Major Market Impact
IBM has announced a service provider partnership program in Europe that will have major implications on how large and small digital business service providers (DBSPs) operate, not only in Europe, but also throughout the world. For clients, it means one-stop shopping for technology and niche services that run the gamut from legacy integration to branding services, in a coordinated and joint way between the DBSP and IBM. It presents a major challenge to legacy consultants on the continent, but its implications are worldwide.
Event Detail
The market trend to larger and more complex projects has forced a re-evaluation by most DBSPs of their technology providers and legacy partnerships. These partnerships are meant to assist them in delivering the new solutions now wanted by their clients, and are crucial to their survival. On the other side of the coin, IBM needs to familiarize the market with its technology and, of course, sell the solutions and niche services offered by IBM Global Services (IGS). IGS, though at times a competitor of most DBSPs, has the capacity to deliver large legacy solutions, but is generally recognized as lacking in design, branding and diverse technology application capabilities. IBM recognizes it needs the help of more recognized service providers in the field to get its message out.
An organization the size of IBM has a great deal more to offer than the legacy consultants such as Andersen, Deloitte, PwC and (in Europe) Cap Gemini Ernst & Young. It actually has the technology to deploy and service to back it up, both on a global scale. It is also the major hardware infrastructure supplier for most companies of any size, worldwide. In setting up its partnership program, IBM makes no bones about its capabilities, and is willing to share those capabilities with its partners.
In a joint announcement with AGENCY.com, marchFIRST.com and Organic.com - notably all US based but with worldwide offices - IBM outlined its partnership program. Currently, it has 280 partners in its European partnership with the intent to reach 300 partners. Each partner agreement is individually negotiated to encompass joint business objectives, market niche, company localization, partner business goals and core competencies. Most agreements cover joint marketing efforts, co-branding, joint technology delivery and shared laboratory and development facilities.
The partnership program has implications worldwide. IBM intends to roll it out in Asia later this year, and with the increasing globalization / localization demands of clients, experience gained from these ventures will migrate back to North America.
Watch for TEC's upcoming article on IBM's announcement for a fuller analysis.
User Recommendations
This event should awaken many users to the fact that IBM has large-scale solution offerings in the e-business space. IBM knows it has to gain market share with its products, and part of its uphill battle is credibility and awareness of its products. These IBM products have not seen as much action because until recently most web projects were not scaled to make full use of them.
The partnership program of IBM obviously is directed at projects in the millions of dollar range, and up. At this scale, legacy consultants have had the edge over the upstart companies like Organic or Agency and marchFirst: however, IBM's announcement should provide more grist to the mills of users who are selecting technology partners on this scale.
One of the problems with legacy consultants is that once they are involved with your company, it can get very hard for you to keep your IT projects and even your business under your own control. Although delivering value is - or should be - the main goal of the legacy consultants, stories are rampant about IT departments being overrun and corporate managers being pushed aside. This is an image the legacy consultants are finding it important to change as they seek market share in the e-business world. Their massive presence in a company can be good or bad, depending on the service delivered and the nature of the IT department that suffers the consequences.
The newer consultancies have a very different culture that provides development, knowledge transfer, continual support, and, for some now, the capacity and depth to deliver legacy solutions with IBM. In turn, they can provide an attractive career path for IT department technologists. In the new economy, you should weigh both the good side and the bad side of losing staff to your service provider. Such ties can actually enhance the quality of service if they mean the service provider gains a better understanding of your business, even though on the short term this could injure your IT department. Also, these migrations may stop key personnel ending up in competitive camps. Take account of the fact that it is likely you will be engaged with your service provider for at least a year, and likely long after that, as you continue to rely on them for maintaining you on the leading edge. Also, given that IT turnover is generally well over 10%, an unhappy employee may want to make the move elsewhere anyway.
Under the partnership you may find yourself with IBM solutions and a focus on IBM products, such as WebSphere, Lotus Domino & Notes, ThinkPads and RS/6000 machines. If you want other solutions, you may need to fight for them and make your case - and you had better have some good technical people on your side. However, this is not your father's IBM: even IGS offers non-IBM competing solutions to its clients.
Be also aware, if you are offered a joint venture by an IBM partner that will include IBM, that you may need to manage the joint relationship and define clearly who does what for your best solution / cost advantage.
North Americans should be aware that IGS in Europe has a different flavor than IGS in North America. IGS in Europe is more a systems integrator than a business consultant/partner, and consequently service provider partnerships in Europe do differ in nature from the American model. On a worldwide basis, such 'localization' may have some impact if your business is trans-national.