IBM Thinks Small, as in SMB, with Reorg

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I've blogged before about the inability of many big tech vendors to successfully sell their products and services to SMBs.


Commenting on Oracle as a potential competitor, an executive from Sage Software said that many large vendors simply "don't bring the right mix of products and services at the right price delivered by the right types of people."


This gets to the heart of the problem. Vendors understandably want to leverage the considerable investments they've made in existing business processes, from product development to sales and support. But making only minor tweaks to processes geared to the needs of big enterprises can turn off both channel partners that sell to SMBs and their potential customers.


Take IBM. Despite some hyperbolic statements by CEO Sam Palmisano and changes in its sales structure, IBM's star has been falling among the channel partners that promote its products to SMBs. According to a CRN poll, the number of companies certified to sell IBM gear dropped 9 percent in 2006.


So now IBM is making a more dramatic adjustment to its Systems and Technology Group, reconfiguring it so it focuses more on specific customer segments and less on individual products, according to an Associated Press story published on Newsvine.


As noted by CNET blogger Gordon Haff, the four new customer segments are: large enterprises, SMBs, customers buying IBM's specialized chips, and verticals with special needs such as health care and retail.


Haff sees both positives and negatives to this approach. While it will give customers a more consistent view of IBM, it could mean that SMBs miss being exposed to new product-centric ideas and innovations.