"We're All In," New IBM Global Midmarket GM Says
Crafting successful business outcomes keys vendors strategy as it lays out multi-billion dollar midmarket opportunity for channel partners. Plans center around channel involvement and meeting IT solution requirements of mid-sized businesses, says IBM's Andy Monshaw (pictured).
IBM Corp.s sharpened attention on midmarket businesses stems from a close analysis on how best to deliver successful business outcomes to the relatively untapped segment, said Andy Monshaw, IBMs new global market general manager, in an IT ChannelPlanet interview.
We have carved out this segment to focus solely on clients of this size, who prior to IBM doing this, got attention from our competitors playing with the opportunity as they came upon it, he said.
Were all in--with a focused business unit, qualified channel partners, business analytics, co-marketing funds, training and certification, said Monshaw, IBM Japans former chief operating officer, who has shepherded the companys global midmarket business for the past three months.
Monshaw said that IBMs multi-pronged strategy to deliver positive business outcomes to mid-sized clients centers around channel involvement, and addressing key IT requirements, including always on availability, security, collaboration, leveraging key technologies such as cloud computing, and making actionable use of data.
In the past year, the vendor has talked openly and frequently about its midmarket strategy--intending to spend upwards of $130 million on marketing and demand generation for channel partners--some of which it already has doled out in increased co-marketing rewards for channel partners selling into the segment, special financing options, targeted solution bundles, System x and Dynamic Infrastructure certifications, and a team of 50 territory reps to work with business partners in key locales.
Midmarket clients have the exact same problems and requirements of large customers except they dont have the core domain expertise, Monshaw said. We talk about business outcomes in this customer set--speeds and feeds matter but not as the pivot point in the conversation.
IBM figures that mid-sized businesses, as a group, globally will spend some $156 billion on information technology this year. The vendors internal data, derived from a series of research studies of midmarket chief executives, chief information officers and chief financial officers, partner conferences and advisory councils, pegs the segments services revenue potential in excess of $100 billion annually.
Channel partners key to midmarket strategy
The vendors reliance on channel partners to execute its midmarket strategynearly three-fourths of its sales from the segment spring from solution providersis based on mid-sized clients interest to work with local, trusted partners with both a broad and narrow expertise and brand staying power, Monshaw said.
The depth of the relationship is important, he said.
Right now, about 10,000 IBM channel partners worldwide, roughly segmented into three groups, sell to mid-sized business customers, Monshaw said.
The lions shareMonshaw declined to provide the number--are traditional resellers whose business models are evolving to include IT services and who compete based on the differentiation of their offering and their relationship with clients.
Some of these partners only dabble in the midmarket because their focus is with larger enterprises, while others lifeblood is with mid-sized businesses, Monshaw said.
A second, smaller group, comprised of channel partners evolving into new domains such as cloud computing, is engaged in understanding where they fit in the value chain, he said.
A third subset, partners with end-to-end domain expertise capable of providing vertical applications, consulting services, technical implementation, business process re-engineering, hosting, cloud computing, help desk and similar services, is an active but far smaller portion of IBMs channel stable, Monshaw said.
We work actively with traditional resellers and are moving to involve more of the second and third groups, he said.
The important thing with midmarket clients is we get itwe understand who mid-sized businesses want to work with, we understand their pain points, and we understand about marrying capabilities and offerings with local, trusted expertise to deliver positive outcomes, Monshaw said.
Next steps in the midmarket
Monshaw said that IBMs next moves in the midmarket involve executing on three frontsremaining consistent with its strategy as outlined, constructing suitable solution offerings for the segment and extending its reach through channel partners.
Weve called the play--using business analytics to enable partners around solutions--and we intend to stay with the play and improve it, he said.
IBM also will use its Cognos Express suite to drive business performance indicators and metrics from customer supplied data to deliver actionable information, Monshaw said.
The most important component of its midmarket plan is to help boost channel partner margins, properly enable existing partners and prepare evolving ones, he said.
We will continue to help the traditional reseller class of partners earn sufficient margins and help the evolving set of partners become adequately prepared and compensated to participate in the next generation of computing, he said.