Last week, IBM used its annual PartnerWorld conference for its Business Partners to unveil new directions for its marketing and product strategies. The changes could have a significant effect on small and medium-size businesses in general and iSeries users in particular.
As IBM executives made clear on the first morning of the conference, its new strategies are an outgrowth of changes that the company is making to its "On Demand" campaign. By several measures, that campaign has been wildly successful. For instance, many technology consultants now use "on demand" as a generic phrase to refer to new IT solutions—particularly those that are remotely hosted—from IBM and its competitors. However, while such imitation may be the highest form of flattery, it has also diluted the value of "on demand" to the point where it could mean almost anything and is therefore in danger of meaning nothing.
To inject new value into On Demand, IBM is changing the way that it talks about itself and its solutions. It is launching an advertising campaign that depicts the company as a resource for organizations that need to develop innovative solutions to differentiate themselves in their markets. The ads pose the provocative question "What makes you special?" and then offer a simple answer. Innovation is what lets companies differentiate. Moreover, innovation is most effective when it draws on ideas from people—working both inside and outside an organization—who collaborate with each other. Naturally, IBM positions itself as the ideal partner for such collaborative innovation.
To add substance to its positioning, IBM used PartnerWorld not only to unveil the new ad campaign, but also to announce two programs that will involve Business Partners—and by extension, their customers—in collaborative innovation efforts. The first program—which IBM's PartnerWorld Industry Networks group will manage—will enable partners to work more closely with IBM on service-oriented architecture (SOA) solutions that use the company's middleware products. Partners will also be able to qualify for an SOA Specialty that will give them special access to IBM marketing and sales assistance.
As part of the program, IBM will also deploy SOA Business Central, a catalog of technology assets that will include Web services, application connectors and adapters, and models of best business practices for multiple industries. The catalog will not only include over 3,000 IBM assets, but will also offer assets from contributing SOA Business Partners. Both partners and customers will be able to search, download, and install services from the catalog, which IBM intends to make available in May of this year.
In addition, IBM announced that PartnerWorld Industry Networks will launch a program that lets partners collaborate with experts in its Research Division for the first time. The program, which opens shop in the second quarter, will let partners work directly with scientists and business experts from IBM's labs to develop unique solutions for their joint customers. As part of the effort, IBM will open Research Innovation Centers, where qualified partners and IBMers can work together on customer problems. The company launched a prototype for such centers in China over a year ago that develops solutions for small and medium-size businesses.
While IBM talked a lot about collaborative innovation at PartnerWorld, it also focused on two topics that are perennial issues for partners: profitability and sales opportunity management. To address both, the company announced the Software Value Incentive plan. Under the plan, partners will be able to register software sales opportunities with IBM. This will ensure that they realize profits from IBM software sales even if the customer chooses to purchase the software from another firm. The plan addresses situations in which an IT provider works with a customer to define a software solution only to have the solution put out for bid to resellers.
By collaborating more closely with its Business Partners and ensuring that they profit from their collaborations with customers, IBM is hoping to increase the loyalty of existing partners and to recruit new ones. Indeed, IBM executives stated at the conference that they intend to recruit 5,000 new partners, with many of them coming from Big Blue's competitors.
A Strong Tailwind for the System i
The interesting thing about IBM's new strategies is that they are not so new for the System i Division. After all, the group kicked off its own Initiative for Innovation at last year's PartnerWorld with a pledge to collaborate more closely with Business Partners on solution innovation. Since then, more than 1,700 new or enhanced solutions have been developed for the System i, with 600 of those running on i5/OS. Another 500 new or enhanced applications are in the pipeline. And while IBM cannot yet claim sustained double-digit revenue growth for the server, it has logged several quarters of positive sales figures.
This kind of progress should make the System i a poster child for IBM's new company-wide campaign, though it is not clear that the company will treat it as such. At the least, it ensures that the System i Division will have IBM's full support as it expands its own Initiative for Innovation in 2006. This could play a role in helping the System i win its fair share of the new partners that IBM intends to recruit this year. Of course, many of the new partners will have an Intel server heritage that leads them to partner most readily with the xSeries Division. However, as IBM revamps the System i to make it a mainstream server for industry-standard SOA applications, software vendors could find it an increasingly attractive platform.
In short, IBM's new initiative is a welcome confirmation of the strategic direction that the System i has already taken. Moreover, it is a confirmation that could strengthen the server's hand as it competes for new workloads. Needless to say, it is nice to see the server ahead of the corporate curve rather than behind it.
Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at
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