The Key to IBM's Midmarket Strategy: MSPs

Andy Monshaw

Monshaw said the financial crisis of 2008 accelerated the move of midmarket companies from capex spending on IT to opex spending as they sought to compete with enterprise companies without investing in infrastructure. That meant that IBM had to change its plans, too, in terms of targeting these companies. MSPs made sense as the right way to market to ultimately serve these midmarket companies more focused on opex than capex.

One of IBM’s initial PureSystems MSP partners is Symmetry Corp, a certified SAP hosting and cloud partner. IBM and Symmetry have teamed up to deliver IBM’s multidimensional Troy solution, which merges Windows/ Linux and iSeries into a single hybrid framework.

Monshaw said IBM is making partnership attractive to MSPs, including paying 75 cents on the dollar to generate demand for service provider offerings. The challenge for IBM in working with MSPs is that “we don’t know the MSPs as well as some of the competitors do,” said Monshaw.

Monshaw said that IBM is on boarding about 100 MSPs per month. He pointed to IBM’s most recent release, PureSystems, targeted to MSPs as a hosting platform which is designed to be an infrastructure-in-a-box offering that combines everything from hardware to software to power management in one package for a price starting at $100,000. Monshaw said the technology is “resonating extremely well with MSPs” and that one of its attributes is time to value — how quickly MSPs can deploy it and start generating income.

Monshaw said the offering is targeted especially to IBM Tier 1 MSP partners that need more than white box servers to host their offerings. Monshaw says IBM looks at MSP size and the types of applications they are offering to customers. Tier 1 MSPs get one-to-one IBM coverage plus access to systems architects and services architects.  Monshaw expects about 100 MSPs to fit this profile, and then IBM will be looking for thousands who fit in with the Tier 2 profile, MSPs that will have both an IBM and distributor relationship.  IBM expects to be working with thousands of MSPs across all tiers.

What’s next for IBM in the MSP space? We’ll be staying in close touch with IBM executives. Stay tuned for updates.