IBM Expands Incentive Program to Worldwide Partners

In an effort to further encourage global sales and partner profitability, IBM recently extended its Software Value Incentive (SVI) program, which delivers financial rewards to partners that help create sales of IBM solutions to clients in more than 122 nations.

“Partners register a deal opportunity and can earn up to 40 percent of the value of the software,” said Mark Hanny, vice president of strategic partners at IBM. “The program’s meant to really help financially reward our partners who identify opportunities early in the sales cycle.”

While 40 percent is at the high-end of the dollar spectrum, rewards are generally in the 20 percent to 30 percent range, he noted. And many of the more than 2,000 participants in the pilot , which IBM rolled out in the United States, Canada, United Kingdom and Australia, saw the sales cycle shrink by up to 30 percent, Hanny said.

“We’ve literally been paying out millions and millions of dollars in profit to these companies,” he added. “Partners are achieving the 40 percent reward. It’s very achievable. It’s really not that difficult to achieve rewards of 25 percent or 30 percent.”

In 2007, 43 percent of IBM’s sales were generated in the Americas; 36 percent came from Europe, the Middle East and Africa, and 21 percent  were from Asia Pacific, according to the White Plains, N.Y.-based vendor’s annual report. In total, 63 percent of IBM’s 2007 revenue was earned outside the United States, the report found.

Over the past 12 months, IBM grew more than 10 percent – in local currency – in more than 50 markets such as the Czech Republic, Poland, South Africa, Malaysia and Venezuela, the company said.

“Doing business in the developing world is about relationships, not just transactions,” Samuel Palmisano, IBM chairman, president and CEO, wrote in a letter to shareholders. “You have to engage at the level of culture, as well as process. You have to be integrated on the ground, working shoulder-to-shoulder with local suppliers, governments and communities, and understanding their point of view on business and innovation.”

The SVI program is now open to businesses in nations such as Vietnam, Egypt, South Africa and the United Arab Emirates. The program provides localized support to help companies meet local demands and increase the revenue they generate from sales opportunities, according to IBM. These financial rewards allow partners to reinvest in their organizations’ growth.

In addition, the program helps IBM partners in the U.S. reach across international borders, either by partnering with a local company or opening a subsidiary or division in another nation, said Hanny. “We are helping ISVs and partners in the United States sell into these high-growth countries,” he said, noting that in China alone more than one-third of companies bought new business systems last year.

Membership is simple: To participate, solution providers and ISVs must join IBM’s PartnerWorld program’s Advanced Level, said Henny. The hands-off program does not require a lot of paperwork or criteria, enabling participants to advance at their own pace and direction, he said. “We’re not making companies change their business model in order to participate,” Hanny added.