IBM Keynote at XChange 2013

Editor's Notes

• #2: Thank you Bob! It is great to be here at XChange, and share our perspective of the channel and how we are driving higher value solutions together with our Business Partners. First – I’d like to share a story with you. This comes from a recent workshop we held in Chicago with our IBM Partner Reps where we were educating them on some of the latest solutions and new partner planning models. We had an executive from one of our business firms come in and spend some time with our Reps and share how their firm has evolved to higher value solutions over time. He talked about their Clients – and the changes their client base was facing. He highlighted how many of them wanted to consume technology differently and how that has evolved from traditional IT consumption. And – he talked about how this required a transformation within their organization to create new skills, identify new talent – and develop new capabilities . He underscored that the industry is always moving – and it is critical to be relevant to your clients as their business evolves. He is just one example of what we are seeing and hearing – and many of you in this room are also experiencing. My point in telling you this is that the channel has an incredible opportunity to INNOVATE and LEAD our customers and the industry as we expand into new markets, help build relationships across the Line of Business teams, and develop new skills in the market place. It is an exciting time to be in this industry – faced with many new challenges to solve yet great opportunities to explore together.
• #3: We continue to actively listen to our clients and Business Partners. Listening to clients has been front and center of IBM’s strategy and our roadmap for growth. We have also been actively listening to YOU – and have based our Business Partner strategy upon input from you, our partners. We are listening, and taking action including many of the changes we have made to date in deal registration, our incentives, our sales plans, and margin improvements. We have gained new insights and feedback from our Advisory councils and the one-on-one sessions at PartnerWorld Leadership Conference. We are using social business and collaboration tools like the IBM Idea Lab we conducted last Fall to gather input from clients and partners on how we can continue to enhance our IBM Client Experience. And, we recently conducted an employee wide Jam to gather field level input. From a partner perspective -- the Idea Lab complemented and extended the feedback we received through our Business Partner Advisory Councils and Business Partner Diagnostic Survey. Simply put -- what we heard from you: Our Business partners are looking for ease of doing business with IBM and greater Field Engagement .
• #4: To that end, we are making steady progress working with our Business Partner community – and I want to share a few milestones with you. First -- we launched the channel neutral sales plan so that our IBM sales teams are motivated and empowered to engage with you. This is a key step in driving the greater field engagement our partners have asked for. Over the last several quarters, we have significantly expanded our Minimum Margin program, increasing the list of covered products and services to ensure your margins will be protected and the highest in the marketplace. We significantly improved IBM’s Deal Registration through special bid turnaround time closer to 24 hours and with greater field input on key deals. From a client experience view – we brought together our IBM Business Partners together with our Clients and IBM sellers at our EDGE event in June to continue to enhance field engagement, partner and client education, and the overall client experience. Our Enterprise Systems2013 event is just right around the corner on October 21-25 – bringing our Business Partners together with our Clients focused on next generation applications and solutions. From a partner recruitment and route expansion effort -- we enrolled 437 Managed Service Providers (MSPs) to PartnerWorld, and recruited 150+ new MSPs. And, we expanded our Distribution strategy with Tech Data and Ingram in January 2013 for IBM Power and Enterprise Storage. From a marketing perspective – our Mid-Market co-marketing program has generated more than 1000 client wins year to date. And, we continued to make progress in the world of social media with our IBM PartnerWorld social media communities reaching more than 12,000 IBM Business Partner participants on LinkedIn, Facebook and Twitter. Most importantly -- the single biggest area of focus and improvement is around Field Engagement – which I will share more in a few minutes. Your continued feedback and open dialogue enables us to transform and simplify our business together .
• #5: A client-centric approach The transformation in the market place has been driven by our Clients -- who are looking to grow and innovate, and you are leading this transformation with them. Many of you have or plan to evolve your firms to become MSPs or developing new capabilities and practices to better respond to your clients and transform your businesses. You will hear from one of our Business Partners in just a moment. This transformation is also driven by new innovation, accelerated growth and higher value solutions like Cloud, Analytics and Mobility. And, we are seeing New Buyers emerging across multiple Lines of Business – opening up new opportunities to serve new and different types of Clients. All of this requires new expertise, skills, and leadership in these higher value solutions and industries. Channel Growth And – our Partner transformation is driven by the market place. We are seeing huge shifts and focus on driving greater revenue through channel. We have certainly seen this in our Hardware business – but we also are seeing accelerated growth in Software and Services. This means Partners play a huge role and you are key drivers in this transformation.
• #6: Technology has moved front and center of this transformation and change – and it has progressively risen to the top of the CEO’s radar. Technology now ranks as the #1 factor impacting organizations, and plays a critical role in organizations achieving business objectives. Let me share some data points on the explosive growth: W ith over 1B smart phones and 1.2 billion mobile employees by 2014, organizations are leveraging mobile to improve reach of services to clients We estimate the North America Mobility 2014 market opportunity will be $44B with a growth rate of 17% with Mid-market growing the fastest. In 2013, Sales of smart mobile devices – smartphones, tablets, and e-readers – will grow by 20%, generating 20% of all IT industry sales and 57% of all IT market growth. We also see over 20B machine centric devices deployed, enabling more responsive business operations and business models. All of these technologies are generating tremendous data with 2.7 zetabytes of digital content last year (2012) – an increase of 50% in one year. And only about 10 percent of this data is structured – that part of data that’s easy to mine – leading to a huge opportunity. Also, Security is a critical component, and IT Security Products market will reach $35B in 2014, with a growth rate of 8% We estimate that the North America Business Analytics market which includes Hardware, Software and Services to be $91B in 2014 – and growing at 7 percent. Driven by Big Data, digital marketing and mobile applications. IBM predicts the NA 2014 cloud computing* market opportunity to be $39B , growing at 24% Cloud speeds service delivery, and 90% of CIOs view cloud as critical to their infrastructure plans What we are learning from both CEOs and CIOs – as well as other C-Suite Executives like CMOs -- is that technology is moving from a back office function and enabler of cost reduction -- to the front office and a new driver of growth and value .
• #7: And speaking of new technologies and Cloud - IBM recently acquired SoftLayer to expand our Cloud offerings and portfolio. SoftLayer is the leading Infrastructure as a Service Provider. They started in 2005 with ten original founders. Their expertise came out of the more traditional managed hosting world. The overarching concept of SoftLayer was that they saw growth of managed hosting and thought to create a platform that you can buy by the drink, on demand, and can launch literally in minutes. And that was the overarching premise of what started SoftLayer. They’re headquartered in Dallas, Texas. Roughly 700 employees and 13 data centers that span the globe throughout North America, Europe and Asia. SoftLayer defines “cloud” as on-demand compute with consumptive billing. On-demand compute is everything inside the data center. It's the network equipment, the firewalls, the load balancers, the SAN storage, the servers, everything that goes inside of it. And of course consumptive billing is either by the hour or by the month. At the heart of SoftLayer is the Infrastructure Management System or IMS which represents more than 3 Million lines of code that automates the ordering, billing, provisioning, and ongoing management of SoftLayer infrastructure as service. This software allows customers to buy instantly and receive the services on demand. SoftLayer has over 21,000 customers across the globe. Started off in a very Internet-centric customer base and moved to the enterprise in the last 12 to 24 months. We are very excited about this acquisition and how this enhances our IBM cloud portfolio for our clients and business partners.
• #8: The acquisition of SoftLayer will provide our IBM Business Partners greater choice and more control. It will open new markets and access to more buyers as they now can deliver solutions across an ever growing set of deployment options including bare-metal dedicated servers, virtualized shared servers, managed private and public cloud, storage, networking, managed services, and much more. SmartCloud Services Business Partners can build new applications on SoftLayer-based technology while our IBM SWG partners can deploy solutions on SoftLayer. Managed Service Providers (MSPs) and other aggregators will be able to project SoftLayer services through Application Programming Interfaces (APIs) to their respective customers allowing them to pick and choose the services they want for as long they need. In addition, MSPs will now have a choice of deploying and managing their own data center or hosting their data center within SoftLayer, giving them another cost effective choice for the management and growth of their business. And, independent software vendors (ISVs) will now have a platform and environment on which they can rapidly deploy their applications to exploit the cloud and SaaS opportunity. IBM will be working with our key ISV partners to make it easy for them to deploy their solutions inside of the SoftLayer environment giving them a new market opportunity to capture and our MSPs and resellers a new means of delivering capability and growing their revenue streams.
• #9: Now – I would like to introduce you to one of IBM’s Business Partners. Jim Torney is the President of Essextec who will share his transformation story, the new capabilities and services they have added to respond to Client needs, and where they are headed in the future. Jim – thank you for joining us today! ___________________________________ NOTE: Thank Jim when he exits stage and reinforce any points Jim made.
• #10: We have been on this journey for some time with a focus on expanding partner opportunities, field engagement and improving our partner experience . We will continue to optimize our business partner model and delivery based upon ongoing feedback from you through Advisory Councils, Business Partner Surveys, and our ongoing one-on-one interaction. Partner Opportunities : We have launched new demand generation programs focused on propensity to buy clients and prospects at the City level. We are making progress on improving our lead passing and generating new leads with the new Lead Engine programs. And, we are ramping up the partner enablement to support the strategic growth solutions including Smarter Analytics, MobileFirst, and Cloud. I already mentioned SoftLayer which will allow our IBM Business Partners to deliver solutions across an ever growing set of deployment options -- providing an innovative infrastructure as a service (IaaS) platform designed for new, web centric applications in the areas of mobile, social, gaming and analytics. Field Engagement: We are investing in greater field engagement and co-selling at the Local level. And, w e’ve significantly increased our channel dedicated sales and technical resources in our Hardware business by more than 50%. Partner Experience We continued to simplify our partner programs and associated processes including order management, deal registration, pricing and program improvements. We will continue to simplify our processes, allowing you to spend less time on administrative tasks and more time delivering value to clients that drives revenue and profit for you. In fact, in our Demo room you can take a peek at our Business Partner Dashboard – to simplify our Partner experience and provide you with timely information. Our objective is to make it easier to do business with IBM – and continue to help IBM Business Partners make money with IBM and deliver new innovation to your clients.
• #11: IBM will continue to bring new innovation, skills, and new capabilities to our Clients – across Industries, Enterprise and Mid-market segments. To serve these clients more effectively, we will go to market together with our IBM Business Partners. Our Mid-Market Segment – clients that typically have less than 1,000 employees – will continue to remain a Partner or Channel Led model. We will continue to invest in co-marketing dollars, Partnerworld Programs, and Distributor support to help our Business Partners identify and drive Mid-market opportunities. For our Enterprise Segments -- our Systems & Technology Business is focused on a co-selling model teaming with our Business Partners. This means that our IBM STG Client-facing Sellers have the mission (along with the incentive plan) to develop client relationships, identify new opportunities, and pass leads to IBM Business Partners to progress and close deals. Our STG BSS’s will work installed, competitive and white space accounts. They will be focused on driving client relationships and exploring new solutions resulting in more opportunities for our partners to own and transact. Together we will bring the very best skills and experience in the industry to our clients and significantly improve our reach to more customers. Our Industry Segment which is focused on larger client accounts will continue to be channel neutral where IBM Business Partners will continue to be engaged with our Client teams on expanding account opportunities. This multi-tiered coverage approach enhances our overall Client experience with the expertise and skills of our IBM Business Partners working with IBMers at the local territory level.
• #12: As IBM continues to shift to higher value capabilities , we are focused on creating local opportunities for our Business Partners to capture new markets, deliver the right skills and leverage advanced technologies to help bring innovative solutions to market for client transformation. You play a vital role in these client engagements , such as building new cloud solutions leveraging innovation from IBM and Softlayer to help small and medium businesses go-to-market faster. Or working with regional hospitals to streamline and automate their business processes using patient data and real-time analytics. Or helping clients with back up and disaster recovery systems to keep their business running smoothly. We continue to invest in Industry-leading technology with $6B in research and development, a strong patent portfolio , our smarter planet strategy, and targeted acquisitions IBM’s strategic roadmap is focused on client value, and by selling more of our portfolio and complementing it with our Business Partners’ offerings and services -- add revenue and margin to your business . To support this higher value, we will focus on field level engagement, increased technical support, enhanced incentives, and enable you on growth solutions such as cloud, business analytics, mobility. And, IBM offers world-class financing solutions to address yours and your clients growth objectives. Lastly – Field engagement is critical for our mutual success. We will continue to co-sell together, ensure we have the right sales and technical resources engaged and working with you and your clients. Now is the time to team with IBM!
• #13: As I started my talk at the beginning, this is all about our mutual clients – and helping them transform and innovate to be successful in the market place and in the communities they do business in. Special thanks to Jim for joining me today and sharing the EssexTec story – and how they are making their clients successful. We have a number of people here at the conference who are here to talk with you. Come see us in our IBM demo room and booth - we have representatives our Software team, Business Development Exec's from our MSP team, Partner and Midmarket client reps and executives from our Services Division, including SoftLayer . And thanks to all of you for your partnership, leadership, and driving new innovation across the industry!