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After you! IBM adopts partner-first model

Katy Ring Profile picture for user Katy Ring April 12, 2024
Summary:
Drilling down on IBM's evolving partner strategy...

partners

Over the past four years, since Arvind Krishna has been at the helm of IBM, the company has undergone quite a transformation in its market positioning. It self-identifies as the Hybrid Cloud and AI company based on its two strategic platforms: Red Hat OpenShift and watsonx. These two platforms are the main enablers for digital transformation in the IBM portfolio.

Happily, in the IBM market proposition AI runs on hybrid cloud and hybrid cloud is powered by AI. And while IBM has had indirect channels to market for decades, to hear an IBM exec talk about IBM pursuing a partner-first model will be discombobulating for some older readers.  

IBM goes to market differently now

The market for IBM’s portfolio, as for the products and services of all tech vendors, has changed dramatically over the past decade or so. Contracts are typically smaller and shorter, whether for services, software or hardware, and a particular step change in the market is the move towards subscription services and as-a-Service models. These changes require a different approach to market in order to ensure that renewal rates and recurring revenue remain strong.  

Sebastian Krause, SVP and Chief Revenue Officer, explains that:

In order to create meaningful outcomes with clients, each client is supported by different IBM roles. These different roles work together to demonstrate technical acumen so that sales and technology cycles go hand in hand.

Each client in the top two of IBM’s customer segments will have an account technical leader who forms a strategy with the customer, discussing technical decision points in depth. Then there are the technical specialists who can show the customer different products and technologies. The client engineering team then steps in to develop a proof of concept and what that would look like in the client environment – these pilots are typically running at speed, delivering in less than 30 days. As Krause comments

We need to act like a speedboat, not like a tanker. 

Once the contract is agreed, the Customer Success Manager drives deployment and adoption of the IBM portfolio, and Krause claims that IBM has the biggest CSM team in the industry. 

IBM Partner Plus 

According to Krause, IBM has now embraced its ecosystem to a very, very high degree in its go-to-market strategy, a shift in thinking that began seriously four years ago with the company’s hyperscaler partnerships with AWS and Microsoft Azure.

Reflecting this shift, IBM launched its Partner Plus program in 2023 to better enable partners to not just sell IBM technology, but to also build on and extend IBM technology and thus to act as a conduit to accelerate both innovation and growth in the market. The investment commitment is to provide a simpler way to work with IBM, enabling the IBM salesforce to work with partners, and meet them where they are and how they transact. The idea was to help partners co-create with IBM engineering so that they could move into adjacent markets, taking IBM with them. 

Since the launch of Partner Plus, Kate Woolley, IBM’s GM, Ecosystem, says that over 1,000 new transacting partners have been signed, and partners are now in nearly 30,000 deals worth $3.6 billion.

IBM has ramped up its technical resources to create dedicated labs working with system integrators and software partners. Because of this IBM has been able to accelerate the development of EY.ai Workforce to create a digital worker platform for EY’s HR function; to support TCS’s roll-out of watsonx.ai for a multinational banking client and to help Wipro and many other partners build watsonx Centres of Excellence.

The new Partner Plus Service Motion update announced this year formalises deeper collaboration between IBM and its service partners, providing resources to accelerate the co-creation of service offerings and build advocacy for IBM technology. It also creates closer alignment among IBM sellers and service partners, providing shared KPIs around client engagement. IBM has created new specialised courses and badges for service partners around technical skills.

Woolley says:

We are working to make partners a true extension of IBM, with badges and skilling offered free of charge, for example. Clients want us moving faster and so demand generation is a huge focus for us. IBM is now partner-first outside of a few hundred accounts.

My take

The direction of travel is clear for IBM at the moment – the portfolio has been simplified to focus on its two main platforms as the tip of the spear to go to market. IBM Consulting’s primary role is presumably to work with the hundred top tier accounts where IBM is not “partner-first”. It is not clear how those accounts get assigned going forward, and the tricky point is always where the vendor considers that the account is large enough to now be taken over by its own services arm.

But these are challenges to be faced down the road. Indeed, the IBM Ecosystem is, according to Woolley, “looking for niche market leaders as much as multinational resellers and consultancies.” In the meantime, IBM is finalising how it tackles e-commerce in a unified way for the market and an announcement on this is expected later this year.

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