IBM Systems and technology Group head of sales, Raj Thakur, speaks to NADIA CAMERON about the vendor’s solution sales approach and how infrastructure partners can succeed in the changing market environment.
Why is selling a solution so important in today’s environment? Raj Thakur (RT): It is ultimately about clients – taking the client view, and looking at what clients want. If we just sold what we wanted to sell, it’d be easy. IT has become pervasive in clients’ organisations. Traditionally, each part of the business bought their own thing, then the IT department provided bits and pieces. That created a lot of complexity.
In addition, there have been huge shifts globally. The global economic crisis, for example, has shaken the foundations of our financial systems and how we go about things. The second big shock was security, with events such as 9/11. This affected how we look at security threats and risks not only to ourselves, but also to our businesses and communities. Then there’s the environment and the fact that everyone is concerned about carbon footprint and damage being done to the environment.
So you have complexity buying and acquiring products and services in the IT world, market shockwaves that have happened globally, and globalisation. Underneath that is the advent of technologies, such as the Internet, where everything is interconnected, and smarter networking. When you put those things together, you can see why clients want solutions. They are trying to solve a business problem – whether it’s cutting cost, increasing productivity, getting more sales in the door or doing more effective marketing – and they want it delivered quickly, effectively and safely. And ideally, they want it at the best possible price.
Why is it still so hard for partners to sell solutions? RT:I don’t think it’s hard, because there are some partners who do it really well. It’s about focusing and finding a niche. This could be on an application, industry or technology, but it’s firstly about finding that [customer] demand. The second thing is skills, and that takes investment. Solutions take a lot longer to sell – the minimum time frame could be six months – and that requires investments into people, skills and resources.
Many of our partners, particularly over the last two years, have not had the financial models to support the depth required to move into that market space. What you’ll find is the really big guys, like IBM, have large services businesses and can invest in long sales cycles. The challenge for partners is to build a business model that is financially sustainable, where they do what they’re doing today but also move up the value chain where the client sees long-term value. If you look at what CIOs want, it’s about innovation.
What are the key elements in selling a solution? RT:It takes time, it’s about finding a niche, and it’s also about finding alliances and partnerships. You can’t always have everything in one place in terms of skills. You have to back into vendors and forge partner alliances with those visionaries… who will lead us into the future.
Can you give us an example? RT:A solution is something that’s driven at a client level, typically as a business initiative. This could be looking for $5 million in sales per month. It takes a level of research and consulting to look at the business and find the things to change to help that growth. In some cases, clients will work that out themselves, or they might go to a partner. You can count that as a consulting solution. Then you look at the applications you need to use, such as CRM. It’s very separate to the consulting piece and has to be scoped out. That’s a different type of applications solution. Then we come to what I see as our traditional partner’s core business, which is delivering the infrastructure to support that including the server, storage and related software.
Is the solution the whole end-to-end? IBM does that, but we only do it for the top 500 engagements. We still need the channel to do most of that, but partners can’t do the whole stack. They need to find partners to build that capability. Partners also need to decide if they want to stay where they are, which could be challenging with new ways of delivering infrastructure like cloud computing. The questions we and our partners have to ask is whether to continue what we’re all doing – and there is opportunity there – or look to integrate vertically by working with more application providers, grow that applications capability internally, or look at consulting. You have got to be good at what you do in each of these three given pieces [infrastructure, applications and consulting], but where you will win more as a traditional infrastructure integrator is working hand-in-hand with an applications provider or consulting group.
What should traditional infrastructure players do to achieve a solutions focus within their part of the market? RT:I think one shift which many of our partners are already embracing… is virtualisation. We haven’t done enough of what needs to be done. What I mean by that is the entire infrastructure being virtualised including storage. There are a raft of skills that need to be brought into the organisation around software, because virtualisation is really about the software sitting on top of the hardware layer. So it’s the server management layer, then utilisation layer, followed by whether they’re able to charge back to other parts of the business, and energy consumption. When partners can provide that whole gambit of services, that’s a proper infrastructure solution.