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2/28/2005
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IBM Turns To ISVs And Resellers To Charge Up Sales

The company announced several initiatives, such as giving resellers access to industry specialists and providing volume discounts to smaller customers.

In an effort to increase revenue from hardware and software sold through independent software developers and system integrators, IBM on Monday introduced a number of programs designed to boost the sales and marketing clout of its business partners.

Because IBM doesn't sell applications directly like rival Microsoft, it's highly dependent on ISVs and integrators to help drive the sales of its middleware offerings--such as WebSphere and DB2--that support end-user applications. Speaking Monday at PartnerWorld, IBM's annual event for rallying business partners, Marc Lautenbach, IBM's GM for SMB markets, said the company's SMB and ISV programs "are the way we are going to drive software sales." IBM's software revenue grew just 1% last year when gains from currency fluctuations are excluded.

Among other things, IBM says it will expand its PartnerWorld Industry Networks program to include four new industries: Fabrication and assembly; wholesale distribution; media and entertainment; and education and learning. Under IBM's PartnerWold Industry Networks program, ISVs and system integrators can access IBM staff with industry experience to help tailor the offerings for specific businesses. Today's announcement brings to 12 the number of vertical industries IBM focuses on through its Industry Networks program. The initiative mirrors IBM's larger sales and marketing strategy. The company, in recent months, has been tailoring more of its offerings around vertical industries such as manufacturing and retailing.

IBM also unveiled a number of programs aimed at helping business partners that focus on the small and midsized business market--an increasingly important segment for the company. IBM says it will offer a range of preconfigured server and storage systems to resellers. Platforms sold under the new System Seller program will feature volume-style pricing discounts but won't require high-volume purchase commitments, said Susan Whitney, a general manager within IBM's systems and technology group. "They will be priced as units of one," said Whitney, speaking at the PartnerWorld event in Las Vegas. Whitney said more than 50% of IBM's server revenues are derived through business partners. Products available under System Seller include IBM's TotalStorage storage products and eServer XSeries, OpenPower, pSeries, and BladeCenter servers.

IBM additionally unveiled a program Monday that it says will make it easier for its business partners help their customers meet growing data retention and compliance requirements. Under a pilot initiative, IBM will help ISVs and system integrators build what IBM is calling Centers of Competence for Data Retention. Under the program, IBM will help application developers enhance their products' abilities to retain and recall data to meet compliance and reporting requirements for industries such as accounting and health care. The program will also give IBM's business partners access to the company's Risk and Compliance Framework, which is designed to map IT requirements to the compliance mandates of various industries.

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