IBM Plays To Midmarket MSP Channel Concerns

Tech behemoth creates two new partner programs to encourage sales and channel loyalty for both the SMB and midmarket sectors

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IBM has introduced two new programs for midmarket solution providers that directly address the cost of doing business with the technology giant.

The IBM Express Managed Services program and The Business Partner Agreement for Collaborative Services are dual efforts from IBM that aim to erase two common misconceptions that many midmarket solution providers harbor about the famously enterprise-caliber vendor: that IBM technology services are too expensive for SMB customers and that midmarket VARs should be competing against, not working with, the vendor, according to IBM executives.

The newly hatched IBM Express Managed Services program provides discounts and longer-term payment options for MSPs that purchase IBM's Express line of products for their managed services businesses and MSP customers, said Mike Riegel, director of managed services at IBM.

The Express product line, which began to roll out earlier this year, offers lower-cost versions of IBM's premier enterprise products designed for smaller IT environments.

The program's discounts and payment plans are available for six products: Express Desktop Management Services, Express E-mail Recovery Solution, Express Managed Security Services for E-mail Security, Express Managed Security Services for Firewall and VPN, Express Managed Security Services for Web Security and Express Online Backup for Distributed Servers, Riegel said.

One-, two- and three-year payment plans for the family of Express products are available interest-free, making it easier for MSPs to lower their upfront costs, Riegel said. MSPs also save money when buying more than one Express product at a time, he said. "For example, if you buy E-mail Security, the starting list price is like $2 per user per month. So say if another product costs $4 per user per month, you're not going to pay $6 for both, you're going to pay $5," he said.

Insight Enterprises, a publicly traded solution provider in Tempe, Ariz., has been in the managed services business for several years now, but for the most part, has not used IBM products in the delivery of managed services to its SMB customers, said Steve Kedzior, Insight's senior vice president of client solutions. That has changed with the arrival of IBM's Express line, and in particular, IBM's new Express MSP effort, he said.

"IBM has the stigma of being a large government and enterprise player," Kedzior said. "But we have been impressed by their willingness to be flexible and work with us [in the SMB MSP space]."

IBM's other recent move to further engage partners—The Business Partner Agreement for Collaborative Services—is a two-year, non-exclusive contract with IBM aimed at solution providers that may have never done business with IBM before, said Candy Shaughnessy, vice president of channels for SMB services at IBM, Armonk, N.Y. The new partner agreement includes a way to qualify for financing direct from IBM to pay for expensive, bundled hardware and software solution deployments that also can include products from third-party vendors, she said.

IBM has identified a significant number of solution providers—which it prefers to call Regional Systems Integrators (RSIs)—that have never engaged with the vendor in the development of broad hardware, software or IT services offerings, Shaughnessy said. The Business Partner Agreement for Collaborative Services is designed to get these RSIs more deeply involved with IBM in a direct way, beyond merely reselling every once in a while a one-off IBM product that gets procured though a distributor, she said.

The partner agreement is a two-year contract that costs eligible RSIs nothing to enter into, Shaughnessy said. Participants are not bound to sell only IBM solutions, nor are there any sales quotas, according to IBM.

Project financing is available to solution providers bound by the Business Partner Agreement for Collaborative Services, Shaughnessy said. Financing is subject to the partner's credit history, and fulfillment of financed software, hardware and services offerings are delivered direct from IBM, not through a distributor, she said. "They have the opportunity to finance all or a portion of the solution, even if it doesn't include an IBM component in the financing."

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