IBM CEO Sam Palmisano Offers Advice, Observations To Channel Partners

A Sam Palmisano Sighting

Samuel J. Palmisano doesn't make many public appearances, so you can bet the 2,000 IBM channel partners attending the IBM PartnerWorld Leadership Conference in Orlando last week were listening closely when the company chairman and CEO delivered a keynote address.

While IBM still retains some of its corporate, blue-suited image, Palmisano was anything but buttoned down as he delivered a speech that was at times passionate and boisterous, his voice rising as he detailed IBM's strategic direction and urged channel partners to come along for the ride.

Photos by Sophie Elgort.

The World (And IT Market) According to Sam

Palmisano identified what he described as three macro trends impacting IT: The increasingly integrated worldwide economy, businesses' increased need for highly integrated IT infrastructure, and the evolution away from the PC as the center of IT.

IBM today is well positioned for these changes thanks to decisions made as far back as 2002 when Palmisano became CEO, he said. Selling off IBM's PC operations in 2005 was "an easy one," he said. Less so was investing millions of dollars to develop integration technology that would in time become known as cloud computing.

"In 2002 we weren't clever enough to call it 'the cloud,'" Palmisano said. "We're not that good. We're from the East Coast of the United States. We're boring people. We describe things in engineering, factual terms."

IBM's Targeted Growth Markets

IBM has zeroed in on four growth areas: Fast-growing IT markets in developing countries, business analytics, cloud computing and what IBM calls "smarter planet."

Growth markets include Brazil, Russia, India, China and another 20 or so countries where IBM sales outperform the rest of the world by at least 10 percent. They already account for between 15 and 20 percent of IBM sales and will reach 25 percent in the near future, Palmisano said.

Cloud computing is much more than updated IT infrastructure ("not just Intel processors with VMware," he said). It's IT optimized for specific workloads, wherever those computing resources may be. Smarter planet means bringing computing power and embedded intelligence to everything from health care, to traffic control and municipal water systems, to supply chain management.

And next-generation analytics is allowing organizations to analyze data in real-time. "This is huge, ladies and gentlemen," Palmisano said with emphasis. "Don't underestimate this. This is huge."

IBM's Future On Jeopardy

Not "in jeopardy," but on "Jeopardy," the TV quiz show where IBM's Watson computer won a man vs. machine contest, broadcast the same week at IBM's PartnerWorld Leadership Conference.

Following his keynote Palmisano had a Q&A session with science historian and television host James Burke, and Watson's performance was a topic of discussion. The CEO said having Watson compete on the popular "Jeopardy" was intended to make people aware of the potential of such advanced computing capabilities.

"There's going to be a thousand ideas surface for how to use this technology," Palmisano said. Case in point: Last week IBM struck a deal with Nuance Communications, a developer of speech recognition and "clinical language understanding" systems, to apply Watson's analytical skills to health-care applications.

The IBM Ecosystem

Burke asked Palmisano how IBM helps its partners navigate the fast-changing IT industry. "I think the best way they can do that is to become part of our ecosystem," Palmisano said.

The CEO, for example, said channel partners should work closely with IBM's development labs, which he said have shifted from basic research to more emphasis on developing IT as part of leading-edge customer IT projects. By joining such projects Palmisano said solution providers develop the kinds of skills needed for the growth areas he outlined earlier.

He also encouraged partners to become better acquainted with IBM's product lines, including the 116 software companies IBM has acquired. "Do you know them all?" he said, almost tauntingly. "They represent great opportunities."

Final Words Of Advice For Channel Partners

Palmisano closed his keynote with a plea for channel partners to continuously innovate, and improve their skills and service capabilities. "If you don't innovate and look to the future, you won't exist because business is tough," he said. "Competition is ruthless and tough. If you don't invest and you don't look to the future, you won't exist."

"The lesson to me is differentiate yourself," he said, urging the attending partners to develop their skills and intellectual property to "move up the value chain. Being cheaper isn't enough. Being the low-cost provider is temporal."