IBM's director of global business partners for Australia and New Zealand, Andrew Baker, has a major role to play in leading local channel strategy. In the first part of an in-depth interview with ARN's BRIAN CORRIGAN, he talks about its evolving strategy.
What can we expect to see from IBM in the next couple of years?
Andrew Baker, IBM (AB): Given that we have such a broad portfolio, our product strategy is aimed at delivering value. We have already taken some initiatives to build better collaboration between our products and across our lines of business but I would expect that to continue. You will see IBM focus product suites more around client requirements and less around individual flavours of products for different markets. In our server division, for example, we have set up Business Servers and Enterprise Servers. One of the reasons for that is to help us focus on SMB. It's the biggest market in ANZ and it's growing the fastest. That growth is about 6 per cent and it is worth in the region of $8 billion. Our definition of SMB [up to 1000 seats] includes the commercial market and it's very much the space our partners play in. Business Servers is being set up as a business unit around the world to make sure we have a strategy that really addresses that market.
One of the defining trends within IBM at the moment is the focus on SMB. It's probably the biggest binding strategy across the company at the execution end of our business. While there is plenty of opportunity left to tap, and ways to deliver value to the channel and clients, we already have a substantial footprint in SMB. It accounts for something like a third of our business in ANZ.
Are there any particular areas of technology we can expect to see Big Blue focus on?
AB: From a strategy point of view our technologies are fairly set so it is more a case of expanding and developing on what we have. There are five major lines of business within our software suite and we are continually expanding that. We have made about 60 acquisitions in software alone during recent years. Our strategy has been in place for some time but we are in the evolution business.
In the hardware space it's pretty much steady as she goes albeit with an increased focus on blades, which we see as a unifying strategy for our server business. They deliver substantial consolidation benefits with green opportunities in there as well. Our point-of-sale business is also performing very well and we are seeing a lot of growth. We are also seeing expanded opportunities in the area of information kiosks and have done some interesting client projects recently using RSS technology. Organisations with large numbers of employees want to be able to provide a portal into their systems and often put kiosks out into their user locations.
My sense is that our partners are able to build their businesses around a business that is by no means static, it is changing quite dynamically, but it is also predictable.
You have been involved with the IBM partner community for a number of years now. Have you seen the make-up change and how will it continue to evolve?
AB: Definitely. I think we have stronger relationships with partners. We are not on a recruitment drive but in the past we have constrained our coverage to a smaller number of partners at the top and we have managed to drive that down and build a stronger base.
The other change is the transformation of that channel into a group driven by solutions. There will be hardware opportunities for a long time to come, I don't think there's any doubt about that, but services is the next big play. Partners have moved to address that and we are moving our focus to look at programs we can offer the channel around IBM services. That is a logical extension of where we are; it's where the vendors need to go and the partners are looking for it.
We have improved our ability to create opportunities that can be delivered by the partner at the point-of-sale. As clients look to make platform decisions, buy hardware, acquire systems management tools and source financing and so on, we are looking to build those offerings, channel enable them and get them to market. That's really acknowledging the need to build a services through the channel line of business. There are a number of possible models but obviously we are conscious of the reseller's relationship with the client and preserving that. We have the potential to provide offerings like business resilience and continuity that require server-farm breadth and depth that many smaller managed services providers are unable to carry but we can provide them with that capability. They can on-sell that and package it as their own. There are going to be lots of opportunities.