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2/15/2011
03:37 PM
Michele Warren
Michele Warren
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IBM To VARs: Services Are Secret To Success

IBM has a message for its channel partners: Sell services! It's not exactly a new message, but it's an important one, and the vendor is putting more muscle behind it than ever before.

IBM has a message for its channel partners: Sell services! It's not exactly a new message, but it's an important one, and the vendor is putting more muscle behind it than ever before.At the vanguard of IBM's services "movement" is Bob Hoey, general manager of Global Technology Services, General Business. He focuses on the company's midmarket customers--those with 1,000 employees or fewer--and the solution providers that serve them.

Truth be told, IBM would like a (much) bigger piece of the services pie than it's currently getting. According to IDC and other analyst firms, global tech services constitute a $450B market (yes, that's billion). Hoey says IBM has managed to capture only about 10% of that space, and the key to getting more is empowering the channel. "We've been pushing services for a few years now, but we just haven't executed well enough in the market," Hoey says. "We need to help partners understand our offerings. And we need to give them the resources they need to be profitable when it comes to selling services."

One such resource that solution providers are clamoring for is training. "As our partners continue to shift away from hardware and toward services, they'll need to recruit people with diagnostic and consultative skills. They'll need deeper industry expertise, too, and getting this kind of talent is going to cost more money," Hoey says. "Partners are asking how long they're going to be in a negative cash flow situation as they invest in this business transformation. It's going to be probably anywhere from 6 to 18 months, but we can reduce the investment they have to make by training their teams."

Hoey says IBM is working hard to get the message out to its partners. He and other IBM execs are meeting with partners this week, at the vendor's PartnerWorld Leadership Conference, and conversations will continue well into the new year. "We're especially eager to share success stories," Hoey says. "What better way to demonstrate the promise of selling services profitably than to provide examples of channel players who are making it work?"

Within the services arena, IBM has defined a few high-growth areas that partners may want to focus on: cloud computing, security, and analytics. The cloud space is expected to grow at a clip of 25 to 30% year over year, and Hoey says opportunity abounds for IBM--to implement private clouds, deploy and support hybrid cloud environments, sell capacity for an IBM-built public cloud, etc. In the security space, customers with a fiduciary responsibility to protect client data are approaching IBM for solutions. And as for analytics…well, what vertical space isn't looking to extract more value from its data stores?

"There's definitely a mindset change taking place in the partner community," Hoey says. "The channel is seeing that services aren't just a way to sell more product. They're stand-alone profit generators. But we need to help solution providers take the leap, and do it successfully."

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