IBM Channel Executives are Frustrated with the Pace of Partners’ Transformation

PartnerWorld kicked off in late March and, for the first time, colocated with IBM’s Think [LINK: ] main event. The 1,000-plus partners who packed the MGM Grand Arena heard some great messaging around simplified programs, reduced contractual requirements, and a direct sales team who was finally getting channel religion delivered through its paychecks.

It was a tale of two events, however. In the hallways and closed sessions afterward, IBM channel executives expressed frustration that partners' transformation is not keeping pace with their organization's business transformation. IBM has stacked its channel team with great talent, from both internal and external hires, to build the partner program of the future. But the execution is lacking, even though the strategy seems buttoned-up.

Here are my thoughts why:

  1. Bouncing around an echo chamber. The executives talked about traveling the world doing listening tours and pulling together partner advisory councils. The problem is they are engaging their large, long-term loyal partners who are lobbying for self-serving tweaks to the traditional partner program.
  2. Sailing into demographic headwinds. I walked around the arena during the keynotes doing a very unscientific poll — estimating the age of the 1,000-plus audience. My final tally was fewer than 5% Millennials, 20% Gen X, and the rest Baby Boomers. When I go to cloud IaaS, PaaS, and SaaS events, the numbers are inversed.
  3. Catching up to table stakes. While some of the announcements around opening up sandboxes, engaging developers with open APIs, incenting direct sales teams, reducing complexity, and minimizing contractual battles sound revolutionary, most other vendors have been doing so for years.
  4. Playing in the Field of Dreams. Many vendors now realize that success in SMB and shadow channel recruitment lies in pursuing partners in their own communities. I spoke with several IBM execs who still think they are one program, product, price, packaging, or promo away from success. Until this law of attraction changes, IBM will never meet its ideal partners of the future.
  5. Realizing the numbers don’t (and won’t) add up. In addition to the demographic challenges above, IBM has roughly 20,000 active partners of 120,000 total. This is a similar (Pareto) percentage to other large programs’, but the feeling at senior levels is that only about 7,000 partners are truly making the transformation necessary to represent IBM across its impressive emerging technologies portfolio. As hundreds of thousands of shadow channels rush into the technology solutions space, this is a serious miss.
  6. Engaging in traditional thinking for untraditional partners. Shadow channels such as XaaS ecosystem partners, industry-based service companies (accountants, digital agencies, etc.), ISVs, born-in-the-cloud, and even startups don't participate in programs in the same way. They won't take the time to sign on to a bronze level, negotiate a contract, get onboarded, and certified over six months. They definitely won't have the patience for traditional incentives and co-selling or co-marketing motions.
  7. Not eating their own cooking. IBM owns the technology that could be the biggest game-changer of any channel program on the planet — Watson. The channels of the future want a frictionless, real-time, and self-service program that is predictive and prescriptive and provides timely, automated, and context-specific air cover to win deals. This eliminates the cost of human-based coverage and the workflow gates that frustrate traditional partners —and are a non-starter for potential partners.
  8. Being stuck in vertical mode while the world moves to vectors. IBM sampled some of the 7,000 partners that “get it” onstage at PartnerWorld. From disease-fighting farming drones to visualization technology that saves millions of dollars in lost/stolen milk crates, millions of potential opportunities exist across subindustries, lines of business, sectors, segments, geographies, and technology stacks. The problem is that even if the IBM channel builds its own partner programs, permutations won’t fully capture the new buyer and breadth of opportunity.

After spending 17 years of my early channel career at IBM and Lenovo, I can empathize with many challenges above. Breaking into new communities and understanding what shadow channels read, where they go, and who influences them is critical to building a channel of the future.

The strategy is simple — the execution is painfully hard. IBM will need to realign its talented partner and alliances team to build a parallel channel. The traditional channel will need continual nurturing, but the focus needs to be on those that will drive the IBM emerging technologies portfolio into millions of new customer discussions.

The original blog is here. The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends