IBM forms dedicated SMB services group

IBM is spending $300 million on initiatives to boost its partner-driven services revenue from SMB customers.

In an effort to drive more services business through partners, IBM's Global Services group is launching an array of initiatives aimed at better targeting SMB (small and medium-sized business) customers. Adding up its investment in the new programs, IBM estimates it's spending US$300 million on the initiatives.

One major new undertaking involves creating a dedicated team within IBM's Business Consulting Services (BCS, the group formed through its acquisition of PricewaterhouseCoopers) to team with regional system integrators in the U.S. and Europe to work specifically on SMB deals. Steve Laughlin, the BCS partner in charge of midmarket business in the Americas, was unsure how many staffers would be part of the dedicated group, but he said the commitment will be "substantial." Employees will come from both outside hires and internal redeployments.

Services are underrepresented in IBM's partner network: While 60 percent of the company's non-services business is driven by outside partners, only 5 percent of its services revenue comes through partners, executives said Monday in an opening keynote at IBM's PartnerWorld show.

It's time for that to change, said IBM Global Services (IGS) General Manager for SMB, Jim Corgel: "IGS has no more excuses," he proclaimed. He sees a sweet spot of underserved demand in the services space from companies with 100 to 1,000 employees -- businesses large enough to have complex processes but too small to spend heavily on pricey consulting work.

"We cannot cover the territory as well as customers would like us to cover it," Corgel said. "So we're asking the business partners, who do cover it, 'What do you need to grow your business?'"

In addition to forming the BCS team, IBM is packaging together services offerings for partners to pass on to their customers. One major focus area will be "IBM Express Managed Services," hosted services aimed at alleviating customers' thorniest administrative problems. E-mail management will be the first product, followed later in the year by business recovery services, targeted at businesses like regional ISPs (Internet service providers).

IGS is also partnering with resellers to offer preconfigured mySAP All-in-One packages, aimed at companies that would like to run SAP's midmarket ERP (enterprise resource planning) software but lack the IT resources to customize and deploy it themselves.

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