Sanjeev Aggarwal's Blog

February 24, 2015

SMB Spotlight: IBM’s Midmarket GM On New Partner Strategy and Programs for SMB and Midmarket Companies (Part 2)

Sanjeev: Hi, this Sanjeev Aggarwal from the SMB Group, and in today’s SMB Spotlight I’m speaking with John Mason, who is IBM’s General Manager for Midmarket. Hi John. Thanks for joining me in this two-part discussion about new IBM developments and solutions that are relevant for the midmarket and SMB space. Continuing our discussion in this second post, we focus on IBM’g go-to-market and channel strategy for SMBs and midmarket.

Sanjeev: How is IBM’s channel involved in marketing and selling some of these new solutions?

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John: A couple of different ways. So for Verse, for example, we make that available to and through our business partners and they have an opportunity to develop recurring revenue model, annuity model and can also add their own consultative services, things like messaging migration or post-implementation support.

We’ve also introduced something called Watson Explorer for business partners. So, that really gives a very powerful cognitive search and analytics. And through this Explorer program, the business partner can identify high revenue potential and resale opportunities on Watson Explorer and then we continue to expand that obviously into other areas. So there’s are really significant joint market investments that we make together with our business partners.

I believe it’s in the order of 100 million dollar investment in co-marketing that we spend with our business partners together. We invest and they invest and then we jointly market to identify new opportunities.

One example is in the UK where we used a very interesting customer reference from Australia. The rugby team in Australia was using, in this case, SPSS to do predictive analytics on player injuries. The customer was called the Waratahs rugby team from Australia. They were using multiple data sources, looking at the players’ training program, their previous injuries, history of injuries, number of minutes they played in matches, that kind of thing to predict future injury probabilities.

The UK team took that customer reference, turned it into a marketing campaign, which was essentially a mock newspaper. That the UK IBM team together with specific, I think, two or three business partners sent this out to 97 different sports clubs in the UK, rugby teams, soccer teams, cricket teams, with a headline that said, you know something about that particular club’s lead player getting injured in three weeks’ time.

So, they sent, for example, to Manchester United such-and-such a player gets injured in three weeks. And then explained within the text how they could have used the IBM analytics tools working with the business partner to predict and effectively reduce the likelihood of injuries and therefore seen significant benefits to the team, which counts on having a full roster of players, etc.

We sent that to 97 different clubs and within a week we had 47 calls back into either IBM or the business partner asking for a follow-on meeting to see how they could actually take advantage of this same capability. And right now, we’re in the process of qualifying a number of those different opportunities into actual closed deals together with the business partners.

So what’s being indicated there is having an actual customer reference in the industry. Having a partner with the skillset, in this case analytics, and having that partner engaged early on in the joint demand generation efforts that we co-fund. That’s where we’ve seen very high response rates and then a much higher yield on the marketing activity.

Sanjeev: That is a great example, more specifically because small and midmarket would like to know how companies similar to theirs are using these solutions and what benefits they’re getting out of them.

John: Yeah, I think the key is you’re not just talking to the customer about technology but actually listening for their business challenge and in their language that’s relevant to them and their particular industry and turning that technology into a solution to that particular challenge.

So that’s where we’re also working programmatically with a number of our business partners to try to have that intersection point between industry expertise and technical know-how around specific cloud, analytics, mobile and social solution plays that can build on an existing customer reference in the same industry to find new opportunities.

Sanjeev: And I’m sure examples like these will open up new opportunities for IBM not only in accounts that have been familiar with IBM but also net new accounts.

John: Yes.

Sanjeev: Ease of use and the value they’re providing to SMBs.

John: Exactly. Yeah.

Sanjeev: So with IBM having so many products and solutions, how do SMBs find out about some of these new solutions that are innovative, ease to use, cloud-based?

John: A couple of different ways. One is obviously through our business partners. A lot of small and mid-sized businesses treat the business partner almost as their IT department whether it’s a cloud service provider or a more traditional business partner. So, quite often that is an inroad for a customer to start using IBM. In some cases, they may not even know they’re using IBM. It could be an embedded part of a cloud service provider solution that the SMB is buying and it’s actually IBM technology that’s provided there embedded in the solution. So, that’s one way.

Also, through traditional business partners with different solutions that we provide through them. But that is in some ways kind of a second-level connection. It was important for us to also establish a direct connection point for small and mid-sized businesses. In particular, to see what is available in terms of cloud services from IBM and from our business partners.

So, that led us to develop the IBM Cloud Marketplace, which brings together this very broad portfolio of offerings that IBM has itself but also third-party cloud services. And it’s organized, it’s a very simple, you can filter in ways, you can choose by self-identifying, if you like, as a developer or as an IT operations person or as a line of business decision maker. And within the line of business decision making you can choose by horizontal sort of functional area, marketing, human resources, finance, etc. or you can also sort by industry.

So, we’re really trying to use that as an on ramp for a customer to explore some of these solutions that they may not even realize IBM provides. And it could be solutions from third parties. In some cases, they even compete with IBM’s own offerings. We won’t exclude people who have a competing cloud service either. It’s important for us to demonstrate to customers and partners that we want to participate in an eco-system, which is open and allow customers to choose the solutions that best meet their needs, not necessarily force them to buy in the ways that we dictate. So it’s really about being a participant in an active but open eco-system of partners.

Sanjeev: Can SMBs if they go to this marketplace find out solutions that they can try before they buy?

John: Yeah, absolutely. One of the key requirements that we heard was the ability to get a free trial and to have limited free trial period or limited functionality for free for the customer to get a sense for whether this is a good fit. So we have a number of try before you buy type offerings. SoftLayer is one of them. You get a free month of virtual server from SoftLayer. IBM Verse, the communication offering that we mentioned before, has a 90-day free trial. Watson Analytics there’s a free version available, and then depending on which additional sources you want to use, then it steps up into a fee-based offering.

Sanjeev: How transparent is the marketplace for the users or SMBs to see not only the trial solutions but how much is the cloud solution going to cost them on a monthly basis if they do decide to go ahead and acquire that solution?

John: It varies a little bit, depending on the offerings. Obviously, some of the offerings are relatively simple, can be purchased with a credit card, in which case the pricing is clear, up-front on a per-seat, per-month basis which is the case for SoftLayer and some of the other offerings like FiberLink.

Sanjeev: How about like Watson Analytics?

John: Watson Analytics is free right now. We’re moving to additional tiers of fee-based offerings. So the switch should be coming out any time now.

Sanjeev: OK. Thanks. And what resources does IBM have to educate, train SMBs on the adoption of these new solutions? I think some of them you mentioned before. Are there any online videos, information content, online tutorials that can help them with a faster on ramp and different usage scenarios?

John: Yeah. Across every one of these solutions we have a wide range of video tutorials as well as user communities where users can pose questions, comments, share their own experiences as well as more structured tutorial content. Much of this, by the way, is accessible also through the IBM Cloud Marketplace. And so, if you start to explore one particular solution and are looking for more information we usually provide links within that same space to help the user identify more training, white papers and access to the community.

Similarly, by the way, for our business partners we also have a dedicated portal that we’ve just completely revamped called PartnerWorld where we have literally thousands of partners who have access to partner training materials and communities as well.

Sanjeev: OK, great. One last question. Does IBM and its partners have a program to help SMBs migrate from, say, Gmail to a Verse type of a solution?

John: We have several IBM Cloud Certified Business Partners who offer this type of migration, many of who are accessible through the Cloud Marketplace.

Sanjeev: Yeah, because sometimes the issue for SMBs is not only having new and innovative solutions, easy to use solutions available, they need to see how to move to adopt these new solutions based on what they have because in some cases they have lots of existing data.

John: That’s also an opportunity for our business partners to provide their value in the transition and migration type services as well. That’s something that we may not do directly. We, I know, are looking at tools that we could provide to help with that, but it’s also an area that a lot of our business partners have years of expertise in helping migrate from one platform to another.

Sanjeev: Yeah, definitely. I think if you can provide some of these tools to help the business partners make the life of SMBs easier in this migration I think it will go a long way to help both IBM and the partners. Great. Thank you.

John: Sanjeev, one other thing I forgot to mention is also on a cloud infrastructure approach with software, particularly for startups, we’ve also recently introduced a free cloud access On Ramp to help startups get started on using SoftLayer by providing up to $120,000 worth of free usage of SoftLayer for startups. That’s maybe something that they can also consider.

Sanjeev: How can startups can find out about the availability of these resources.

John: That was announced in November and you can view the press release on ibm.com: IBM Global Entrepreneur Program.

Sanjeev: Thanks for this very informative session. I think IBM, at least today, does have a really good roster of products to help SMBs be more productive in their journey to compete with the larger companies. I look forward to seeing the progress some of these solutions make in the upcoming months. Again, thanks for taking the time to talk to me.

John: Thanks, Sanjeev. Appreciate the time and I certainly look forward to continuing the discussion. Thank you.

This is the second of a two-part SMB Spotlight interview with John Mason, IBM’s General Manager for Midmarket. In the first post, we discuss new IBM developments and solutions that are relevant for the midmarket and SMB space. (link to first post)

SMB Spotlight: IBM’s Midmarket GM Talks About New Strategy and Solutions for SMBs Midmarket Companies (Part 1)

Sanjeev: Hi, this Sanjeev Aggarwal from the SMB Group, and in today’s SMB Spotlight I’m speaking with John Mason, who is IBM’s General Manager for Midmarket. Hi John. Thanks for joining me in this two-part discussion about new IBM developments and solutions that are relevant for the midmarket and SMB space. In our first discussion, I’d like to focus on the opportunities that IBM is pursuing in this area.

John: Thank you.

Sanjeev: Now that you’ve been in this role for more than a year, what opportunities do you see for IBM to be more successful in this segment, looking at it from not only the recent products that IBM has announced, but overall?

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John: First of all, Sanjeev, this a unique time in the market particularly for small and mid-sized companies to take advantage of what’s truly a revolutionary change. Not just in terms of the technologies but the economic models that are being disrupted, by not just one technology change but really four: cloud, analytics, mobile and social, which mutually reinforcing each other and changing not just the technology architecture but disrupting whole new business models.

We’ve seen companies like Uber disrupting the taxi industry, Airbnb in hotels, Fitbit, a software customer of IBM, in health and wellness. So, it’s really opening up opportunities for small and mid-sized companies to move very quickly and compete in areas where previously the capital expenditure required to get to scale may have prevented them or certainly been a significant obstacle to building a new business.

Today, particularly thanks to cloud that is no longer a barrier. It’s really not constrained by the availability of capital at this point, so the company that has a disruptive idea can really go after huge opportunities and industries that may not have seemed to lend themselves to disruption. But now, because of the scale and access that companies have thanks to the cloud and thanks to mobile and social creating this massive data that can then be analyzed and used to get insight, companies of all sizes can essentially disrupt industries and find ways to compete and add value to their customers in ways that maybe they could never have even imagined before.

Sanjeev: Surely I definitely agree with you there. But quickly looking at the opportunities cloud solutions create for SMBs, how do you see IBM, with some of the recently introduced products like IBM Verse and Watson Analytics, helping SMBs and midmarket companies?

John: I would start, first of all at the infrastructure layer, where about a year and a half ago we acquired a company called SoftLayer, which is our Infrastructure as a Service(IaaS) offering. So that really is the key enabler of providing access to cloud, whether it’s simple public cloud, bare metal server that can be dedicated or private cloud implementations.

On top of that infrastructure we introduced last year our Platform as a Service(PaaS) offering called BlueMix, which lets small and mid-sized businesses and developers in larger companies quickly develop new cloud services and applications, prototype, try something and then quickly deploy and adapt using agile methodologies, for example, to really respond quickly, and again, with minimal upfront capital expense.

But with very simple tools that provide templates to remove some of the tedious coding parts of developing any new cloud service with reusable modules, so it really speeds up development, prototyping and deployment.

And then, on top of the Infrastructure as a Service and then the Platform as a Service, with BlueMix we also have literally over 100 Software as a Service (SaaS) offerings, some of which are really more targeted at larger enterprises. But increasingly, we’re also adding some very simple, easy-to-use, fast offerings that are designed, from the ground up really, for small and mid-sized companies to take advantage of.

So you mentioned Watson Analytics, which I think is one of the most exciting new areas for any line of business user. It’s I think as relevant for someone working in a marketing department of a large company or sales department of a small company. To take a set of data sitting in a spreadsheet or other sources that we’re adding over time and use Watson Analytics to cleanse the data and start to arrange it in ways and visualize it so that the user can quickly derive some meaningful insight from what may previously just have been a collection of numbers.

With very sort of natural language query, you don’t have to have a data scientist sitting next to you during the interpretation of what the business need into some complex algorithm. It will use natural language querying and cognition to provide answers to relatively simple business questions based on simple sources of data like an Excel spreadsheet. That’s one example.

You mentioned IBM Verse as well, which again, is very simple. In this case, a communications and collaboration tool delivered on top of the software cloud infrastructure and also guided by analytics at its core to learn from the user behavior and adapt to how that particular user works to really provide instant usable interaction and collaboration.

It’s optimized for mobile and web environments and provides the most relevant communication with the people that you interact with most. Rather than having to sort through long lists of emails or other forms of communication, it’s all there in one simple interface provided in a way that you can use and in the way that you like to work.

These are newer cloud services that we’ve introduced. We’re using agile methodologies to respond quickly as we get these out. In the case of both Watson Analytics and IBM Verse, they’re both available in a freemium model. So, our objective here is to get it in the hands of lots of people, get user feedback and then quickly respond based on the feedback in real life use situations to tune the product and continue to improve it. So, that’s something that we are looking forward to seeing rapid iterations to continue the improved user experience.

Sanjeev: So, what has been the feedback from some of the early adopters of these solutions, especially as it relates to ease of use and the value that they’re getting from using these solutions?

John: Well, I think ease of use was at the core of both the Verse and the Watson Analytics development. They actually came out of our new digital experience labs and were designed with, by and for millennials in a sense. Our belief going into the development of those products was that if we could satisfy millennial users then we would probably also satisfy other groups of users.

The feedback so far has been overwhelmingly positive but I think also continued requests for more ease of use, more sort of guided initial training and at least tutorials to help people get started. The teams have been taking a lot of feedback and working on easier on ramps to the products. Which I think, once users start using them, they start to get comfortable and see the value. The challenging phase is that very first usage experience. That’s why a lot of the current focus is to continue to improve that on ramp experience.

This is the first of a two-part SMB Spotlight interview with John Mason, IBM’s General Manager for Midmarket. In the second post, we discuss how IBM is making its new solutions more accessible to SMB and midmarket companies and channel partners. (link to second post)

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