Partners Cheer IBM CEO Rometty's Cloud Charge

Speaking at IBM's PartnerWorld Leadership Conference 2014 Tuesday in Las Vegas, IBM CEO Ginni Rometty told 1,500 global partners that they faced three tectonic shifts in IT, starting with data. "Think of data as the new natural resource for the world. It's unlimited, but you only get value if you refine it. Second is cloud, which is about process or IT delivered as a service. Third is engagement, and with the client it's social, mobile and security."

Rometty's message resonated with channel partners, who said that IBM, while late to the cloud, has amassed an impressive arsenal: homegrown technologies including "Jeopardy"-winning supercomputer Watson, the key mobile acquisition of Fiberlink, and the $2 billion buy of SoftLayer to help it take on Amazon, Google and Microsoft.

"It was a breath of fresh air to hear Ginni talk cloud. I've been an IBM partner for 29 years and I've never heard her so bullish on cloud and right on the money about steering IBM in the right direction. A lot is on the line for IBM, but also for my company and partners. There is a lot of reward for partners that can pivot to the cloud fast. We see our partnership with IBM as a big win-win," said Warren Tait, sales director for TrustSphere, a New York-based IBM cloud and big data partner.

Rometty said IBM has invested $24 billion in recent years in big data analytics -- $17 billion on 30 acquisitions and $7 billion on organic development, both of which helped grow big data analytics into a $16 billion business for IBM in 2013.

"You are a part of us. You are 20 percent of our revenue, 30 percent of our software, and over 50 percent of our systems business and represent almost half of our Smarter Planet references," Rometty told partners.

NEXT: Partners On Board With Transformation

For Hans Cromphout, delivery director with I.R.I.S. Professional Solutions, a Belgium-based IBM partner, Rometty's keynote was a call to action to transform the company's traditional software and hardware business. "We more than acknowledge what Ginni is saying. We are in the status of moving our business to cloud, which now is about 10 percent of our business. But that sense of urgency that Ginni talked about is not shared with our customers. There is opportunity there, but it's going to take time to get there."

While a hard pill to swallow for many IBM partners, they say they understand why IBM agreed to sell its x86 hardware business and double down on the cloud. For IBM, that transformation to a business model based on software and cloud services mirrors what partners are going through.

One public sector IBM partner based in the Washington, D.C., area, who asked not to be identified, said, "We get it. Partners need to react fast to keep pace with IBM. But IBM's march to the cloud isn't the rising tide that is going lift all boats. Partners need enablement to get to where IBM wants us. We need more than a series of tests and certifications. IBM has to stop talking about how much money they are throwing at the problem and start talking partner enablement."

Rometty acknowledged the transformation for IBM and its partners wouldn't be easy. "The x86 industry-based servers was a line of business based on thin margins. That is what that business is. How you improve your margins and get higher returns is through maintenance and services, and expanding your software portfolio and integrating a total solution. We see the same sort of factors with the cloud. While we are divesting from that business to Lenovo we will continue with things like PureSystems, Pure Applications, Pure Data, Data Power and Cast Iron cloud services," Rometty said.

"These ideas of data, cloud and engagement -- just one of these ideas would be a very interesting moment in our industry. But all three at once is a very different moment in time. And don't ever forget that. These will be the key drivers for IT over the next decade," Rometty said.

PUBLISHED FEB. 12, 2014