IBM letting partners into SMB consulting

IBM Corp. is allowing its business partners to join it in selling front-end consulting services to small and mid-size businesses (SMBs) for the first time, the company announced Monday.

The company estimates that SMB business accounts for around 20 percent of its revenue.

Initially, IBM will provide three services under its Express brand for partners engaged in three-week to four-week consulting opportunities with SMBs, according to Murray Mitchell, partner and global leader, SMB business consulting services at IBM. The three services provide assessments of a customer's IT strategy, Web effectiveness and security vulnerabilities respectively and cost between US$55,000 and $65,000 each.

IBM made the announcement at its PartnerWorld conference taking place here and running through Wednesday.

Partners can start selling the three consulting services in the U.S. and Canada now, with IBM hoping to roll out the offerings to France, Germany, Italy, Japan and the U.K. later this year, Mitchell said in an interview.

"Why has IBM been so protective over services?" Richard Kearney, president and chief executive officer of Mainline Information Solutions Inc., a key IBM partner, asked. "We've been telling them, 'We can learn your brand, let us do the work.'" Mainline does most of its business with SMBs and is keen to start offering the new consulting services, he said in an interview here.

"We've seen the light," IBM's Mitchell said. He acknowledged that last year's 5 percent financial incentive for partners providing IBM with leads on SMB consulting opportunities hadn't taken off as the company hoped. There was the sense that once IBM had the sales lead, it left partners behind.

Going forward, partners selling the new consulting services will also be rewarded financially with 10 percent of the value of the overall service contract provided they're involved in the entire sales cycle from lead generation to service delivery, Mitchell said.

The sweet spot of the SMB market for IBM is companies employing between 500 and 2,000 staff with revenue of between $300 million and $600 million, according to Mitchell. When it comes to very small companies, "We may decide to let our business partners sell and deliver consulting services on their own and pay us a fee or a royalty," he said.

Looking ahead, the top issue with which Kearney would like IBM consulting help is in managing Intel-based IBM servers, he said. The Mainline CEO is also interested in services around high availability, server consolidation and e-mail as well as more niche areas including video surveillance.

Mitchell believes the three initial front-end consulting services will lead to other offerings probably around business intelligence, customer relationship management (CRM) and service-oriented architecture (SOA).

There's still a strong perception among SMBs that IBM is too large a company for them to do business with, according to Steve Solazzo, general manager, global SMB at IBM.

As well as the new consulting services, IBM Monday also formally unveiled its Tivoli Express family of systems management products aimed at SMBs, new workstations and servers, and added support options for customers.