IBM partners with ISVs to focus on vertical industries

The next time you sit down with the sales team from your preferred independent software vendor, one of the reps across the table from you might proffer an IBM business card.  At its recent PartnerWorld 2004 event, IBM announced a massive ISV partnership effort that should be very good for an IT or business executive charged with implementing a new industry-specific business application.

In its biggest shift in more than five years, IBM is stirring up its whole business model to focus on industry vertical solutions.  The company is realigning how it partners and goes to market with ISVs to leverage business insight and technology expertise in very specific industries. 

But ISVs aren’t the only people in the IBM solutions chain that are being dropped into specific-industry buckets.  The company is training 13,000 of its salespeople, implanting them with more in-depth knowledge about the industries they are assigned to.  Add this to the 60,000-plus business process consultants that joined IBM during the PriceWaterhouseCoopers acquisition a few years ago, and you have some very knowledgeable people in a given business area.  Taking it over the top are the IBM researchers who have the ability to apply research principles to resolve problems.  For instance, researchers apply mathematical algorithms to optimize flight schedules for airlines.

Some call it IBM’s new “vertical vision.”  It’s the recognition that there are challenging business environments that differ industry by industry.  So everyone in the company is being swizzled around to align to a dozen or so industries, such as healthcare, government, life sciences, financial markets, retail, banking, aerospace and defense, automotive, telecom and electronics. 

This can only be a good thing for the line of business manager who wants to talk to a technology solution provider about his very explicit business challenges and needs.  It vastly increases the chances that the business manager is talking to someone who speaks his language and has relevant industry knowledge and experience.

Beyond the people expertise, IBM is assembling the technology expertise, whether it is home grown or comes from partners.  Through what it calls PartnerWorld Industry Networks, IBM is encouraging ISVs to work with IBM and with each other to create and extend reusable solution blueprints.  The idea is that a solution that works well for one financial institution can be the blueprint for a similar solution for another customer.  Hardware and software components may change, of course, but because the solutions are all built on open standards, building the final result is quicker and more cost effective.  Plus, what is learned from one project is applied toward the next one, and the one after that.

IBM isn’t unique in taking this vertical industry solution approach.  Other companies are adopting the model, too, but IBM has more clout behind it.  Very few companies can bring to the table as rich a portfolio as IBM, with a worldwide sales force, a $5 billion a year R&D budget, a range of business hardware and middleware, a vast partner network, and a respected business consulting practice.

So the next time you sit down with your IBM rep, he may not talk about servers or operating systems at all.  Instead, he’ll talk about how to solve that troubling manufacturing process, or how to speed up point-of-sale transactions, or how best to keep patients’ records private – whatever your concern is.  Don’t hold back on telling him about the business problems that keep you up at night, because he’ll be better equipped to assemble the A-team that can help you rest easier.

Linda Musthaler is vice president of Currid & Company.  You can write to her at mailto:Linda.Musthaler@currid.com