IBM is planning to shift more than 1,000 direct enterprise clients to partners in order to to gain traction in the hybrid multi-cloud marketplace.
Coming as part of a new program due out next year, the changes follow the recent appointment of David La Rose as IBM global partner ecosystem general manager.
“[The move is] a big deal and we haven’t done that before,” he told ARN. “In the 100 days that I’ve been in this role, it’s the one asset that partners want.
“We’ll be doing joint planning and introductions with key partners, associated clients and client teams,” he said. “We’re differentiating our program through access to our incumbency.”
This marks a significant shift in IBM’s approach to the channel and just months in the top channel role, La Rose has signalled four key areas of focus for the business.
These centre on his ambitions to "win the cloud battle" and mark a "significant" upgrade to the company's PartnerWorld program.
More details on what the new program will feature will be released next year, he said.
“We’re going to do a significant upgrade to our partner program,” La Rose said. “It’s being formulated at the moment. We have this ecosystem today of global systems integrators, small and mid-size cloud service providers, distributors, resellers -- they’re at different levels at what they want to do with IBM. Today, through PartnerWorld, we’re only servicing distributors and resellers and don’t cater for anyone else.”
La Rose was appointed to the top channel role for IBM in July, succeeding John Teltsch. He explained that there is still a long way to go for IBM to catch up in the public cloud landscape and as its portfolio shifts from software to ‘cloud packs’, the expectation remains this will ramp up in the 12 months ahead.
To give some perspective, IBM has about 10,500 active partners that represent just over US$12 billion in revenue and contribute at least 15 per cent to its overall business, including its services portfolio.
La Rose pointed out the acquisition of Red Hat was the last piece of the puzzle in its hybrid, multi-cloud story, adding: “For the first time, in a long time, it has also brought in some channel-centric thinking.”
For Red Hat, more than 70 per cent of its business is driven through the channel partner and open source ecosystem.
“That thinking is really now starting to influence how we package our offerings, which I think is the genesis of what some of the work being done around the cloud packs,” he said.
These six cloud packs include security, integration, data, application, automation, and multi-cloud manager.
“We’re trying to make it a lot easier to consume our software in a way that the market is now consuming software, and we have to enable our partner ecosystem to scale that business,” La Rose said. "Some of them are doing it today -- cloud service providers, system integrators, joint IBM and Red Hat partners are key there.
"We’ve also got to bring along our traditional resell cohort, get them enabled and savvy around what that business model looks like [and move] their business to consumption versus resale," he said.
Currently, La Rose said there is only about a 30 per cent crossover between Red Hat and IBM partners, and it will look at scaling Red Hat into markets where it doesn’t exist at the moment. Red Hat operates in about 49 countries, whereas IBM operates in 170.
“We’re clearly in the enterprise and we’re helping them to scale in that, and Red Hat is front and centre in the mid-market space (less than 1000 seats), which is where we’ve always struggled to get access to,” La Rose said.
In the next 12 to 18 months, La Rose said he would like to see IBM reach number three in the cloud marketplace; opening more of its direct enterprise accounts to partners while providing skills and enablement are some of the initiatives IBM will undertake to make this happen.
“We’re coming from behind from a public cloud perspective and we’ve got to catch up,” he said. “We have an incumbency in the enterprise with a trusted set of clients that need and want help to move to a cloud environment. They have only really moved about 20 per cent of their workloads, and now it’s time to do some of the heavy lifting.
“We can’t do that alone and we need the ecosystem to work with us.”
In conjunction with this, La Rose is also aiming to create the “most skilled ecosystem in the market centred on the hybrid multi-cloud world,” through its Skills Gateway concept that provides a single source of information and training online and face-to-face.
“We will require a minimum level of skills and capabilities to participate in the program. Today that’s very siloed by our different brands and we’ve got to try and get some more integration around that with capabilities as opposed to just certifications,” he said.
Certifications and specialisations are an area that will be targeted for modernisation under the new program, La Rose said.
“What you’ll see from us is a consistent message going forward. We’ve got to win in the cloud market, we’ve got to engage our partners in that and give them access to different parts of our install base, and a belief now that we have an offering that is not only competitive, but differentiated with the Red Hat acquisition,” La Rose said.
“We’ve always been seen as a pretty profitable vendor to work with and you typically had two options - you could make good money from the resale and integration of our products and you could also make money from a services business that you were creating around it,” he said. “We’ll continue to be a lucrative partner to play with.
“We think we can offer more than just rebates and incentives, and the key thing we want to offer is our install base.”
Earlier this year, IBM opened up its internal sales enablement platform, Seismic to its partners.
IBM A/NZ general manager of global business partners Alison Freeman added that Seismic extends beyond enablement to also providing white papers, case studies and marketing materials.
“We’re essentially extending a lot of enablement that IBM has had to our partners,” Freeman added. “It’s everything at their fingertips that they might need to take to market to their clients.”
IBM relaunched its public cloud platform, which Freeman admitted hasn’t traditionally been partner friendly, but partners can now gain a year’s worth of free access to the public cloud that they can develop and use with their clients to do proof of concepts and sandbox, among other tasks.
In May, IBM went live in Sydney with its multi-zone availability region for the cloud, which is made up of three networked Sydney data centres.
“It is one of six in the world, which gives customers high availability across their mission critical applications across the different multi-zone regions,” Freeman said. “It’s an investment from IBM back into A/NZ and something that we’re working with our partners and their clients on how to utilise that.
“There’s a lot of investment that has come in and it’s very different from the IBM cloud of several years ago.”