*NEWS*TOP TEN COMPLAINTS ABOUT IBM

“If I order some
X Series open system servers for a customer, I put in for pricing with
IBM, and wait for the pricing, which could take a week to two weeks.
Meanwhile, if the customer calls CDW, HP’s largest business partner,
the customer can set up a a configuration and in less than 20 minutes
CDW gets a price back to customer.

It goes to the integration center and it can be on a truck that afternoon and arrive at the customer the next day.”

2. IBM Is Arrogant
VARs
frequently use the word arrogant to describe IBM reps and executives in
the field. They say IBM representatives are not doing a good job of
listening and responding to VAR complaints and concerns. One VAR
decided to pull the plug on his IBM relationship after what he called a
“pompous” and “arrogant” IBM rep demanded an additional US$10,000 to
US$15,000 investment from the solution provider in certifications and
training without any offer for support or assistance.

Another
large partner complained of a hard nosed IBM executive that was simply
not interested in listening to solution provider complaints. Solution
providers say IBM needs new channel talent. “They have the same 30-year
veterans they have always had,” complained one IBM partner. “They need
a new mindset and new blood: someone who knows how to get the channel
involved.” 3. IBM Pricing is Not Competitive With HP And Dell.
Solution providers say that IBM’s pricing remains 10 to 15 percent higher than Hewlett Packard’s or Dell’s.

This
occurs at a time when rival Hewlett Packard has replaced IBM as the
number one technology company in the world. VARs say the pricing
premium is another sign of IBM’s tendency to position itself in the
often less price sensitive enterprise market segment rather than in the
heart of the small and medium business (SMB) market.

4. IBM Offers A Limited SMB Product Line
VARs
say IBM’s small SMB product footprint may be the biggest hurdle the
computer giant has to overcome as it attempts to double its SMB market
share. The IBM Thinkpad and desktop computers often opened doors into
the SMB that led to more profitable hardware and software sales. VARs
say IBM appears to be pushing them to sell System I and System P
products rather than Intel based System X products.

“Ever since
they got rid of Lenovo, they can’t handle resellers that sell just low
end blade servers and low end storage,” complained one SMB VAR. “They
would rather you sell high end stuff.” IBMers publically scoff at HP’s
desktop and printer products, particularly consumer offerings, but
those products are opening the door to more sophisticated small
business solution sales.

5. IBM Lacks Highly Visible Executives That Understand The SMB Channel
VARs
say that IBM simply does not have a lot of executives that have a deep
knowledge of the small to medium systems (SMB) channel. They say former
IBM Vice President of Distribution Channels Frank Vitagliano’s decision
to leave IBM last March and take the top channel job at Juniper
Networks has left the company without a highly charged and visible
advocate in the SMB channel.

“IBM may say they are channel
friendly but they don’t have the experience to engage the channel
properly,” says one large IBM hardware partner whose IBM sales are down
30 percent this year. “They need to have a channel presence and relearn
how to engage with the channel.” So just who is IBM’s US Channel Chief?
Manys VARs say they have no idea who that is.

6. A Falloff In Channel Field Rep Coverage
VARs
complain that their IBM channel rep coverage disappeared after IBM sold
the PC business to Lenovo two years ago. IBM insists that channel
face-to-face coverage is not down and tells VARs that there are more
IBMers than ever helping VARs in the field. Many VARs say that is
simply not the case. “I have not seen an IBM rep in here in a year,”
said one solution provider. “HP brings a team that is right there
working with the reseller. We have an HP printer rep, a system rep, a
storage rep, and a server rep. We have a team of five people that
attack our account.”

Pete Busam, vice president and COO of
Decisive Business Systems, a Pennsauken, N.J. solution provider, said
he invited IBM to discuss strategic account opportunities a number of
times, but never had anyone follow up with him. “IBM never came in and
talked to us,” he said. “We got a bunch of lip service. What am I
supposed to do? I’m not going to chase them. They keep saying they want
more of my business, but they don’t do anything to get it. I’m doing
great with HP. They are partnering across the board with us.”

7. IBM’s Channel Programs Are Not As Strong As Hewlett Packard’s PartnerOne
IBM
SMB partners say IBM’s SMB channel programs, which used to be
considered the most lucrative in the channel, have now taken a backseat
to rival Hewlett Packard’s PartnerOne program. They say IBM’s SMB
channel programs are no longer the gold standard for partner
profitability. At the same time, they say the sales, general and
administrative (SG&A) costs associated with managing the IBM
partnership have risen dramatically in the last years. “IBM has made so
many bad choices on programs that half the time you don’t get your
commission even after the deal is done unless they decide to give it to
you after filing three more documents, a purchase order and a letter
from the customer that says the work was done,” says one IBM partner.

8. IBM’s Bureaucracy Makes It Hard To Do Business With The Company
Partners
say it is just plain difficult to cut through the IBM bureaucracy to
get answers or help working through SMB customer problems. “At HP, the
message is clear, everything is defined and everything runs smoothly,”
said a senior executive for a large VAR 500 solution provider. “At IBM
the left hand doesn’t talk to the right hand. They don’t know their own
programs. The IBM channel reps working with the resellers are not
working functionally with the product reps. It is a disorganized ugly
mess.”

The same solution provider executive complains that IBM
has become a lot like a bloated government agency. “They’ve got a
seriouis management problem over there,” he says. “They are the
government. They have turned into a bureaucracy and everybody is just
waiting for retirement. Ultimately that’s the issue. It’s about not
setting clear business objectives, accountability, roles and
responsibilities. They are not doing it. There is nothing worse than
ambivalence. And that is pretty much where we are sitting right now
with IBM.”

9. IBM Creates Direct Sales Channel Conflict
IBM
claims that VARs are the primary route to market for SMB sales, but
VARs report time and time again that IBM’s direct sales group is taking
deals direct. “The IBM direct channel conflict is as big as ever
because they don’t have a champion of the channel who is getting the
business to go through the channel,” said one top solution provider
executive. “They don’t care how they get it. They just want the
business.” Another large IBM partner complains that the vendor’s
tendency to want to take all large deals directly is its biggest
problem. “There is a 20 percent delta between IBM direct pricing and
channel pricing,” said the executive. “Channel pricing should be
cheaper, not more expensive than IBM direct.”

10. IBM Has Failed To Leverage Its Software And Services Assets
Solution
providers say that IBM’s inability to leverage its software and
services assets. They complain that IBM’s Software Group, which remains
a standalone unit under the recent IBM SMB restructuring, is just not
working all that closely with hardware partners. “I think you can
develop more share of the wallet coming from the software stack,” said
one channel executive. “They should leverage that. But I don’t see a
lot of that going on.” Another solution provider says the only part of
IBM that he views as strategic to his business is the software group.