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July 11, 2012
IBM (NYSE: IBM) certainly is keeping its pedal to the metal in the midmarket. Under its Solution Accelerator incentive, the vendor now will rebate channel partners for deals of at least $20,000 rather than the $50,000 bar set when the rebate program launched four months ago. The change is effective worldwide as of the end of June, confirmed an IBM spokesperson.
You may recall that Solutions Accelerator, which IBM introduced at its PartnerWorld Leadership Conference earlier this year, rewards channel partners for selling hardware and software together, particularly for commerce, social business, cloud computing and analytics solutions.
The program grants channel partners a 5 percent rebate for selling certain hardware and a 15 percent bonus for eligible software if packaged together. An allied offering, the Business Solutions Reward, provides an additional 10 percent rebate for the software component of the solution if aimed at target areas such as analytics, security and compliance and social business.
Partners whose customers finance the solution through IBM’s Global Financing arm get a 1 percent kickback in fees.
None of those rebates have changed with this latest program tweak. Still, IBM is betting that a lowering of the clip rate, which the vendor initiated based on partner input, will encourage more solution providers to bring eligible deals to the program.
Mark Hennessy, IBM general manager, IBM Global Business Partners and Midmarket, in a blog post to channel partners, described the program change this way: “In today’s business world, clients want solutions, not piece-parts. The Solution Accelerator Incentive, especially with its new enhancements, will help grow business while delivering solutions that combine hardware, software, and business-specific solutions that help address client needs now.”
Inasmuch as IBM has a new system to track hardware and software sales, it not only can determine which partners integrate the two but also it can identify software- or hardware-focused partners who might be a good fit to add the missing component.
In addition to the clip level changes to Solution Accelerator, IBM also made a couple of minor alterations to the program. For channel partners’ customers operating out of multiple locations, the vendor has dropped the requirement that all products be shipped only to one physical address. And, it has smoothed over the steps for partners to participate in the program.
IBM also confirmed that a program for distributors to gain authorization as solution builders and earn rewards for assembling server, storage and software into a specific offering, slated for a Q2 launch, has not yet begun. There’s no word as to when it might kick off.
IBM channel partners appear to be making good use of the Solutions Accelerator incentive and it will be interesting to see if the lowered bar for eligible deals prods midmarket sales upward. The vendor isn’t saying how much more it expects to pay out in rebates at the lowered level but if the move increases solution sales and partner collaboration, the point has been made.
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