Channel Prospects Cloudy For IBM's Partnership With Box

The partnership IBM revealed on Wednesday with cloud storage upstart Box is a union of old guard and new that will spawn integrated cloud solutions and the development of innovative file-collaboration tools. But neither company, as yet, has any clear plan to involve its channel in selling those new products.

Representatives of both companies, however, told CRN that while the go-to-market strategy is still a work in progress, the IBM-Box partnership should eventually create opportunities for solution providers.

"We do see being able to apply that to our channel and ecosystem players that are important to both our companies. That’s something we're working through now, but something we'll communicate later," Inhi Suh, an IBM vice president, told CRN.

[Related: IBM Acquires Hybrid Cloud Services Provider Blue Box, Places Big Bet On OpenStack]

While Big Blue is now focusing on alignment of R&D, technical growth and direct sales strategy with Box, "you'll see, based on the work and pattern we start to develop, there will be a great opportunity" for the broader channel. The partnership will not only lead to more competitive products for resellers to bring to market, but also drive entirely new spend from enterprises, she said.

Chris Yeh, Box's senior vice president of product and platform, told CRN that channel strategy is an element of the relationship that still needs to be worked out.

"A large component of the relationship is that it has to make sense for IBM and Box from a direct sales point of view, and it has to make sense from a channel point of view, and they have to be worked on simultaneously," Yeh said. "Partners will eventually benefit from selling both products."

While the implications of the deal for the channel remain foggy, it delivers clear advantages to both companies.

Box gains enormous reach, especially into international markets, extending the Los Altos, Calif.-based surging cloud storage and collaboration business across the globe through 46 data centers.

"We'll be able to enable Box, and especially their international customer base, to store content in the IBM cloud as Box expands globally," Suh said.

And IBM gets access to an innovative technology that is popular in a diverse market the tech giant finds hard to crack -- employees collaborating on projects outside of the corporate environment.

"We get the opportunity to integrate in a very new way with Box's next-gen cloud and content collaboration platform," Suh said. "They're at some of the most exciting edges of the enterprise, and we get to integrate that into our enterprise applications," she said.

Combining IBM solutions in analytics, workflow management and governance with Box's content-sharing capabilities will create more robust products for specific verticals such as health care and financial management, she said.

The partnership also will give both companies a boost in nurturing their ecosystems of developers building mobile and custom applications, primarily through Box's custom APIs integrating with IBM's BlueMix Platform-as-a-Service.

Yeh told CRN it's a new experience for Box to be able to access a channel as broad as the one IBM presents. But Box also can help IBM go places the IT stalwart will find beneficial to its business.

Box has penetrated the Fortune 100, with enterprise customers like General Electric and pharmaceutical giant AstroZeneca extensively using the service. And moving into the small and midsize market, Box could be an entry point for IBM technologies for customers that imagine IBM tools as inaccessible, Yeh said.

IBM also has placed great emphasis of late in elegant design, Suh told CRN, and the user experience Box delivers was a compelling factor when considering the partnership. "IBM can bring, uniquely, a deeper understanding of how that interaction is enhanced and tied more directly to a core part of their business -- applications," Suh said.

The two companies are starting the process of integrating their existing products while jointly investing in a research and development road map. Currently, "the deepest conversations we are having are around content and content management in the enterprise," Yeh told CRN.

Development goals will likely seek to capitalize off what Yeh called "the democratization trend," which is placing sophisticated workflow products in the hands of more day-to-day employees.

"For us, the biggest challenge will be to pick and choose the places to work on first," Yeh said.

Stephen Monteros, vice president of business development and strategic initiatives at SIGMAnet, An IBM partner based in Ontario, Calif., told CRN the strategic value of the deal with Box will become even more apparent as time goes on.

"In our relationship with IBM, we've learned through the years, a lot of times they announce these things -- they don’t make sense on the surface, but you'll see, in six months you'll start to understand exactly what they were doing," he told CRN.

SIGMAnet customers would certainly be interested in the services in tools that come out of the relationship, Monteros said.

"We definitely can see a market for this because a lot of things are taken outside of the standard enterprise," he said. Workforces these days are mobile, and they don't want to be confined under a traditional corporate umbrella. "Box gives them more flexibility," Monteros told CRN.

As for the lack of channel involvement, Monteros isn't worried. IBM is channel-centric, he said, and eventually pulls its partners into all its endeavors. "I actually expect they've already got this planned. I bet they're fleshing this out right now," Monteros told CRN.

Yorgen Edholm, CEO of Palo Alto, Calif.-based Accellion, also a developer of mobile file-sharing tools, weighed in on the deal to CRN, saying it was of a nature he had been long predicting.

"The IBM partnership, it made sense. I was expecting them to do something, and IBM was a logical choice," Edholm said, adding while his company competes with Box, he could see a collaboration sometime in the future.

Last week, Box forged a partnership with Microsoft to make it easier to use the service to share Office documents. But the IBM deal, Edholm believes, is aimed to "upset Microsoft," and undermine its gains over the last year in cloud storage that have posed a challenge to the young business.

Edholm doesn't expect Box to ink any more deals like the one with IBM. He added that IBM's bet on Box could be, down the road, a benefit to the channel.

"If IBM and Box are actually successful to give Microsoft a run for their money in the enterprise space, another viable platform that can compete, that would be a great opportunity for channel partners to add value," Edholm told CRN. But it's going to take at least a year to see if the partnership is yielding market share, he said.

PUBLISHED JUNE 25, 2015