IBM Drives Toward Big Data, Mobile, Social Technologies

IBM continues to transform itself by going after higher-value opportunities and Big Blue is moving into these new spaces with its ecosystem of business partners in tow.

At the IBM PartnerWorld Leadership Conference 2013 in Las Vegas, Bruno Di Leo, senior vice president of sales and distribution at IBM, said the company is looking at three primary imperatives: to lead in the new era of computing, to reach new kinds of clients and to demonstrate new types of expertise.

New era

“IBM will lead in the new era of computing,” Di Leo said, noting that big data, business analytics, social business and mobile represent a new era that IBM is going all out after.

The new kinds of clients include customers in growth markets. Di Leo said IBM gets about 65 percent of its revenue from major markets and 35 percent from growth markets. He noted that IBM has had a presence in Africa for more than 60 years, but up until four years ago the majority of its efforts were in a handful of countries, now IBM is present in 24 African nations.

“It’s not only a geographic statement, but the move toward new clients is also about making IT relevant for the CMO [Chief Marketing Officer], the chief of police” and others, Di Leo said. “Last year the CMO was responsible for deciding on $38 billion of IT investments and in a few years they will be responsible for $80 billion in IT spending.”

Regarding the new type of expertise IBM is looking to deliver, Di Leo said IBM has to get better at knowing its clients’ business.

“We want to be the most essential company in the industry,” he said.

Business partners come in on all three of these imperatives, he said, noting that IBM cannot do everything on its own. To help its partners along, IBM is offering $4 billion (£2.65bn) in financing to its business partners.

Financing

“We are willing to support you, we are willing to finance you,” Di Leo said. “Thirty-six percent of our partners had a higher win rate using financing,” he added.

“IGF [IBM Global Financing] has made a commitment around making $4 billion available to partners,” said Mark Hennessy, general manager of global business partners at IBM. “Then there is the new mobile technology that takes our rapid finance application and moves it to mobile.”

IBM’s new Rapid Financing mobile app enables IBM partners to include financing options in their client deals quickly and easily while on the road, said Tom Higgins, director of global financing at IBM.

The app is available on Android, iOS, BlackBerry and Windows Phone platform and is rolling out in more than 30 countries in 2013.

“We made all this money available and we also want to make it more accessible with an app that’s easy to use,” Higgins told eWEEK. “The response we’ve gotten from partners is this is not just another tool, but one that gets to the heart of how they do business.”

IBM partners can use the mobile app to get financing for their clients and once the application for financing has been submitted they can get an approval within minutes, Higgins said.

Competitive displacements

A couple of shortcuts to winning business and gaining approval for financing is to “lead with a monthly payment; you do more business and get bigger deals”, he said.

Higgins also said deals that involve competitive displacements – where a partner is displacing an IBM competitor’s technology with IBM’s – tend to get approved for financing quicker than other deals.

IBM announced the availability of $4 billion in financing in November 2012. However, 18 months prior to that, Big Blue made $1 billion in financing available to partners.

“We expected the burn rate to be 18 to 24 months for that, but it turned out that it was done in only nine months,” said Ed Abrams, vice president of midmarket business at IBM. “Given how quickly we went through that we knew we needed to make more financing available.”

Meanwhile, Steve Mills, senior vice president and group executive for Software & Systems at IBM, said it’s all about the Benjamins for him.

“Above all, I want to talk about money,” Mills said. “Whenever I’m involved with IBM’s business partners I move the conversation very quickly to money – not IBM’s money, the business partner’s money and how they can make more of it.”

Lead generation

Mills said IBM is intensely working on its lead generation processes. “We think we can do a better job of working with you,” Mill said to an audience of IBM business partners. “We want to jointly work on more lead generation.”

Moreover, Mills said IBM is making incremental payouts for competitive displacements. He said there is a three percent to 20 percent incremental payout opportunity for approved clients when displacing technology from Microsoft, Oracle, Sybase and HP, in particular. “Displace the competition and earn more,” he said.

“Business partners are a key route to market for IBM and IBM is passing you more leads,” Mills added.

For his part, Jon Iwata, senior vice president of marketing and communications at IBM, spoke about the new challenges and opportunities for IBM.

Iwata said with all the instrumentation of the environment and the pervasiveness of mobile broadband, we have only seen just the beginning of big data. “The instrumentation of the planet is pervasive, with cameras and sensors everywhere,” he said. “Mobile broadband is expected to reach 85 percent of the world’s population in a few years.”

That means more and more big data challenges, and much of that data will be unstructured, which presents different opportunities for IBM and others.

CMOs targeted

Iwata also delved into the importance of targeting the CMO as a new source of business. He said while the average tenure of a CMO in the US is about 20 months, $1.5 trillion was spent on marketing and communications in 2011.

Marketing budgets are expected to grow about eight percent in the next 12 months, which is two to three times that of IT budgets, he said. In addition, $148 billion in IT-related spend was owned or influenced by CMOs in 2012, Iwata said. Thus the CMO is a ripe opportunity for IBM and its thousands of business partners.

“We’re teaming with an ecosystem of 132,000 partners to deliver value solutions around big data, analytics, cloud, social and mobile,” Hennessy said.

In 2012, 13,000 new business partners joined the IBM ecosystem, he said. “Half of IBM’s Smarter Planet references came from partners,” he said.

On the hardware side, IBM’s Systems and Technology Group, (STG) said it is increasing the number of personnel in the field available to partners by 50 percent. And in the cloud space, IBM has seen 80 percent growth in its cloud business over the last year, Hennessy said.

“Another element of the cloud is that many of our partners are transitioning in the Managed Service Provider (MSP) space,” he said. Indeed, IBM has 4,000 MSP partners, Abrams said. “Two-thirds of our MSP partners have evolved from traditional reseller partners and one-third is net new business – new companies born as MSPs.”

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Originally published on eWeek.