January 20, 2015 -by Tom Spring – CRN
IBM is for the first time ever bringing its hardware and software partners under one roof into a Global Business Partner Group in a move designed to push the $100 billion IT goliath into an age of cloud, big data and analytics.
“IBM is putting in place a more integrated approach to IT solutions, breaking down silos,” said an IBM partner who asked not to be identified.
The internal shakeup is wide-ranging, impacting IBM’s channel strategy and includes a reorg of business units and an internal executive changing of the guard. While IBM declined to comment on the shakeup, channel partners confirmed the moves and said that channel leadership remains intact with Marc Dupaquier, general manager of Global Business Partners at IBM, overseeing IBM’s channel business.
Late Tuesday, IBM will announce its fourth-quarter earnings where it’s expected to report its 11th straight quarter without a revenue increase, according to Wall Street analysts.
Channel partners confirmed reports that IBM has put in place a new internal structure within the company that is focused on a holistic approach to solving business problems centered on analytics, cloud, mobile and security. The move is meant to move away from IBM’s existing business unit approach that favored stand-alone hardware, software and services silos.
Partners said the new groups include Research, Sales and Delivery, Systems, Global Technology Services, Cloud, Watson, Security, Commerce and Analytics. Notable to the channel community is that IBM’s hardware and software channel teams will be rolled into a Global Business Partner Group.
By unifying groups, IBM helps customers piece together solutions that span IBM’s vast product portfolio. “This means centralized management of business units and a more unified strategic direction for IBM instead of having separate IBM horses running their own races,” said the partner.
“It’s a welcome change,” said another IBM partner that asked not to be identified. He said IBM was too often competing with itself on sales.
“We’d bring security deals to IBM and one [IBM] group would want to sell it as a service and another would want to sell it as a traditional software sale,” said the IBM partner that specialized in reselling IBM security solutions.
“Each IBM group was in a silo. They didn’t care if they walked into another deal. They didn’t care about confusing a customer. They wanted to make money,” said the partner. “We lost deals. Customers would have to wait for quotes and they would be confused. Ultimately, that pushed customers to the competition.”
Other tweaks to IBM’s channel include a greater emphasis on IBM’s regional sales reps. Partners told CRN that change will impact national solution providers that do business in multiple geographic areas. In the past, when a Chicago-based solution provider needed IBM channel support in Boston, for example, they would work locally with their Chicago IBM reps. Now partners will be encouraged to work more closely with geographic-specific channel reps instead.
IBM will be focusing more on where products and services are geographically landing and not from where they are launching, partners said.
“There will always be a geographic advantage when a rep has boots on the ground where you want to do business,” said a national IBM channel partner who will be impacted by the changes.
The partner told CRN that the number of channel partners that are receiving dedicated channel managers has been reduced. That means less support for remaining partners when it comes to in-house account management, according to partners. On the flip side, it means more support for those IBM partners selling higher-value solutions.
“IBM is putting more focus on less partners,” said the national partner that will be transitioned to receive less in-house support from IBM account managers. “They are relying a lot more on distributors. It’s unclear what the impact this will have on my business,” he said.
IBM has expanded further existing relationships with a number of distributors including Arrow, Ingram Micro, Tech Data and Avnet. For example, both Tech Data and Avnet began offering IBM’s VersaStack solution in December. Distributors have also begun selling IBM’s SoftLayer cloud services.
The change in coverage model, partners speculate, has to do with massive internal changes it has undergone over the past 12 months.
Last year, IBM divested its x86 server business and its chip manufacturing business. The reorganization dovetails major IBM investments in mobile solutions and analytics via its Watson group. Early last year, IBM announced a “workforce rebalancing” that reportedly led to a staffing reduction of 15,000 employees.
Over the past several years, Chief Executive Ginni Rometty has pushed IBM to realign the company for success in delivering big data, cloud, security and mobile solutions. The IBM restructuring comes as the company struggles to reverse over two years of revenue decline and at the same time realigns itself for changes within IT such as a move by companies to SaaS, PaaS and IaaS.
Part of the reorientation has included internal leadership changes.
Former head of IBM’s Systems and Technology Group, Tom Rosamilia, now becomes senior vice president of IBM’s Systems group. According to Rosamilia’s updated official IBM bio he has “global responsibility for all aspects of IBM’s middleware, servers and storage as well as the Company’s global Business Partners organization.”
Bob LeBlanc, who has been shepherding IBM’s cloud business and delivered a keynote at CRN’s Best of Breed conference in December, is now senior vice president for IBM’s cloud group, according to his IBM bio.
IBM’s Arvind Krishna becomes senior vice president and director of IBM Research. Arvind moves into his new role from his previous position as general manager of IBM Systems and Technology Group’s Development and Manufacturing organization, overseeing IBM semiconductor, server and storage systems research, according to his IBM bio.
Steven Mills becomes executive vice president of IBM Software and Systems. Prior to this position, Mills was senior vice president and group executive for IBM’s Software Group, according to his bio.
Partners sais that while they are waiting for the dust to settle on the shakeup, the moves are positive.
“How you solve business problems today is not how you solved them just a few years ago,” said a business partner that asked not to be identified. “Too often there is a wide gulf between customer expectations versus what IBM can deliver. Now, IBM can streamline messaging, expectations and the solutions to solve specific business problems.”