21 January 2008
by Paul Kunert
IBM is to radically overhaul the way it operates in the SME market and next month will introduce a reward scheme to pay resellers higher rebates for securing new accounts.The Pay For Contribution scheme will recognise resellers that invest in sales and pre-sales skills to win business in the sector.
Mike Bernard, UK marketing director for general business at IBM, its new term for SME, said growth in the sector was one to two percentage points higher than corporate enterprise and it needed more distinct routes to market to accelerate sales: "No [vendor] has a dominant market share so there is a significant opportunity for someone to lead in that space."
Customer accounts have been re-classified into small, mid-sized and the highest spenders and Big Blue has moved resources internally. Telesales will cover the low end, with partners seeking business in the middle tier and IBM client directors generating partner leads at the high end, some of which will be fulfilled directly. Mid-market customers have different buying cycles and prefer to work with solution providers added the vendor.
Under the plans, Bernard said it will increase general business marketing funds globally by 25 per cent to £50m and the UK would see a proportionate rise to drive demand generation activities.
He said partners would receive other financial incentives because IBM recognised they would need to invest in sales skills. IBM did not comment on Pay For Contribution.
Sources close to the vendor said some partners had "got used to being fed by IBM" but the rebate scheme would force resellers to "proactively work with IBM and the market rather than smash and grab deals on price at the eleventh hour."
The revamp has been well received by Big Blue’s larger partners, with Tom Kelly, managing director at Logicalis, stating "the changes play to the way we have been going to market. IBM will remunerate positive engagement and the channel’s investment will be reflected by its contributions.
John Joslin, managing director at Computacenter, praised the move, saying: "the spirit of IBM is to protect value in specific customers’ situations".
