IBM Overhauling Channel Program As Partners Look To Hybrid Future

With a new CEO and Red Hat-integrated Cloud Paks central components of its solutions portfolio, Big Blue is executing its largest PartnerWorld Program revamp in a decade to help partners unlock new revenue streams, says Channel Chief David La Rose.

With new executive leadership and Red Hat in its arsenal, IBM is re-engineering its channel program to prepare partners for a future of building custom solutions and delivering integrated hybrid cloud services.

The most significant transformation to the IBM PartnerWorld program in more than a decade adds two tracks that Channel Chief David La Rose told CRN are intended to unlock new revenue streams for IBM’s business partners and help them penetrate down-market accounts.

“This is a pivot, it’s a big pivot for the program,” La Rose said. “We’re really now relying on the ecosystem to move IBM’s agenda forward in the cloud and the AI world.”

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[Related: New CEO Arvind Krishna Needs To Revitalize IBM’s Channel Strategy: Partners]

Big Blue began a major channel revamp two years ago under La Rose’s predecessor, John Teltsch. But when IBM purchased Red Hat last year for $34 billion, the program needed to evolve further to seize the massive hybrid cloud opportunity obtained with the industry’s leading open source software portfolio.

“Hybrid cloud will effectively define the opportunities we have, not only from IBM’s perspective, but business partner perspectives for 2020 and going on,” La Rose told CRN.

IBM has now melded technologies through a series of Cloud Paks that wrap IBM software in containers managed by Red Hat’s OpenShift platform. That integration enables IBM’s middleware portfolio to be deployed in any environment—a significant advantage in an increasingly hybrid and multi-cloud world.

Cloud Paks are envisioned “to be at the heart of any solution IBM or a partner is providing to clients,” La Rose said. As such, IBM wants to reward partners for putting those integrated offerings at the center of their go-to-market strategies, even if they don’t have a direct relationship with Red Hat.

The flexibility in deployment enables partners to attack down market from the large enterprises that constitute much of IBM’s customer base—organizations with as few as 500 seats—in a way they previously found prohibitive.

“We know the hybrid operating environment is now a reality across enterprise clients, and into small and medium-size businesses,” La Rose said. “It’s the opportunity we have to go after.”

IBM is differentiating its incentive stack to encourage partners to invest in catering to those small and midsize clients, he added, telling CRN: “if they play there, there’s good money to be made.”

With the continuing shift to hybrid and multi-cloud environments, IBM is seeing more than half its partners expanding their business models—increasingly building custom applications, integrating their own IP into a solution stack, and introducing unique services capabilities.

The PartnerWorld program changes are designed to reward such innovation, and bring more traditional resellers into that new world, La Rose said, while appreciating some will move quicker than others.

“This is a clear direction for our partners that we are now pivoting hard toward the cloud architectural battle in the marketplace that we have to win going forward,” La Rose said.

La Rose will elaborate on the program changes today at the IBM Think conference—more than 60,000 clients and partners have registered to participate in the online forum after the annual in-person event was cancelled due to the coronavirus outbreak.

During his PartnerWorld keynote, La Rose will describe the Build and Service tracks that have been added to the program, which previously only had a Sell track.

Build will incentivize partners writing applications and creating custom IP on IBM Cloud; Service supporting them in delivering those solutions as implementation and ongoing managed services.

Along the three tracks, IBM is introducing Partner Packages that deliver benefits commensurate with partner expertise in cloud and cognitive solutions. Those kits, which scale from starter to enterprise, provide cloud credits, technical support and other enablement resources to get partners launching solutions on the foundation of IBM Cloud.

The changes cap a process that Teltsch initiated in 2018 after taking over strategic development of IBM’s program from longtime channel chief Mark Dupaquier.

“The work John did was centered on a massive simplification of a lot of the backend and taking cost out of doing business with IBM,” La Rose said of his predecessor. “Largely we think that’s behind us.”

The goal now is to drive forward IBM’s cloud and cognitive strategy—especially by leveraging Red Hat’s Kubernetes platform to offer an open and secure hybrid environment that helps customers avoid lock-in from on-premises and public cloud providers.

At the same time, as a large private and public cloud provider in its own right, IBM will look to build capabilities that differentiate its cloud from those of competitors, La Rose said.