Last month, I attended an IBM Systems and Technology Group (STG) Executive Summit in the US, where IBM outlined its key strategies for accelerating sales in growth markets, including:
· Aggressively marketing PureSystems. IBM is positioning PureSystems (a pre-integrated, converged system of servers, storage, and networking technology with automated self-management and built-in SmartCloud technology) as an integrated and simplified data center offering to help organizations reduce the money and time they spend on the management and administration of servers.
· Continuing to expand in “tier two” cities. Over the next 12 months, IBM plans to continue its expansion outside of major metropolitan areas by opening small branches in nearly 100 locations in growth markets, most notably India, China, Brazil, and Russia.
· Expanding channel capabilities and accelerating new routes to market. IBMplans to certify 2,800 global resellers on PureSystems in 2013 and upgrade the solution and technical expertise of 500 of its partners. Also, the company plans to drive the revenue of managed service providers (MSPs) by working with them closely to develop cloud-based services and solutions on PureSystems.
Considering the vast potential demand from growth markets and slowdown in developed markets, IBM is among the growing camp of multinational vendors aggressively targeting them as an engine for future business. Some of my key observations on IBMs event and recent announcements:
· Although PureSystems is competing in a crowded converged infrastructure market – with HP, Dell, Oracle and Cisco UCS – it has strong potential. A key selling point for PureSystems’ in growth markets will be platform openness. IBM has developed PureSystems with an aim to support a variety of operating systems; virtualization offerings; storage; and adapters and upstream devices.
· The mid-market segment and smarter city initiatives in growth markets are sweet spots.We see the mid-market segment (100-999 employee size) in growth markets increasingly demanding integrated, self-managed solutions due to limited IT budgets and staff constraints. Another attractive market for converged solutions is the local and provincial government sector in growth markets where many public sector organizations are centralizing fragmented infrastructure to reduce costs and improve efficiency, often as part of smarter city initiatives.
· Data center optimization and transformation messaging will be far more effective than cloud enablement. Organizations in growth markets are primarily focused on simplifying data center complexities – with cloud enablement typically a secondary consideration or initiative. IBM and its channel partners should therefore focus on PureSystems messaging around this primary organizational requirement.
IBM is competing in a crowded and highly competitive market, but the PureSystems platform – and particularly its aims to create it as an open platform – is a strong offering with considerable clout in growth markets. Moreover, IBM is expanding the playing field with an aggressive outreach to a broader geographic footprint in dozens of tier 2 cities where competition is less formidable. Building and enabling the channel in these new markets – and even tier 1 cities – will take time and results will not be immediate, but with continued investment and continuity, PureSystems can be expected to see strong growth in the markets IBM is targeting.