IT market to swell to US$1.1 trillion: IBM

SAN FRANCISCO — Amid a tap dancer, interpretive drummers, trumpeters, a voice artist and synchronized flag wavers, IBM Business Partners general manager Peter Rowley tried to demonstrate the energy level of upcoming market opportunities for business

partners at the IBM PartnerWorld keynote address on Monday.

Rowley said that this year’s IT opportunity will be US$1.1 trillion. Storage will account for 24 per cent of all hardware spending in 2002, while security spending will increase by 30 per cent and wireless solutions will increase 75 per cent all in 2002.

Predicting market trends isn’t all there is to making money, as IBM has found out. Last year it asked its business partners how they made money and the results came out of the blue. It discovered that the cost of doing business with IBM was high, it was too competitive with other partners, had too many special bids from IBM itself and that they were not managing the leads well.

“”This time last year we did not understand how you made money. Now we know how to trigger profitability,”” he said.

Last year, IBM partners contributed 56 per cent of the eServer business, more than half of the storage and a quarter of all of its software sales. This in turn helped IBM to gain on its competitors in servers, storage and global services, and financing.

“”But,”” Rowley said, “”we need our partners to help us do better next year.””

IBM has made some changes towards this goal. One was to integrate sales and marketing with its business partners. IBM is planning to invest more than US$100 million on this initiative. It also created a council along all IBM product groups to see how it can improve business with its partners.

“”The ease of doing business is never, ever, going to get better with IBM than a single product company, but we are improving,”” Rowley said.

Rowley added that it is a two-way street and the business partners have to invest in skills, especially in Linux, wireless platforms and across multiple IBM brands. He expects a 40 per cent increase in partner certification for 2002.

E-business will be another big market opportunity, said Abby Kohnstamm, senior vice-president of marketing for IBM. Research, she said, has told us that spending on IT will double and that most companies are still in the early phases of e-business and some have not begun.

“”As you would expect, larger corporations are further along and the rest worry about security and cost — all issues a partner can solve. The next stage of e-business evolution will be worth US$115 billion by 2004. E-business integration is a real sweet spot in the market,”” Kohnstamm said.

Middleware will be another big area of growth, she added. Industries are spending more that US$400 million in the next two years on middleware.

Kohnstamm also announced two partner initiatives to help with these opportunities. First is an e-business profiler program, where companies can go in an find tried e-business solutions or find a partner that can add a critical part of the solution for a customer. The Web-based program currently has 60,000 profiles and every month 15,000 use the site to find partners and solutions.

“”The idea is to help (partners) to collaborate with IBM and use the Web-based solutions with other business partners,”” she said.

The second is Campaign Designer, which can capture the opportunity and create and track campaigns for marketing and sales.

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