on specific markets like healthcare, manufacturing or government.

Hume said that he expects the majority of IBM partners by 2015 to have specific industry expertise. Customers are demanding that industry expertise, he said.

IBM has started that educational push by conducting some 130 educational sessions across 17 specific industries with partners, said Hume.

All in all, Hume said he see IBM's "channel ecosystem today much stronger" than it was two years when he took the job at the top of IBM's channel organization. "We feel really good about the health of the IBM channel and what we have to offer them as we move into the future," he said.