IBM will be offering financial incentives to its business partners that sell hardware and software together, an initiative that is being well-received by partners.
Mark Hennessy, general manager of global business partners and mid-market at IBM (who is about 60 days into his new role) expanded on the hints given during the morning IBM PartnerWorld general session. Customers are looking for faster time to value and systems that are more optimized for their own needs, and the new incentives are meant to help drive that, he said. When components are integrated, it not only optimizes the solutions for customers but also provides a way for partners to differentiate themselves.
“Our focus is really clear. It’s around growth, profitability and simplicity,” Hennessy said about the various announcements IBM made on the first day of PartnerWorld.
Partners will receive a five per cent incremental rebate for selling eligible IBM systems and a 15 per cent incremental rebate for selling eligible software together to a single customer. Partners can gain an additional 10 per cent rebate for selling a solution aimed at particular IT challenges on the software element of the total solution.
“I think this is very good. It’s kind of a portfolio approach, I would call it. It’s a good incentive for people like us to try to make the move, or transform, to the other parts of the business at IBM that we’re not touching right now, because we’re not touching software right now,” said Pierre Cayouette, owner and president of PCD Solutions, an IBM business partner.
The monetary incentives are unlikely to turn everyone around to solutions sales, though. Cayouette noted that selling software is challenging and expensive, so every firm needs to make its own business case before changing its business model.
Francis Gingras, vice president of sales and business development at SERTI, an IBM business partner, said the new incentives fit into his business model in a way that SERTI should be able to take advantage of them. How well it works for SERTI will depend on which products are eligible for the incentives.
“There’s been programs like that in the past. It’s not something new per se. IBM, just like other big companies, they always come out with other new programs, new incentives. Now the question is in the details, and it’s a bit early for me to say,” Gingras said.
IBM also announced incentives around its smarter cities initiative, which the vendor expects to be a $57 billion market opportunity by 2014. A SaaS referral incentive related to the Intelligent Operations Center Cloud offering rewards partners with 15 per cent of the annual contract value of the sale. To help partners take advantage of the smarter cities opportunity, IBM Global Financing is providing zero per cent, 12-month, interest-free financing on smarter cities projects that are part of the IBM Software Value Plus Program.
“Through smarter cities initiatives, our partners will be able to get zero per cent financing for 12 months to help deliver solutions into those markets,” said Ed Abrams, vice president of marketing for the mid-market at IBM.