Has IBM Changed its Partner Strategy? The Hunt for OEMs

March 18, 2008

Has IBM Changed its Partner Strategy? The Hunt for OEMs

Partners are getting more and more important to the major software players. IBM announced a very interesting relationship with Kana, a $60 million solution provider of multi-channel customer service software. This is indeed a growing area in the market. Kana sells its software to about 60% of the Fortune 100. The company started in 1996 and has managed to survive some rough times and come out strong.

While IBM, like other major industry players rely on their partner ecosystem as an important go to market strategy. Some partnerships work better than others. What I thought was particularly interesting about the Kana partnership is its depth. Kana has decided to embed IBM’s DB2, WebSphere (including the WebSphere Process Server) into its solutions. SOA is an important new direction for Kana and the two companies plan to do some joint development in this area. Relationships like this don’t just happen. More than half of Kana’s customers are also IBM customers. This is important because increasingly the customers that I am talking to are looking to buy solutions from one trusted provider rather than trying to get a bunch of individual vendors to work together.

IBM has had a strategy for more than a decade of partnering with packaged software providers rather than being in that business. On one level, this can be viewed as a risky strategy. One only has to look at the roles of Oracle and SAP in the market to wonder if these packaged offerings will swallow up the entire ISV partner ecosystem like a black hole. I guess that my conclusion is that it just isn’t that simple. Customers that I have spent time with look at software packages from a different vantage point than infrastructure software. Because Oracle or SAP provides an excellent package for supply chain management or accounting management does not necessarily mean that they are the right choice for middleware or SOA infrastructure.

IBM’s partner strategy with ISVs has evolved over the past several years. I see a change from the desire to have lots of partners who will enable their software to run one or more IBM software offerings to deeper more strategic relationships. The Kana relationship is an OEM relationship — not a simple membership in a partner program. In fact, IBM has more than 30 of these OEM partnerships with vendors including Fair Issacs, Cisco, Nortel, and PTC — to name a couple. I expect that OEM partners are going to became an important center focus of IBM’s partnering strategy in the coming year.

About Judith Hurwitz

Judith Hurwitz is an author, speaker and business technology consultant with decades of experience.

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