I worked in Channels for a long time after leaving the field. The organization just got too big and too many levels. Pretty soon we took credit for every sale that passed through when in essence it was the field team on the ground that enabled most of this. Trying to get closer to the field team was sometimes difficult. What value did we bring to them? and where did they go? Constant re-orgs changed the field relationships. It wasn't for lack of trying. But the org chart always got in the way. IBM always paid too many people for each sale. Pretty soon the cost went over the top. A well run, efficiently staffed channels team is very needed. The Partners became very large organizations, they soon diversified to other vendors as well.
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Channels is nothing more than a volumes game. Get rid of the volume and channels dries up. So what’s happened over the last 5 years? 10 billion of Intel GONE to Lenovo. 4-5 billion of Power GONE to mismanagement. What volume is left? It’s time to just outsource channels and find a different way to monetize Power, storage, and small mainframes. IBM just doesn’t have the volumes
Channel and IBM ... you got me laughing. In AP there are almost none, a pity, what's there is just some resell. IBM missed channel for the last 20 years and that's partially is why they are almost irrelevant today
Channels is where we stick all the losers that can't hold their own in front of clients. Should have just been shown the door
Channels in terms of Marketing is pretty much an overlay and can be minimised. Channels in terms of Sales (and perhaps also Marketing were) are too siloed to each portfolio. Not limited to Channels but if IBM truly want to leverage partners and IBM product portfolios to the max, they need to break the internal boundaries between SW, HW, Cloud, Services, and various delivery teams first - it appears they are currently working on that part too.
"Channels just got too big!"
Wow - that's a pretty broad statement.
I worked in channels (software) for a number of years.
Around 2015 IBM realized getting partners to do the heavy lifting (marketing/sales/support) was a doozy. Low cost of sales etc. But given a sniff of financial support we got huge internal push back from direct saying that channels were getting it easy. And that old thing that direct teams were supporting the channel but not getting recognized. The reality is that partners (and dedicated IBM channel folk) are actually miles ahead in knowing the product portfolio, pricing/licensing, and listening to customers for a long term relationship.
I won't disclose direct vs. channel revenue, but over a number of years the field/direct teams were complaining like wildfire when channel sales grew. The direct guys were actively hostile. "They are stealing our revenue" etc etc. And then when they needed some real knowledge to support a direct deal, they were all over us.
Channel is in it for the long haul. Direct is for a quick buck. Do you think the customer doesn't see that?
So to tie this in to layoffs... I got laid off and my WW partners were screaming. I take no pride in that, it's just a matter of fact.
New IBM (exclusive of the Kyndryl environment) has to get down to 175k head count. Every consultant hired recommended 150-160k, but IBM has upped the number due to acquisions. That means approx 60k heads have to exit out of New IBM. There are only two ways to do that spinoffs or RA’s. IBM is much closer to acting on the slower growth areas remaining than folks think. IBM’s funding of 2 billion for new IBM (approx 20k worth of RA headcount) restructuring means IBM is going to spin-off a large part of the slower growth areas
So ask the next logical question What happens to a company that just laid off its marketing and sales force (tier 2 reps)? It either moves to a self service portal on line, or it gets outsourced. I believe IBM definitely has plans for the shrinking parts of IBM (TSS, power, storage, Watson health, TPP, legacy IBM cloud). Don’t be surprised if IBM spends some of their restructuring dollars on spinning some of these off vs just RA’ing
Highest areas of waste at IBM #1 Marketing (might be #2 after recent axe) Next is Channels Third is Digital and Fourth is the Summit Program
When IBM exited Intel, they doomed channels. Channels survived due to having multiple HW and SW offerings. Power and Storage are NICHE HW and SW offerings that don’t fund their staffing levels anymore. Look for one of the Intel producers to absorb IBM channels in the near future. It’s a win/win/win for all sides IBM lowers their marketing and sales costs, customers get to buy Power and storage, or convert to Intel driving conversion services (remember Intel is now viewed by the world as good enough vs Power and storage), and Intel sellers get a higher margin NICHE product to co-market with their intel offerings. It’s the thinkpad and Lenovo relationship all over again. It costs the Intel manufacturer zero to co-market IBM NICHE products along with their products. It’s all about driving costs out of IBM’s channel, and the best way to do that is to pay someone else to do the fulfillment job