By Paul Kunert
30 July 2008
IBM is to double the 200-strong PowerNet community after claiming that increases in rebates for mid-market partners winning new business has seen sales in the first half of 2008 already match last year.
As revealed earlier this year, IBM has launched a raft of incentives for resellers in the SME market, or the general business space as Big Blue refers to the sector, sitting alongside PowerNet which promotes solution selling.
Andrew Rigby, IBM UK general business channel director, told Microscope the PowerNet programme - launched two years ago to broker collaboration between distributors, resellers and ISVs - is being expanded
"Last year we did a thousand deals [through PowerNet] and this year we did 1,000 in the first six months of 2008," said Rigby.
"We are extending the reach of the programme," he added "and are trying to get more margin and incentives into the [mid market] channel to drive the right behaviour".
It all sounds very similar to Hewlett-Packard’s Pay For Results with a growing recognition inside IBM that incentives can shape partners’ strategies.
Rigby said the plan is for distributors to run PowerNet as IBM uses a third party agency to recruit "200 new solutions partners by the end of the year".
As is frequently the case with vendors, IBM was reluctant to detail the additional margin put on the table for ticking a number of boxes in its mid market strategy, one of which is for "winning in the white space".
But partners in the market reliably informed us that they can accrue an incremental 4% margin for sales in the general business space.
Some of the system requirements IBM put in place including tracking tools were historically aligned to the P-series which created back-end complexities that tripped up distribution partners that sold other platforms.
But Jared Cary, product channels director at Northamber, said the tools were now aligned across all platforms and it has just joined PowerNet.
"PowerNet is a powerful concept, it recognises that using solution providers can help open up new doors for IBM," he said, adding that the rises in MDF and rebates recognised partners’ investment needed to win new deals.
Low margins on direct commodity deals are a reality for all resellers said Nick King, chairman at Apex Computer International, which has been part of PowerNet from day one, but the scheme helped to beef up rebates retrospectively.
