Getting a leg up in the mid-market has triggered a shake-up of IBM's SMB business unit and will see increased investment into indirect business partners this year.
Last month, IBM renamed its former US SMB business to general business group and split it into mid-market and enterprise units. Director of global business partners, Andrew Baker, confirmed the Australian team will follow suit.
"The general business unit will be a vehicle for us to get better delivery between what is considered our general enterprise and mid-market segments," he said. "We have put in place a mid-market leader in offices around the world."
The changes complement recent alterations to IBM's systems group, Baker said. Managers and sales team were aligned away from product lines and onto customer segments.
"Having a focus on customer needs in the systems group plays directly into our market strategy and our partner strategy and give us better SMB and mid-market delivery. And from a partner point of view, we align better to their business model," Baker said.
IBM defines mid-market as customers with 100-1000 seats, but Baker said the local sweet spot was those in the 200-500 space.
Baker said IBM's channel investment this year is concentrated on better enabling partners to address this customer segment successfully.
To achieve this, the vendor has brought on a dedicated enablement team across all product lines. Baker declined to disclose how many staff were on the team.
The team is backed up by added partner incentives through the Know your IBM program and a more hands-on approach with larger partners and distributors around enablement, he said.
IBM has also spent the past 12 months forging closer ties with over 100 tier-two partners sourcing product through distribution to generate new revenue streams. IBM had identified partners based on criteria such as acreditation and revenue targets, Baker said.
The plan this year was to increase investment into these organisations, he said. The vendor has already brought on additional business partner reps to manage indirect partners. IBM is also offering new partner tools including co-marketing offerings and training.
"It's tempting to invest heavily in traditional partners like the systems integrators who have been our primary revenue streams up to this point," Baker said. "We have made considerable changes to ensure that while we cover our traditional partners, we also add coverage through partners who can provide value revenue streams."
Baker said the changes should see more IBM business going through partners.
Another push by IBM last year was to have more of its own services going through channel partners. Baker said getting more IBM services out to market indirectly was a key priority in 2008. He singled out Internet Security, Maintenances and Server Services as initial areas of opportunity.
"Our services business through partners has seen double digit growth and we expect to see at least that again this year," Baker said.
To help the push on solution selling, IBM had also tweaked business partner sales plan, simplifying targets and putting the focus on cross-selling, he said. This saw new rebates and rewards for partners who leveraged the IBM portfolio more successfully, he said. Those who brought in new, competitive accounts could also expect extra financial rewards.
"We'll also have a strong focus on consulting this year and expect to run programs with partners on this," Baker said.