IBM builds second tier model to reach to SMB segment

Computing heavyweight builds a second tier to its channel model as it strives to reach the elusive small to medium business segment.

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By  Greg Wilson Published  September 30, 2001

High-end accounts have never been a real problem area for IBM. The small-to-medium business (SMBs) segment, on the other hand, has always proved elusive for the computing heavyweight.

But with the revenues slowing from the high-end, high-margin accounts, the SMB market is assuming greater strategic importance for Big Blue.

At the local level, IBM partners Gulf Business Machines (GBM) and Saudi Business Machines (SBM) have tackled high-end customers in the region, but have faced challenges when attempting to break into accounts lower down the value chain.

“We have to get to the small businesses and explain the real message… we sell NT servers from $700 and also cover the full range, all the way up multimillion dollar systems,” says Farid Metwaly, general manager, Middle East & Pakistan, IBM.

“We’re challenged by the ability to explain the sheer size and depth of our product portfolio,” he adds.

Metwaly is promising that Big Blue and its partners will be more aggressive in both the consumer and SMB segments. Key to success in both areas is the need to breakdown the perception that IBM is expensive and that “only large customers can afford our solutions” says Metwaly.

But restructured pricing alone isn’t going to be enough to get close to the low-end market. Consequently, IBM is planning to build a second tier to its distribution model to deliver a focused service on the SMB segment.

The second tier conduct training among the user community and “communicate and explain the real message and strength of IBM,” says Metwaly.

Since putting in a team focused on the small-to-medium space, SBM has enjoyed considerable success, says Metwaly. The Saudi-based partner has deployed a call centre and built several partnerships with value added resellers in the local market to offer ‘solutions.’

SMB has also been going to market through online mall AlJuffali.com. “We’ve had good progress in the Saudi market… but not in the Gulf yet. We are working on this.”

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