Partners: IBM Still Too Slow Approving Discounted Deals

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The partner who said he has seen improvements in discounted deal approvals said another issue is the length of time it takes for IBM to select a partner for a contract when more than one partner registers for a deal. IBM requires lots of paperwork from the partners about the sales activities related to the deal to prove "investment validation," and he said it can take weeks for a decision from higher-level managers. Other vendors -- he specifically pointed to Cisco -- speed up that process by giving local account managers the authority to rule in such cases.

That partner, who works through distributors, said deals can even bog down over basic mechanics, such as when IBM requests additional information and the vendor and distributor need documentation in different formats.

"The prospects are there," said the first partner. "IBM has the best products and very capable channel and direct sales teams. They can't move approvals through the IBM maze quickly enough to compete with companies who delegate pricing to the field level."

IBM's Cilliers said the company has improved its deal registration system during the last 12 months and in that time has delegated more deal-approval authority to speed up decisions.

The complaints come as IBM is trying to turn around the sluggish performance of its Systems and Technology Group, including its System x and Power Systems brands and its storage hardware. IBM has said it could divest itself of one or more underperforming businesses and CRN has reported that IBM is in talks to sell its x86 server business to Lenovo.

Last month, President and CEO Ginni Rometty addressed IBM employees in a video that urged them to "step up" and move more quickly to new computing models to stay competitive. In that video, Rometty specifically cited a lost software sale to a major customer in the retail industry because IBM was too slow to act. "We were too slow to understand the value and then engage on the approval and the sign-off process," she said, according to a Wall Street Journal story about the video.

IBM has said it's trying to be more responsive to channel partners' needs, such as reducing the amount of time it takes to approve financing for partner-led deals. At the company's PartnerWorld Leadership Conference in February, the company promised to provide more sales leads to partners.

At UBM Tech's XChange conference in March, Bill Donohue, IBM business partners vice president, outlined a number of initiatives to help partners move into such areas as cloud computing, business analytics and mobile computing.

Channel partners who complained about deal approval delays say they have seen some improvement in recent weeks -- especially for deals involving the company's PureSystems converged infrastructure servers. "IBM has been much more responsive with PureSystems deals; we now get pricing in a few days from request. IBM has also added more margin to PureSystems deals," one of the partners said.

Another partner said he had a PureSystems deal that required special bid pricing approval, and the sale was jeopardized when IBM took a couple of weeks to approve it. By then the customer requested a requote, the partner said. But to IBM's credit, he said, the vendor sent a representative to complete the negotiations in person and the deal got done. The partner said that since then he has completed another PureSystems deal that was approved in just two days.

"I don't think IBM's quite there yet," the partner said. "But they're making progress."



This story was updated on May 8, 2013, at 1:58 p.m. PST, to include comments by IBM's Ilse Cilliers made after press time.


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