Last week I went to IBM’s internal Cloud sales event in Madrid and heard first hand IBM’s plans for their cloud and their channel. Those who follow IBM won’t have missed the fact that all’s been a bit rotten in Armonk over the last few years as the company has reported 20 successive quarters of declining revenues. During this time IBM has been reinventing itself as a cloud business, much like Adobe did a few years ago with Creative Cloud. Reinvention(aka Digital Transformation) is painful – Adobe received a mass of criticism and lost customers when they discontinued desktop software and similarly many have been sniggering as IBM’s turmoil has been evident. But Adobe’s stock price has now tripled and they have a sustainable subscription model which is a much more resilient business.
And IBM finally announced a return to growth.
With IBM’s return to growth comes what what some are hailing as the completion of their digital transformation. You can pretty much buy all of IBM’s portfolio on their cloud now but they have also substantially changed HOW you buy it. The vast majority of IBM accounts must now buy through the channel where previously it was more or less optional. One of the reasons is because as deals move to subscriptions, it is no longer cost effective to have F2F sales people everywhere and IBM has been whittling away at their own.
Transformation is painful – on a much smaller scale (but no less painful) I consider our own. We set up Tectonic in 2011 just as IBM’s revenue’s peaked aiming to resell software and our services using a traditional partner model and since then it hasn’t been easy. But now we are an IBM Cloud reseller doing all our dev on the cloud (in inexpensive countries). Dev projects are often MVPs rather than big cumbersome multi-year missions which means we can be agile in recruitment and in training. All of this is sellable because customers are OK with the cloud and off shore development – in fact they insist on it.
IBM’s strengths in enterprise computing, application development, Watson, IoT, Analytics and Security are all offerings that are future-facing. IBM is also the only company capable of moving almost ALL a clients workload to the Cloud, a case in point involves a large retail bank currently moving 95% of its work to the IBM Cloud, I’m not aware of any other Cloud vendor that could achieve this level of transformation. These services are free to play with (you don’t even need a credit card) so there is no barrier to entry. IBM has made the technical transformation and business transformation. All that remains is for it to tell people about all of this – i.e. market it, something that has never been IBM’s strength.
From what I heard last week their new CMO Michelle Peluso has been given a whopping budget to do just this. Let’s see what 2018 brings…maybe it’s a good time to be an IBM Partner again or to become one.