IBM Raises The Bar For 2012 Channel Sales

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IBM has high expectations for its channel partners this year, setting a goal of growing North American channel sales at twice the rate of IBM's overall North American revenue this year.

And channel partners think they are up to the task.

"IBM is providing a lot of support and resources to help meet the growth targets," said Tommy Petrogiannis, president of Silanis, a Montreal-based channel partner, in an e-mail. "I believe the expectations are attainable, not easy, but doable."

[Related: IBM Paves Way For Partner Transformation]

IBM's North American channel accounts for $5.5 billion in annual sales. At the company's PartnerWorld Leadership Conference (PWLC) earlier this month, IBM executives set high goals for channel partners for 2012 including increasing the software component of channel sales and growing software, storage and System x hardware sales at faster rates than the company as a whole.

The vendor is counting on North American channel sales in 2012 to grow at twice the rate of the company's total North American sales, according to a presentation the last day of the PWLC by Wilfredo Sotolongo, IBM vice president of business partner and midmarket sales for North America.

Other goals include growing sales of storage systems through the channel by 15 percent, which would be 1.5 times IBM's expected overall growth rate for storage sales this year. And the company is counting on a 12 percent increase in channel software sales, also 1.5 times that of the company overall.

The company is also pushing for a 20 percent increase in channel sales of System x servers, a whopping five times the company's overall expected increase in System x sales.

Sotolongo also said IBM is shifting some $25 million in direct storage product sales to the channel and $100 million in direct System x sales to resellers. "We're looking to increase our sales capacity through you," the executive said to partners at PWLC.

"We're very optimistic," said Dan Bivona, sales director for Vormittag Associates Inc. (VAI), a major IBM business partner, in an interview. He said VAI's goals are to grow its sales 20 percent this year. "And if other partners are as confident as we are, I think Sotolongo will have no problem making his numbers."

Last year partners led about one-third of IBM's hardware sales and served as the fulfillment channel for about 50 percent of hardware deals, according to Rod Adkins, senior vice president of IBM's System & Technology Group.

But the channel currently generates only about 15 percent of IBM's software sales, Sotolongo said in an interview, and IBM is trying to grow that to between 20 to 25 percent.

While VAI is a long-time reseller of IBM's hardware products, Bivona said VAI is selling more IBM middleware products and IBM applications such as WebSphere Portal and Cognos business analytics. And others are under consideration, Bivona said. And in a nod to another IBM sales priority, Bivona said: "We think the mobile market is just going to explode."

At PWLC IBM unveiled the IBM Solution Accelerator initiative, informally known as "Blue on Blue," that offers additional rebates for selling hardware-software solutions. IBM is hoping the program will encourage solution providers to partner with other VARs to develop such solutions.

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