The messaged delivered by IBM at its annual PartnerWorld Leadership Conference is simple: solution providers must transform their businesses to incorporate software and services, or risk disintermediation.
IBM knows a thing or two about business transformation. Over its 103 year history, IBM has undergone several transformations and changes in its products and business models. Currently, it’s spending billions of dollars to build out capacity in cloud computing, mobility, security and cognitive computing. At the same time, IBM is divesting commodity assets, such as its x86 server unit.
No bones about it, IBM sees its future in cloud computing, software-defined services and advanced business applications based on its Watson artificial intelligence technology. By the end of 2014, IBM will have 40 new data centers around the world for providing infrastructure services through its SoftLayer unit.
Compounding IBM’s challenge is the state of the channel community regarding cloud. Most solution providers earn less than 10 percent of their revenue from the sale of cloud services and resources. And while many solution providers continue to invest in their cloud skills and capacity, transformation is happening at a slow pace.
To that, IBM channel chief Marc Dupaquier says, “If you don’t come here, you’re going to be left behind.”
To facilitate partner transformation, IBM has created a number of new resources, including the new ThinkAcadamy of training materials and resources, consolidated reference library in the IBM partner portal and new marketing materials. Additionally, IBM launched the new PartnerWorld Satisfaction Score tool, an instrument for measuring how partners perceive value delivered by solution providers. And IBM created IBM Enhanced, a certification that demonstrates the competency of partners in managed services.
IBM is seeing a number of its 140,000 business partners transform their businesses from conventional hardware sales to hybrid models that incorporate cloud, managed and professional services. Dupaquier and other IBM channel executives say solution providers who relegate themselves to a hardware-only business are at risk of disruption.
“What is the practice and what are they selling? If you only sell boxes, you’re already in trouble,” Dupaquier tells Channelnomics.
IBM knows it has a challenge in not only transforming its business, but also influencing it business partners to invest in new capacities, business models and revenue opportunities. While IBM paints an optimistic future of the lucrative future in cloud, mobile and business analytics, solution providers are typically risk averse and do not have the tolerance to implement protracted change.
“The transformation has already started. The challenge is to accelerate to get partners to where IBM is going,” said Mike Gerentine, vice president of IBM Global Business Partners and Midmarket Marketing.
While IBM is putting resources in place to aid transformation and accelerate change, the pace is still slow. Only a tiny fraction of IBM partners have embarked on the transformation journey, and IBM has only touched dozens to offer support and assistance. IBM plans on scaling its training and human resources by engaging its distribution partners. Even then, transformation into the thousands of partners in the IBM network could take years.
This article originally appears on Channelnomics.com.