What IBM Partners Want To Hear At This Week's PartnerWorld

This week some 1,500 of IBM's elite channel partners are heading to New Orleans for the company's PartnerWorld Leadership conference. Just what would they like to hear?

While IBM has been on a steady course in recent years, avoiding the kind of turmoil that recently has roiled competitors such as Hewlett-Packard, channel partners still have concerns and are seeking reassurances about IBM's plans.

"We certainly want to know that IBM remains committed to the partner community and that its investments in the Software Value Incentive program and industry certifications are solid for the long term," said Hal Northrop, vice president of sales at Prolifics, a New York-based IBM partner that works with a broad range of the vendor's software products.

The conference will mark the first opportunity for most of the attendees to meet with -- or at least hear from -- Virginia "Ginni" Rometty, who took over as IBM CEO at the beginning of the year, succeeding Sam Palmisano, who remains as chairman.

The event also will be the first opportunity for many solution providers to meet with Mark Hennessy, the 30-year IBM veteran who Rometty named last month to serve as the company's new channel chief.

Just the fact that Rometty is scheduled to address the conference is a plus for Sam Fatigato, CEO of IBM partner Ascendant Technology in Austin, Texas. Fatigato noted that at last year's conference then-CEO Palmisano "did a great job articulating the five-year plan" and he's hoping for the same kind of vision from Rometty.

Tighter margins, neutrality for IBM sales compensation and commitment to partner development appear to top the list of things most partners want to discuss this week.

"At the conference we’d like IBM to address how IBM plans to help partners improve our overall margins, which continue to decline, while selling the full array of IBM offerings, much of which still contains a lot of IBM hardware and systems software for which there is less and less margin, fees, rebates, etc.," said Rick Kearney, president and CEO of Mainline Information Systems, a Tallahasee, Fla.-based IBM partner, in a written comment to CRN.

"The concern of bringing this up (again) is that there is a perception that all partners care about is money. Well, obviously we have to care about margin if we are going to meet our IBM targets and stay healthy.

"We are indeed growing in services and solutions, but are challenged to find profitable ways to partner with IBM on services and cloud solutions. IBM software is a growing area for us and is helping offset the declining margins for hardware, systems software, maintenance and [IBM Global Financing] financing," Kearney said.

NEXT: Reducing Conflict With IBM Global Business Services

While Prolifics' Northrop described his company as "a very happy IBM partner, " he said he'd like to see the company develop a more comprehensive channel neutrality policy that rewards IBM sales representatives equally for making deals directly or through channel partners. IBM has such a policy for what the company calls "general business," or SMB sales, but that's not the case for sales to the kinds of large companies that make up about 50 percent of Prolifics' business.

Northrop also noted that Prolifics invests heavily in developing its certifications under IBM's Software Value Incentive program and he is looking for signs of continued commitment to expanding the incentives for such efforts.

"We think they have some great channel programs," said Ascendant's Fatigato, "but sometimes the implementation of those programs has fallen short." In the past, for example, IBM sales representatives haven't always been educated on how to work with channel partners, Fatigato said. More recently, however, the company has been doing better in that area, he said. "And they're serious about getting bigger and better [sales] leads to partners like us."

Fatigato admits that he had some concerns about Rometty's appointment, given that her background included a stint as senior vice president of IBM Global Business Services. While Ascendant works well with IBM's software services organization, he said Ascendant sometimes finds itself competing with IBM Global Business Services for deals with larger customers.

"Will they compete even more with their partners?" Fatigato asked. "I'm hoping Ginni will help dispel some of that concern."

Mainline's Kearney is seeking guidance about IBM's directions in data storage and its System x servers, both of which he said are "encountering soft spots" within the product lines.

Fatigato is likewise looking for IBM to retain its commitment to open standards -- an issue for Ascendant because the solution provider integrates IBM products with other vendors' technologies. He's also seeking hints about what gaps in IBM's software road map might be filled by acquisitions.