TOP TEN COMPLAINTS ABOUT IBM

[Anonymous]

Top ten complaints about IBM
 August 2007  
1. IBM Can’t Get Timely Special Bid Product Price Quotes
It has been an issue for years. It’s still an issue that comes up time and time again: VARs say IBM is slow to respond to any special bid pricing. “Being a US$90 billion company, the process of trying to get price quotes in a timely fashion has been very, very diffcult,” says one IBM partner complaining about the IBM bureaucracy.

“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.

Meanwhile, solution providers complain that they still are not being aggressively courted to work with IBM Global Services. Greg Starr, COO of I.T. Works, a Houston Texas solution provider specializing in VoIP, which had worked closely with IGS in the past, said his IGS related work is down significantly this year. He said his IGS-related business is down to about $30,000, down from about $125,000 in the same period one year ago. “They’ve had a lot of changes with principals leaving, a lot of project managers layed off, and some things moving overseas,” said Starr. “The new people coming in don’t know the partners and we have to build up the relationships between IGS and us all over.”

[Author]

August 8, 2007 at 11:37 AM