Partnering Efforts Pay Off

But as of late, IBM has sought to better balance the direct/indirect sales ratio of its software business as it pushes into the SMB market, which has meant partnering heavily with ISVs and regional systems integrators. Given the results of the 2004 Annual Report Card (ARC) survey, its efforts are beginning to pay off, garnering top partnering honors and besting rivals Microsoft, Oracle and BEA in the Web infrastructure and software category.

It is momentum that Steve Mills, general manager of IBM's Software Group, is committed to seeing continue. With IBM so focused on selling its software in the context of industry-oriented solutions, Mills says the company will rely on partners more than ever to extend the platform.

Chief among those partners are ISVs and systems integrators who create applications for industries such as automotive or retail that then ride on top of IBM's WebSphere products or other middleware. The go-to-market approach resembles more of a pull/push model, where the applications lead the deal, followed by the middleware.

Taking a deeper look at these ARC results, it's clear that we have two groups to compare. First, there is the contest between IBM and second-place vendor Microsoft, which was relatively close. Then you have the two bottom-dwellers: Oracle, in third place, and BEA, which brought up the rear.

IBM and Microsoft tied for first in a couple of criteria--revenue/profit potential and quality of technical support. But IBM outshined Redmond in the product innovation subcategory, notably in the criteria of product quality/reliability, richness of features/functionality and technical innovation. Microsoft excelled in partner loyalty. The company scored 83 of 100, compared with second-place IBM's also-strong score of 80. Oracle captured a 62 in loyalty, which helped to offset its utterly bad scores in product innovation and support--it scored in the measly 40s in six out of 16 criteria. For its part, BEA, whose WebLogic family of products is highly regarded technically, just isn't clicking with partners despite its attempts to reconnect and rebuild a real VAR channel.

Part of what draws partners to IBM's middleware business is that it offers a more complete package.

"It's really about choosing the company on both a technology and business level," says Devi Gupta, CEO at Prolifics, a New York-based solution provider. "On a business level and from my customer's perspective, IBM... is going to be around and is continuing to invest in this type of technology and has a decent reputation for support. And IBM's channel programs are just stronger."