IBM Reworks System x Incentives, Deal Registration
IBM (NYSE: IBM) is putting more money on the table for midmarket partners, quietly reworking portions of its System x channel program by upping financial incentives as much as 50 percent, opening an umbrella deal registration portal and simplifying pathways to rewards.
This is the second time this summer that IBM has tweaked midmarket channel incentives, previously lowering the eligibility bar for the Solutions Accelerator incentive in early July. While this time the short-term goal is to put more heft behind System x 2H 2012 sales, IBM believes the bigger prize is winning the post position as channel partners’ midmarket go-to option. Here are the details on how the vendor figures to get there:
Even though IBM stayed publicly mum on the System x program modifications, the vendor put a good deal of clout into communicating the message to partners. Last week, in a letter to channel partners and distributors, IBM outlined the System x program changes, following an earlier channelwide conference call hosted by Bill Donohue, IBM North America vice president, Business Partner and Midmarket Sales, and Victor Morales, IBM North America vice president, System x Sales.
Juan Carlos Mazariegos, director, IBM North America, Systems and Technology Group Run Rate Sales, who authored the letter, confirmed the program improvements in an interview. While he held confidential specifics of the program revisions, he outlined the basic tenets:
- IBM has upped financial incentives for System x channel partners from 30 percent to 50 percent over what the vendor previously offered, depending on the solution.
- Incentives apply to 80 percent of the System x marketplace engaged by partners, which, in effect, means all midmarket sales and perhaps a smattering of smaller business and enterprise.
“We recognize this is a challenging market owing to a number of factors,” Mazariegos said. “We want to partner more closely with VARs and our entire ecosystem of partners while addressing the question of what is the right level of incentives to help partners increase solution selling.”
“We recognize that we have a joint opportunity with the channel. We want to invest to help our partners become as autonomous, profitable and efficient as possible,” he said, calling the incentives a “compelling margin opportunity.”
Not confining its System x channel alterations only to financial incentives, IBM also upgraded its online deal registration portal to include System x, storage, Power and PureSystems opportunities, effective at the end of July, as part of a larger effort to simplify doing business with IBM, Mazariegos said.
“We consolidated deal registration into one portal. It’s a step, not an end, in the right direction, one of many program changes to improve the partner experience,” he said. “We need to be simpler to do business with and faster to market.”
Along those lines, IBM reduced through consolidation the number of programs for partners to apply for and gain benefits. Mazariegos didn’t offer any details but did say that the programs remaining in the simplified construct are “equal to or better” than in the previous version. Partners will still apply for benefits through PartnerWorld, he said.
“It’s vital for partners to see we are committed to investing in the channel, especially in challenging times,” he said.