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IBM, Red Hat Execs: Kyndryl Spin-Off Brings Partner ‘Opportunities’

‘You look at IBM very differently than you did before,’ Bob Lord, IBM’s senior vice president of worldwide ecosystems, tells CRN in an interview. ‘For our partners, I think it‘s actually going to provide them a lot more clarity, and provide them with a greater ability to capture new opportunities and create value for their clients.’

Now that IBM has spun off its managed infrastructure services business into the independent, publicly traded company Kyndryl, executives at both IBM and its subsidiary Red Hat say that channel partners should see new opportunities looking ahead.

One of the biggest advantages for partners of Armonk, N.Y.-based IBM is simplifying how to talk to customers about the company’s offerings, Bob Lord, IBM’s senior vice president of worldwide ecosystems, told CRN in an interview. The new IBM is focused on software, consulting and hybrid cloud and artificial intelligence built on Red Hat OpenShift.

“You look at IBM very differently than you did before,” he said. “For our partners, I think it‘s actually going to provide them a lot more clarity, and provide them with a greater ability to capture new opportunities and create value for their clients.”

[RELATED: Kyndryl CFO David Wyshner: We’re No Longer ‘IBM Captive’]

The spin-off of Kyndryl and changes IBM made to how it reports its sales publicly every quarter have not changed new initiatives to help partners, including a new go-to-market strategy that started in January and spending of $1 billion on the partner ecosystem in technical support, help securing competencies and other areas.

The company will continue to invest in new relationships with independent software vendors and solution creation with large-sized technology consulting firms such as Deloitte and EY.

Those two types of relationships should create new offerings and services that smaller partners can offer their own customers, Lord said. Examples include Red Hat OpenShift Service on AWS (ROSA), an integration built with cloud giant Amazon Web Services, and DAPPER, an artificial intelligence-enabled managed analytics solution built by IBM and Deloitte.

His advice to IBM partners as the new year approaches is to look at the company’s seven sales playbooks -- data fabric, customer care, business automation, AIOps, zero trust threat detection, data resilience with flash and Red Hat Ansible and OpenShift -- look at the company’s portfolio suite and combine IBM’s technology with a partner business’ areas of specialty.

Services within IBM Consulting, the former IBM Global Business Services segment, are also available to partners, he said, as is a team of worldwide hybrid cloud IBM employees.

“Their normal reps are there that they‘ve worked with before, but it’s a matter of now understanding what additional resources do they now have access to. And they should take advantage of those -- from a technical training standpoint, from a technical enablement standpoint and from a funding standpoint -- they should take advantage of those programs.”

While partners shouldn’t expect to see a shared program between Red Hat and IBM anytime soon, Lord still encouraged IBM partners to invest in certifications and expertise around Red Hat offerings to take advantage of the new IBM.

“A lot of the partners are seeing acceleration in the Red Hat practices because that‘s really a first step within our clients to get on these hybrid cloud environments,” he said.

Red Hat Maintains Neutrality

David Farrell, Red Hat’s senior vice president and general manager for global strategic alliances, told CRN in an interview that Red Hat partners can expect the same neutrality for Kyndryl as they’ve seen between Red Hat and parent company IBM.

Kyndryl and IBM are Red Hat partners, but they don’t have additional preferential pricing, funds or treatment from the Raleigh, N.C.-based open source software provider, Farrell said.

“That‘s been a hallmark of Red Hat from the beginning of time,” he said. “It’s in our DNA, being the flagbearer of open source.”

Partners still have plenty of reselling opportunities for Red Hat, Farrell said. And as Lord said about IBM and its partnerships with ISVs and larger consultants, smaller Red Hat partners can expect to benefit as new solutions trickle down the ecosystem.

“The thing about any of the big partnerships that we’re involved in is that, yes, it‘s a good thing for customers,” Farrell said. “Yes, it’s a good thing for Red Hat and for that big anchor client. But there’s this long tail of benefit that comes with that because of that peloton effect, that drafting effect. And we all know that markets, particularly open source markets, which are based on standards, are based on critical mass and that there’s a tipping point.”

He continued: “You don‘t drive the adoption and you don’t drive the customer value without the smaller providers that have that intimacy and that locality with customers.”

Farrell said he wants to see more partners enter the ecosystem to meet customers’ demand and that partners can expect new reselling opportunities in 2022, with more information coming by January. In the meantime, deepening expertise in Red Hat’s product suite will serve partners well, he said.

“The big opportunity for our partners of all sizes and shapes is to invest in skills, capability and solutions that are on our stack that customers are already deploying because we’ve got a demand statement there,” he said.

Partners Weigh In

IBM and Red Hat partners who spoke with CRN on expectations for the companies now that Kyndryl has spun off said they still have faith in the leadership at IBM and Red Hat to navigate the competitive cloud computing space while marketing IBM as a leader in hybrid cloud. The partners also applauded the company’s education and training programs for preparing partners when they add new products and technology to their portfolios.

Brandon Harris, vice president of modern data center at Logicalis, a New York-based IBM and Red Hat partner, told CRN in an interview that his company’s storage and flash system-related business continues to see high demand among customers and that Logicalis is investing in growing its offerings around automation and containers.

The spin off of Kyndryl creates an opportunity for partners that can provide services at a better cost to customers than IBM can, he said.

“With the separation, I think there‘s an opportunity for IBM to work with partners like us differently from a managed services and a professional services perspective because they don’t have that global services organization,” he said.

Harris said that he’d like to see more resources around partner enablement. “Help us build our Linux and OpenShift capabilities,” he said. “Help us build our security software capabilities. Help us build our data software capabilities, those kinds of things. And it doesn‘t have to be dollars. It can just be applying additional resources from their side that help us.”

Still, Harris wants to see IBM and Red Hat continue to keep their partner programs separate. “I think they‘ve got to stay separate,” he said. “It’s kind of like the Dell EMC VMware thing. They can be somewhat intermingled but they’ve still got to have their separate go-to-markets or separate programs.”

Nalit Patel, CEO of Livingston, N.J.-based IBM partner All Solutions, said he wants to see more employees dedicated to supporting partners with engagement and implementation for customers.

“I had a midmarket customer where we needed some resources from Microsoft Azure,” Patel said. “I sent an email to somebody. Within 24 hours I got an answer. That is the nimbleness and connectivity that we need” from IBM.

He continued: “Put more resources on the partner engagement and a see the return on investment.”

Tim Kreytak, CEO of Boston-based IBM and Red Hat partner Ironside Group, told CRN in an interview that services around digital transformation, data migration to the cloud, machine learning and artificial intelligence have all been high in demand from customers lately.

He applauded the recent changes to how IBM segments revenue reporting during its quarterly earnings as a sign that IBM is focused on the right growth areas. “We can already see a shift in the focus to the areas that we think are really relevant and important for IBM‘s health,” Kreytak said.

He said he hopes to see IBM continue to advance the user interface and user experience of OpenShift and its Cloud Paks even as it focuses on advancing infrastructure. More resources around demand generation, marketing and lead creation could also benefit partners and IBM itself, he said. “Those are areas where we would all benefit from investment,” he said.

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