Partners Add $3 Billion To IBM Top Line

IBM business partners have fundamentally changed the world's largest computing giant, adding $3 billion in new business for IBM in the past year, company executives said Monday at the company's annual PartnerWorld event underway this week in Las Vegas.

Partner-driven revenue at the company increased to $32 billion from $29 billion in fiscal 2004, said Donn Atkins, general manager of worldwide business partners at IBM. The growth, he and other IBM executives told some 5,000 PartnerWorld attendees, is also increasing faster than other parts of IBM's global business, meaning that the revenue partners account for is increasing as a percentage of IBM's overall sales.

At the event, IBM outlined several new initiatives and discussed new milestones, in addition to the financial one above. In particular, IBM touted recent gains in servers, including the IDC market-share numbers released last week that indicate that IBM attained No. 1 market share in servers, extending its lead over Hewlett-Packard. The company also noted that, according to IDC, IBM topped both Sun and HP in Unix servers in 2004, and overtook Dell last year in Intel servers.

Atkins also noted how partners, in addition to lifting IBM's broad, top-line number, also performed well against individual metrics. Last year, for example, IBM partner executives challenged partners to generate $1 billion in new business working with Linux on behalf of IBM. Atkins proudly pointed out that partners beat the revenue goal by more than $110 million. Following up on last year's goal, IBM now says it wants partners to generate $2 billion in Linux-related revenue in 2005.

As for initiatives, IBM showcased three specialties designed to help partners go after the SMB market, which IBM estimates to be as large as $360 billion annually. They include:

* An expanded development initiative geared for IBM Express offerings that provides technical frameworks to help business partners build solutions and applications that are fully integrated into the IBM stack.

* A new, Built-On Express initiative that recognizes products built in accordance with IBM development specifications. Benefits include an Express logo, technical support and access to IBM's virtual innovation centers.

* Opening the year-old PartnerWorld Industry Networks program for ISVs to regional systems integrators with the goal of pairing the two sets of partners in joint sales opportunities in 13 vertical industries. In addition, IBM has redeployed hundreds of sales specialists to work in the field to close deals.

Other themes IBM emphasized on the opening day of its event included working more closely with IBM's massive Global Services arm, fostering and leveraging the ecosystem of all IBM partners, and looking at ways to embrace more of IBM's software-services portfolio and its on-demand middleware technologies.

Doug Elix, senior vice president and group executive of IBM's sales and distribution arm, took the stage after Atkins kicked off the event and made several key observations. He noted how different the IBM of today is compared to the IBM of 1993, when the company generated just 20 percent of its revenue from services. Today that figure is 50 percent. And IBM's overall revenue is much larger, having grown to $96.5 billion from $62 billion.

Brimming with pride and confidence, Elix said the future in computing lies with those who outline clear strategies and execute upon them accordingly. "We expect to be winners with you," he said.