SAN FRANCISCO – About 90,000 IBM business partners worldwide clamored for more business from IBM Global Services and IBM, at its annual PartnerWorld

conference, admitted they are trying to accommodate them.

IBM’s demand generation programs for e-business will now have a lead passing and re-marketing option. According to Peter Rowley, general manager of IBM Global Services, business partners with an active lead pass agreement can receive a fee for passing leads on an existing system that relocates to an IBM hosting site. If the business partner has a re-marketer agreement, they can retain the whole customer for reselling, services and maintenance. IBM will deliver the hosting service to that customer as a service to the business partner only.

“”The shift from an influencer-based strategy versus doing a lot of lead passing to IBM Global Services is really interesting,”” said Steve McHale, vice-president, research software partnering and alliances for IDC. “”This is to engage the business partner to selling more complete solutions and owning the customer. It is a difficult balance but it is the right approach,”” he said.

However, McHale added that other companies are specifically going after the same kind of business partners that IBM is targeting now. “”The message is, it is very hard to rely on IBM Global Services or discounting hardware or discounting other solutions and making it harder for business partners to play. A lot of companies are targeting IBM’s ability to play square. This is the kind of thing that they have to prove and it is a hard thing to do when there are so many dollars in the services area and everyone else is going after the same thing.””

Another area of concern for McHale is the splitting of different coverage models by IBM. “”They have to go out and find all these guys who have this vertical market expertise. That will be a lot of work,”” he said. At the event, IBM announced several initiatives to try and drive more business through the channel at the mid-market.

At the top of the list is a low cost entry-level mainframe, an area of business that resellers have been shut out of for years. The eServer Zseries 800 will be aimed at business partners looking to solve server consolidation problems for mid-market clients. The Z series 800 claims to eliminate under-utilized and expensive server farms by moving Web servers, e-mail and print or file servers onto a single mainframe.

“”The new eServer Zseries, code-named project Raptor, is a low price, mid-market product that will change mainframe computing for the business partner,”” said Rowley. “”About 75 to 80 per cent of Zseries 800 sales will go through our business partners. Last year, it was only 26 per cent of Zseries sales that went through partners.””

IBM also launched a full complement of sales, technical, educational and marketing support for business partners who want to distribute or resell solutions in the life sciences market. Last year, Rowley said a few 100 business partners signed up for this business area and IBM wants to increase its offering with the eServer platform.

“”Life sciences is getting about 19 per cent growth per year, but in 2004 it will be a $40 billion worldwide market. IBM makes some bets on markets and some make it and some don’t. This one is going to make it. I’m sure of it,”” Rowley said.

Middleware is another business area IBM wants its business partners to focus on. Last year, IBM doubled its market share for its flagship product WebSphere and hammered home the fact that worldwide industry will be spending more than $400 billion in middleware in the next two years.

IBM has created an advisory council called WebServices on WebSphere. The council includes more than a dozen ISVs, who will work with IBM to help other partners inplement Web services. Rowley is expecting this initiative to involve more than 150 business partners by year end.

IBM also developed an Industry Solutions Portfolio, where business partners can go in and choose from supply chain management, ERP, B2B and other solutions developed in tandem with IBM and top ISVs for corporate customers for SMB customers.

Two new IBM Global Services e-hosting offerings were also announced at PartnerWorld along with an e-sourcing initiative

With all these new initiates, Rowley said IBM is trying to uphold its partner charter, which they established back in 1996 and refreshed late last year. The goal of the charter is to expand IBM’s community of business partners, he said. “”We have tried to be consistent that is the message we want to bring across. We realize (the business partners) are small businesses that can’t change things we have to give them more notice so they can adapt,”” Rowley said.

“”IBM has the right approach here, but it is all about delivery,”” McHale said. “”We are hearing it from a lot of different software vendors about how to engage down to the integrators and other types of business partners. Everyone else has the same recipe. . . .IBM, to its credit, with the partner charter is showing that they are taking steps in the right direction and they have the credibility. But extending it as far as they want will be the real challenge.””

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