February 7, 2013
Emerson Network Power today announced that it is entering into a significant partnership with IBM to both integrate Emerson’s new Trellis DCIM suite into IBM’s ITSM products as well as to jointly sell Trellis to IBM customers. This partnership has the potential to reshape the DCIM market segment for several reasons:
- Connection to enterprise IT — Emerson has sold a lot of chillers, UPS and PDU equipment and has tremendous cachet with facilities types, but they don’t have a lot of people who know how to talk IT. IBM has these people in spades.
- IBM can use a DCIM offering — IBM, despite being a huge player in the IT infrastructure and data center space, does not have a DCIM product. Its Maximo product seems to be more of a dressed up asset management product, and this partnership is an acknowledgement of the fact that to build a full-fledged DCIM product would have been both expensive and time-consuming.
- IBM adds sales bandwidth — My belief is that the development of the DCIM market has been delivery bandwidth constrained. Market leaders Nlyte, Emerson and Schneider do not have enough people to address the emerging total demand, and the host of smaller players are even further behind. IBM has the potential to massively multiply Emerson’s ability to deliver to the market.
The impact of this partnership will ripple through the industry, across both users, Emerson’s competitors and IBM’s competitors:
- Prospective DCIM users now have the option to buy from one of the dominant industry IT system suppliers, and one with a nearly unlimited services capability.
- Emerson competitors will be under more pressure to bolster their delivery channels and to find similar partnerships.
- IBM competitors in both the hardware and management software will be looking for DCIM vendors to partner with to fill in their portfolios to match IBM.
Of course, the partnership is not without risks, primarily execution risks. Among the potential pitfalls:
- Before a lure can catch a fish, it must first catch a fisherman — If IBM does not devote significant resources to this program, including sales training and incentives, and building a delivery and integration capability, the program may deliver lackluster performance. I assume that IBM’s sales force will be used to refer opportunities to specialized overlay sales and delivery groups, and that expertise will be transferred to IBM as volume builds.
- Channel panic — Emerson’s channel partners will probably not be happy about this. Since the release is rather sparse on details, Emerson and IBM will have to move quickly to reassure the Emerson channel that they will not be competing against IBM, but rather they will remain part of the sales equation. But that’s easier said than done when there are multiple actors all trying to settle on the right channels programs. The good news is that Emerson’s partners today derive the bulk of their revenues from traditional Emerson product lines, not DCIM, so there will be little pressure for precipitous migration. On the bright side, large partners who have practices around both Emerson and IBM products will probably do very well with this new liaison.
- Cultural incompatibility — Always a risk in any partnership, but in this case I think the two companies are actually a pretty good match. Both companies understand long-term enterprise relationships, and both are deeply steeped in an enterprise data center operational culture, so there will be no wild mismatch between how they approach their common customers.
My net takeaway is that this a major dislocation in the emerging DCIM segment and will trigger a wave of realignment among DCIM, systems and software vendors. The end beneficiaries will be potential DCIM users, who have just seen their ability to acquire and support such solutions multiplied by a large factor, and now available from a name that is very familiar to the IT stakeholders. Emerson gets a major leg up on its competitors, and IBM gets a powerful product offering that it can use to enhance its already strong position as an enterprise data center supplier.