Cognitive Era Channel Strategy targets SMBs

IBM unveiled an innovative cognitive era channel strategy at the 2016 PartnerWorld Leadership Conference in Orlando. Among many announcements, the iconic IT giant is creating opportunities for its products, services and platforms to become more accessible and affordable to SMBs (small to mid-size businesses).

That’s music to my ears, and to the readership of this blog, many of whom are SMB leaders.

The IBM cognitive era channel strategy is an ambitious one on a number of fronts. As IBM moves forward culturally, into a new leadership era, it is embracing Watson as the catalyst for business growth, expansion and sustainability. IBM Chairman, President and CEO Ginni Rometty is betting the house on IBM as key architect of the cognitive era.

IBM is leveraging their Watson cognitive platform capabilities within an increasingly digital business ecosystem. Watson’s beauty is its ability to comprehend, reason and learn. The platform gives companies enhanced business intelligence capabilities, making them more productive and competitive.

IBM, as a company, is set to disrupt itself. IBM GM of Global Business Partners Marc Dupaquier challenged channel partners to do the same: disrupt your business models and your sales models. Transform yourselves.

What’s in it for small to mid-size businesses?

The translation for small to mid-size business: It’s time to transform yourselves, as well. Your company has a ton of data that is “dark.” It is stored and not utilized. Out of sight, out of mind. Cognitive computing capabilities allow your company to extract relevant and valuable insights from formerly dark data. The result? Smarter, more competitive planning for your now data-driven business. Get your dark data out into the light.

I was skeptical prior to attending the meeting. Would the concept of a cognitive computing era further marginalize SMBs? This segment desperately needs help transitioning into data-driven businesses to sustain their growth.

IBM leadership has mindfully created an innovative cognitive era channel strategy providing much-needed resources and affordability to grow their presence in the SMB marketplace, which remains largely untapped. That strategy is good news for your SMB.

Key takeaways to chart your SMB cognitive era roadmap:

1. Yes, it is time for your SMB to become a digital business incorporating an encrypted, hybrid cloud strategy. As IBM GM Marc Dupaquier continuously reinforced: “Digital business is the new norm.” IBM believes they have addressed the fears of many businesses – regardless of size – about security and the cloud. Tom Rosamilia, senior vice president of IBM Systems, announced the launch of the new IBM z13s (“s” for security) mainframe heralded as the world’s most secure server built for the hybrid cloud. Most importantly: this server is affordable and available to mid-size organizations. That’s good news for the mid-size marketplace, who have been caught between a legacy IT rock and a Cloud migration strategy hard place regarding affordable security and speedy, total network protection.
2. IBM Channel Partners transition to a competency-centric strategy. IBM channel partners will rethink the relevance and value they offer to clients as the cognitive era channel strategy is rolled out through mid-2017. IBM GM Marc Dupaquier challenged channel partner leadership to think beyond hardware and product placement: instead, become competency-centric. This mandate catalyzes channel partners to “major” in specific competencies within specific market segments. IBM has created a new competency-specific curriculum for their channel partners (PartnerWorld University). The curriculum roadmap emphasizes client satisfaction and client success as the targets of channel partner service quality delivery. This strategy disrupts channel partners from complacently focusing on achieving traditional revenue endpoints. As channel partners deliver increased analytics capabilities to their customers, everyone’s business models shift.
3. Good News! IBM journeys into the largely untapped small to mid-size businesses (SMB) ecosystem. SMBs represent the fastest growing market segment (5.5% annually) and a $200B opportunity. Yet no single competitor has earned more than 5% market share. Brig Serman, Director, IBM Global Commercial Segment, recognizes that the Cognitive Era Holy Trinity of cognitive computing, predictive analytics and Watson insights are daunting to many SMBs, who wrestle with unpredictable revenue streams and current workforce skill sets which are not up to the task. His new program introduces SMB competency-centric channel partners. These channel partners are capable of truly partnering with SMBs to fill in the expertise and insight gaps holding these businesses back from sustained growth. Serman’s program invests in marketing and sales resources to support channel partner execution in local territories and will serve sole proprietorships through large mid-market organizations.

The engigmatic SMB marketplace offers tremendous opportunity.

IBM has a challenge as well as an opportunity in targeting the sometimes enigmatic SMB marketplace. The diversity of SMB business models and cultures present a new set of customer personas to become “centric” about. Developing SMB-competency will be challenging. What’s impressive is that the iconic IT giant is committed to walking their talk into the SMB marketplace.

The key to the success of this innovative cognitive era channel strategy rests on channel partners. Channel partners will need to decide whether to transition their own business models to serve small to mid-market organizations. This strategy necessitates leaning more heavily on partnering with the MSPs (managed service providers), CSPs (cloud service providers) and ISVs (independent software vendors) already serving small to mid-size companies.

IBM focus on industry- and customer-centric competencies in their partner channel may create a new species of channel partner, in the process: the SMB-centric channel partner.

The IBM journey will be fascinating to observe. More importantly, the success of their cognitive era initiative is critical to the sustainability of the SMB marketplace.

Babette N. Ten Haken is a strategist, analyst, author and blogger. Her focus: the interrelationship between teams, leadership and culture in technology and manufacturing.  Her Workshops target excellence in the execution of strategy. Babette began her career in clinical research where she was asked to bring clarity to stalemated cross-functional conversations. Her Playbook of collaboration hacks, Do YOU Mean Business?  is available on Amazon.com.