IBM and Radical Simplicity? Real Change for
Big Blue's Mid-Market Strategy
Observations from the IBM Influence Summit - Greenwich, CT (Nov. 5-6)
By Beth Vanni, Director Consulting Services at Amazon Consulting
Can it really be true? More than five IBM executives shared a common vision of the mid-market opportunity? Everyone's slides truly aligning on their view of the market and how they're investing in it? Multiple real life examples of how IBM is acting in a highly personalized, solutions-oriented way with small to mid-size businesses? A common fervor across the business units and geographies for becoming "radically simple" to do business with? I could almost not believe my ears!
Yes, we've heard it before as a statement of intent. And, no doubt, IBM has had many initiatives in the past focused on the non-enterprise markets. In fact, at this past Spring's Leadership Conference in Los Angeles, Rich Hume, then two days in the job as GM of the company's business partner community, declared his plan to apply significant resources to partner engagement in the mid-market. At that same event, the Lotus Foundations bundle was announced as well. But, as I sat at the IBM Influence Event this week in Greenwich, Connecticut two things hit me right between the eyes: IBM has been really listening to customers and partners about their needs and they've got new fire in their belly about how to succeed in the mid-market and growth markets.
This event was quite different than last year's.
At last year's event there were a lot of plans for new product solutions, services and sales coverage models to focus on mid-market customers. But, they were just that at the time — plans. This year, every one of the IBM executives had results, proof points and got really focused and serious about success in what they call their "General Business" markets. Renewed vigor spilled forth about vastly overhauling how they are creating products and services (partners have to be part of the requirements definition process), about getting "radically simple" in their products and business processes (no small feat, by their own admittance) and about engaging partners in everything they do in this market. My heart brimmed over with enthusiasm! Here are some of the proof points I heard that gave me reason to sit up from the thousands of PowerPoint slides and take notice:
- They absolutely have a well-defined customer segmentation model that acknowledges that not all small and medium sized businesses look or act alike
- They're doing detailed market analysis studies on just the mid-market (1000 - 100 employees) to get connected to trends in business model innovation and IT usage
- They've shifted significantly away from hardware sales to the mid-market customer set over the past two years (45% in 2004 to 20% in 2007) and are uniquely focused on managed services and software
- They're realigning their field and inside teams, calling on the mid-market to be industry focused vs. regionally focused. Reps have to "declare an industry major"
- IBM Marketing generated 42,000 leads this past year in the General Business space, worth $3.7b and resulting in $850m in new midmarket business
- Each brand manager in their Technology Services group has to have a 2/3 majority support from the general business regional sales teams before launching a new service. Wow!
- 4,000 different business partners are engaged in IBM's "Value-Nets" where partners selling into the mid-market come together to network and build partnerships aimed at helping them sell more effectively
- IBM now has over 600 Express Advantage solution bundles focused on the mid-market, with 145 gaining regular sales traction and 15 dubbed as "super hero" offerings generating significant incremental business
OK, enough already. Yes, I drank the cool aid. But, it was fun to see IBM fired up and excited about becoming simpler to do business with. They seemed genuinely excited about doing business in a more flexible, dynamic way, really understanding the needs of smaller customers and applying their significant resources to succeeding in this market. It's certainly a good time for them to get new religion, be customer relevant and leverage business partners to achieve market scale. God knows HP and, to a lesser extent, Dell will give them a run for their money in this regard. Well, we'll watch and see how the elephant can dance. IBM, radically simple? Hmmm. . . I guess if the U.S. can put a young black man in the Oval Office, anything's possible.
