XChange: IBM Wants To Help Solution Providers Transform Their Business

IBM, increasingly shifting its focus to offering diverse cloud services, can help solution providers transform their business, build new practices and realize greater profits, the tech giant's vice president of cloud service providers said Tuesday.

The IT market is at an historic inflection point and channel companies are finding themselves in the position where they must innovate to stay relevant, Judy Smolski told attendees of her keynote at 2015 XChange Solution Provider in Dallas.

"We have put a very specific investment in cloud service providers to really understand what your needs are, what are your clients asking of you," she told the audience.

[Related: Microsoft Exec: Cloud-Focused Solution Providers Outperforming Their Peers]

Smolski thanked IBM's current partners and encouraged the other solution providers and systems integrators attending her keynote to explore some aspect of Big Blue's portfolio they could use to acquire new clients and profitably grow their business.

Because, she said, if clients need services those solution providers don't offer, they will find them elsewhere.

Three big trends -- data, cloud and engagement -- are transforming the industry and "putting incredible pressure" on channel businesses to transform, she said.

Data gives companies a competitive advantage; engagement makes the consumer experience much easier, from retail to health care to banking; and the cloud has evolved well beyond its original primary benefit of reducing costs, she said.

"It's not just about saving money, it's about the new business models that it opens up," Smolski said of what she called "cloud 2.0."

IBM is investing heavily in developing solutions to address each of those trends that solution providers can't afford to ignore, Smolski said.

Business leaders are focused on rapid innovation, which is why new applications are typically cloud-based services. They're looking to the channel to help them figure out what workloads they should be moving to the cloud.

That's why IBM is leveraging its acquisition of SoftLayer to shift from its historical emphasis on hardware infrastructure. Half of the company's revenue now comes from service-based products, Smolski told CRN after her keynote.

IBM hosts more than 100 SaaS solutions, from the Watson analytics platform, to Verse collaboration tools to the Kenexa Talent Suite, she told the audience. Most of IBM's software offerings were born in a traditional, on-premise form and then migrated to the cloud "to make it more consumable for more people."

IBM is also investing billions of dollars to expand the number of data centers it operates around the world, recognizing that clients want to be able to scale their businesses globally.

"As we think of new practices, what are the hot trends in the industry?" Smolski asked. "Everyone is worried about security."

A security practice is one way a solution provider can differentiate itself and IBM can help a partner develop those skills and adopt the right solutions, from identity management to data protection.

Mobility is another potential differentiator closely related to security. Half of the nation's employers will require a BYOD policy by 2017, "so it’s a huge market opportunity," Smolski told the audience.

Brian Quinn is, in many ways, the type of solution provider that Smolski was addressing in her keynote.

Quinn, owner of Wholesale Computer Exchange in Monroe, Conn., has been an IBM hardware partner for decades, first selling IBM PCs in 1981. Big Blue is in his blood -- his father was an IBM executive for years.

But Quinn doesn't sell any IBM services, and he feels "it's been very confusing what their direction in the market is as it relates to their partner community," Quinn told CRN.

"They're becoming hardware-agnostic," he said.

Quinn also frankly told CRN he doesn't know where to start as far as adopting a services model for his business. Even with his long history with IBM, he's not sure how to decide if a cloud vendor's culture is a good fit with his company.

"I need to break through that barrier," he told CRN, adding he's using XChange as a chance to talk to several potential vendors, including IBM, and gather as much information as possible about how to transform his business.

PUBLISHED MARCH 3, 2015