IBM's Rometty To Partners: Change Is Hard, Not Pretty

IBM CEO Ginni Rometty expressed little regret reflecting on massive challenges that faced IBM over the past year, telling attendees at the PartnerWorld Leadership Conference during her keynote that the table is now set for success in the year ahead.

"Transformations are only clear when they are retold in revisionist history, never when you are in the middle of them," Rometty said. "I thank you for being part of this transformation."

Her message was well received by many partners, which like IBM, are in the midst of their own transformations.

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"These are changes that needed to be made," said Chris Ticknor, director of marketing at Keyinfo, an IBM partner based in Agoura Hills, Calif. "But now IBM is past the rough patches. They have transformed, reorganized themselves as a company and have a new channel structure," he said. He said he's hopeful that 2015 will bring Keyinfo fast growth with a new IBM.

Rometty acknowledged that uphill march pointing out that it has been an unprecedented year of change for the Armonk, N.Y.-based vendor. She also outlined reasons solution providers should expect growth in the year ahead and promised partners calmer seas, outlining what she sees as partners' biggest opportunities.

"We made tremendous progress transforming the business," Rometty said in her keynote address to partners. "We completely transformed the hardware business and moved to a higher value solutions."

Rometty outlined divestitures in the x86 business, outsourcing of semiconductor business and several billion-dollar investments over the past year in Watson, microelectronics research and its Power systems. Also in the plus column were "landmark" deals, including one with Apple on mobility, Twitter on analytics and SAP services running on SoftLayer.

"It was refreshing to hear [Rometty] talk about offering fresh ideas around emerging IT solutions. For a new partner that is interested in growing with IBM in mobile solutions, it gives me confidence that I'm working with the right company," said Teya Tuccio-Flick, vice president of marketing, for Whereoware, a Washington, D.C.-based digital agency that has been doing business with IBM just for the past year.

Rometty said that the channel represents about 20 percent of IBM's overall revenue. She said that IBM partners that focused business around strategic initiatives of cloud, analytics, mobile, social and security were seeing 14 percent higher growth in their business. She added, that while IBM's services may not be entirely unique, they were clearly differentiated from the competition.

"How does IBM differentiate its portfolio in cloud, mobile, and social?" Rometty asked. She said IBM was a leader in a highly competitive landscape, adding "make no mistake, we are not a me-too option. We serve clients and we know them well."

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Rometty said IBM's solutions from analytics, cloud, security and mobile clearly differentiated themselves from its competitors. What does IBM bring to the party that is different from what is out there?

She said that IBM’s cognitive approach to parsing big data -- a la Watson -- gave partners a competitive advantage in the marketplace. "Yes, big data is a natural resource. But it's not worth anything if you don't refine it," Rometty said.

She added that IBM's SoftLayer offers a more agile and secure approach to putting businesses online, be it on a hybrid or public network. "We are remaking enterprise IT for the era of the cloud," she said. "If you are a client, it's really about agility and speed."

She also said partners brought a level of IT subject matter expertise to solving problems that benefited from the depth of IBM's product portfolio. "You cannot be a junior[-level] provider in these area. You have to keep building domain or industry expertise," she said.

Building on specific vertical business expertise, she said IBM will have a new focus around healthcare in 2015. "You saw us launch commerce, security, analytics and you are going to see us launch health care -- but as a design point -- each of these new ventures rely on IBM software, analytics, domain skills, cloud and on an open platform that for partners to exploit," she said.

"You are going to see IBM bring more and more these differentiators from hybrid, security, and new designs to enable partners," she said.

Other changes Rometty alluded to were the One Channel Team structural change that aligned channel teams for each IBM business under a unifying umbrella.

"This idea of a single management system for you -- with converged co-marketing, enablement and incentives -- is something you asked for. You talked about simplification, and we are taking more steps to make things even faster for partners and simpler," she said.

The restructuring of IBM's business groups and corresponding channel organization received overwhelming support from partners CRN spoke with at the conference.

"IBM's One Channel Team cuts through a lot of bureaucracy," Ticknor said. "It goes a long way to removing the red tape and streamlines my ability to talk with right people about solutions and not products."

While acknowledging the challenging year Rometty warned partners that more change is on the way. "We are in the midst of a journey. Our strategy is correct, and there is absolute progress in your results ... But change is not going to stop at IBM."

PUBLISHED FEB. 11, 2015