IBM Pledges to Share the Wealth with Partners

SAN MATEO (01/28/2000) - THE NORMALLY tough job of placating partners has grown tougher of late, especially for the industry's giants.

Several top IBM Corp. executives, including the chairman, last week at the company's Partner World conference forcefully pounded home the message that IBM needs to work hand in glove with its business partners and resellers if it is going to capitalize on the rich opportunities that exist in the e-business world.

Despite the growing industry-wide trends of systems companies selling directly to users, and the likes of IBM and other top-tier players such as Compaq and Sun jumping with both feet into the services market, IBM believes its indirect channels will continue to play a strategically important role.

"IBM absolutely needs its partners to meet its business goals [and offers] users the incredibly broad range of solutions [they need] to launch or improve e-businesses," said IBM chairman Lou Gerstner in a videotaped speech at last week's show.

Highlighted by executives last week was the hockey stick-shaped growth curve expected in e-business products and services over the next three years.

Using analysts' projections, IBM officials predicted that the market would be worth some $1.7 trillion in 2003, with professional services claiming 56 percent of that figure, hardware taking 30 percent, and software the remaining 14 percent.

"This is the first year where we don't have to think, 'Will e-business dwarf traditional business?' There has never been a better time to be in this industry," Gerstner said.

Gerstner and other executives admitted they have missed opportunities in the small and midsize accounts, and promised to redouble IBM's efforts there with the help of its business partners.

Backing up that commitment, IBM announced the formation of a new unit dedicated to promoting e-business solutions in concert with its network of resellers.

The Global Small Business unit will offer incentives to business partners in order to promote IBM's new Small Business WebConnections service. As part of the program, partners are supposed to identify and refer small businesses that are ready to put up an e-business for the first time or to significantly expand an existing one.

IBM also announced the creation of the Global Midmarket Business unit, which will focus on delivering e-business solutions to midsize accounts, or those accounts with between 100 and 1,000 employees.

Offerings from this unit will include those built around the AS/400 and RS/6000 lines, along with a Web-based self-service solution and several new Alliances including one with NetVendor, a provider of business-to-business solutions for midmarket suppliers.

IBM, in Armonk, N.Y., can be reached at www.ibm.com.

Blue-sky partnerships

IBM is bullish on own and partners' outlooks, citing positive trends.

* Expects to double Web-based sales in 2000, reaching $22 billion mark* Company plans additional $200 million venture funding for Internet-based businesses.

* Plans to bolster channels programs aimed at small and midsize businesses

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