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IBM: Channel is a critical part of any success

Vendor is directing its partner base to embrace the hybrid cloud approach to safeguard their futures

IBM’s recent headlines have largely concerned its activities on the software front, with the acquisition of Red Hat and its continued push into the middleware market.

But for many in the channel, their relationships with Big Blue were formed over hardware and the vendor is keen to stress that it still has a play there and is continuing to work with partners.

Ivo Koerner, vp hardware, IBM Systems Europe, has provided an update on the vendor’s current position and the importance of the channel to its continued success.

“We are a company that is 100 years old,” he said. “We’ve done various transformations in our industry. And when we introduced a couple of big platforms in the past, invented a lot of technologies. There is one fundamental thing lying across those transformational changes – our focus is always to increase the value that IT can bring to our clients and help them be successful in the industry.”

In the past, IBM had a stake in the laptop and desktop world and had a major role to play in the mainframe market, and there continue to be opportunities for partners in that space.

“The company introduced and is still leading a path in the mainframe world, which has been questioned a couple of times, declared to be dead,” said Koerner. “But we are still doing a lot of successful business with it and there are a lot of pieces relying on the infrastructure we are providing.

“A large percentage of all credit card transactions run on IBM infrastructure on mainframes. Everything is basically targeted to be enterprise ready and an enterprise supporting infrastructure and software stack.”

When it comes to cloud, IBM is following a strategy to build a hybrid cloud to make sure it can reach out to customers that want multicloud hybrid environments.

“We want to give clients the freedom of choice to deploy applications and workload on the infrastructure, be it private cloud and public cloud that best serves their interests,” said Koerner. “We are putting a lot of focus and emphasis into it and that’s why we did this major investment in Red Hat, which we acquired two years ago.”

He said IBM had always taken a platform-type approach around the middle layer and had mainframe in the 1980s and 90s, and now it was Red Hat with container technology and Open Shift.

“The minute you migrate and transform your existing workload into a containerised workload, you have the ability to move workloads to the platform that gives you either the lowest cost, the highest security, the highest reliability, whatever you’re saying is appropriate for that workload,” he said. “As a company, we are transforming more to be a hybrid cloud company.

“If you move the workload into a containerised world, you need different backup and recovery mechanisms because you need to store data not as a file, but you need to address that you have data in the containers that you sometimes need to extract and back up. So what we are busy building from a hardware and infrastructure perspective is a foundation that allows you to leverage the container workload and containerised applications.”

That is where IBM has got to today and the future will involve more of a move into the hybrid cloud world and reacting to changing consumption models, said Koerner.

The company has changed over the past few years and there are always questions about how much its channel base has moved with it.

IBM helping during Covid-19

Like many vendors, IBM has stood by its channel during the pandemic and offered support, including zero finance offers to keep the orders flowing.

Ivo Koerner, vp hardware, IBM Systems Europe, said partners are a vital part of its business and it wants to make sure they get the help they needed during the crisis.

“We have really invested in them now, so we have changed programmes to make it attractive to develop your skills in the future and make it still attractive with high margins,” he said. “We are trying to optimise as much as we can at this specific time.

“It’s fine to maintain the success of our ecosystem because for us it is a strategic and very important part of our go-to-market plan.”

Koerner echoed the views of many working with partners when he described movement across its channel base, but not all at the same speed. “We have many partners who have really come along with us on the journey and are investing a lot in enablement and skills,” he said.

“We are trying to help every partner with their transformation and there is still a high proportion of classical resellers – so it is a mix, but in the long run, every partner needs to build up their hybrid cloud capabilities.”

One of the challenges has been to make sure partners are given flexibility and to avoid falling into the trap of setting up too many silos in the way the channel is seen by the vendor, said Koerner.

“If you look at it from a traditional perspective, in the past every IT solution or product provider tried to containerise their ecosystem in buckets, so you were either a reseller, a distributor, a service provider, or whatever,” he said. “I think a lot of those models are converging and there is no clear difference. We have business partners today who have their own services arm because I think that’s important and they need to be successful in the future.”

Koerner warned that the pressure to change is mounting on partners. “Just selling a product is not going to be sufficient to be successful in this digital transformation world of the future,” he said.

The channel continues to matter to IBM and partners have a role to play in the vendor’s success, he stressed. “They are very important and a critical part of our success. We do not usually disclose numbers on business partner participation, but let me just say for the geographical unit that I’m talking about for my business, they do the lion’s share of the revenue.”

Big Blue is making sure its internal sales teams can co-sell more with partners and is incentivising those that drive business with the channel. The vendor is also looking to make sure it can provide partners with high margins and the support they need to continue to bolster their hybrid cloud skills.

Koerner concluded: “It is a co-sell and it is an utterly critical part of the business we are currently doing and an even more important part of the business in the future.”

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