IBM chief touts standards, mid-market push

IBM chief touts standards, mid-market push

IBM is continuing to step up its efforts to develop technologies aimed at midsize companies and tailored to meet the needs of specific industries.

At its annual PartnerWorld event going on this week in Las Vegas, IBM has its most senior executives, including CEO Sam Palmisano, spreading the word to its business partners.

Business partners are valuable to IBM: The 90,000 companies that make up IBM's network of resellers, distributors and independent software vendor (ISV) partners are responsible for $US29 billion - or about one-third - of Big Blue's 2003 revenue.

Specifically, partners made or influenced 60 per cent of IBM's server sales, 23 per cent of its software sales, and 50 per cent of its sales to small- and mid-size businesses, Palmisano said.

"You're one-third of the IBM company," Palmisano said of IBM's partners.

In return, IBM spent about $2.4 billion each year in support of its partners, he said.

Pamisano stressed that partners need to be aware of what customers want: integrated, standards-based systems as opposed to the proprietary, piecemeal technologies of the past.

"The client is insisting on simple, standardized approaches. They no longer want to be the self-integrator," he said.

Palmisano also impressed on partners the importance of aligning with IBM's movement to standards-based technology.

"You have to commit to our point of view," he said. "You have to commit to open standards as a future computing model. If you do that, we will invest with you to help you become more successful."

Palmisano was cautiously positive about today's operating environment.

"Things are better, people are more optimistic," Palmisano said.

But despite the improving economy, it remained critical that companies stimulated growth in the IT industry.

One way IBM partners can stimulate growth is to free up customers' IT resources, which today are consumed by mundane integration work. If the integration burden is removed, customers can focus on more strategic development projects to drive their own revenue growth, which in turn will spur IT spending.

"That's what standards portend," he said.

On the topic of On Demand, IBM's ubiquitous utility-computing initiative, he acknowledged that there was confusion when IBM first introduced the On Demand concept 18 months ago.

Today, however, the On Demand approach resonated with customers,Palmisano said.

He met face-to-face with 164 CEOs last year.

On Demand is not any one technology, Palmisano said. Rather, it’s about the fusion of technology and business process - linking a company’s business processes internally and with its partners, implementing a standards-based infrastructure, and providing a secure, flexible way to buy capacity, he said.

"Clients want more flexibility in how they procure their infrastructures," Palmisano said.

Knowing what they want and implementing it are two different things, however. While companies now understand the concept of On Demand, many still don't know how or where to begin implementing it, he said.

That was the challenge for IBM and its business partners.

Within IBM, Palmisano touted key new innovations, such as its Blue Gene supercomputer and Project Symphony family of resource allocation tools.

He also highlighted $6 billion worth of recent IBM acquisitions which include PwC Consulting, application development tools maker Rational Software, database vendor Informix, and about a dozen other companies.

"We don't buy companies for revenue, we buy for capability," Palmisano said.

Consequently, IBM had the strongest line-up of products it's had in the 31 years since he joined the company, he said.

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