System iNetwork

April 21, 2008

VIP Doing Well, IBM Expanding, Seeding the Next Season of i?

Like most technology firms, IBM wants a bigger piece of the $50 billion systems and storage SMB marketplace, and one of IBM's most ambitious -- and perhaps successful -- programs is the company's Vertical Industry Program (VIP). The effort is a strategy that identifies business niches where customers need quality IT solutions but don't typically have big budgets for IT staff. With VIP, IBM identifies the niches and connects software solution providers with IBM hardware-selling partners.

Launched as a test pilot for the IBM System i in 2007, the VIP program has exceeded all expectations, IBM says. In 14 months the program generated nearly $500 million and attracted more than 750 specialized business partners who are delivering business solutions for 120-plus sub-industries across 20 countries, IBM says.

Expansion on the Way

Because of VIP's success and increased market demand, IBM says it's expanding the program to support a broader range of industries and platforms including IBM Power Systems, BladeCenter, System Storage, and System x servers. This move is not unexpected. First, although we heard mostly about the System i-focused VIP program, IBM had parallel efforts working with System p.

In addition, once the concept was proven, who wouldn't expect IBM to look to expand it with its other hardware? If IBM could identify a niche and an application solution provider who could fill that niche, it would try to become the preferred hardware provider to take over that niche.

Now, the VIP program includes more than 160 sub-industries spanning 40 countries.

For small SMB-selling IBM Business Partners, the VIP program can be a huge boon -- they get IBM co-marketing activities, sales support, and stronger connections with other IBM Partners who specialize in the same industry. Through the program, customers see complementary solutions and locally based skills -- which hopefully will help i on Power flourish because it may make an unfamiliar operating system seem less risky to customers with limited IT staff members in the first place.

Great i VIP Examples

As part of the System i-focused VIP program, IBM has released three examples of partners and customers put together through the VIP program:

• Australian Business Partner, SEMD Business Solutions, enhanced its business pipeline more than 80 percent by integrating its Dealerpac software with IBM platforms and co-marketing into specialized industry segments such as automotive and farm machinery sales and chemical distribution, IBM reports.

  "Over the course of two decades, we haven't seen a single compelling reason to use any other platform than IBM Systems," notes Stephen Gough, managing director of SEMD. With the introduction of VIP, SEMD has grown its business across those sub-industries beyond expectations and has helped to grow its customers' businesses, as well. For example, Harley City -- a Harley Davidson dealership in Melbourne, Australia -- has tripled its growth with SEMD and VIP while keeping administration costs to exactly the same level.

  "Harley City has been able to maintain a competitive edge against the larger motorcycle chains in the local area. Without VIP and without reliable, simple, cost-effective systems to maintain, we would not have been able to keep that edge," notes David Reidie, CEO of Harley City.

• Sanmarco Informatica Spa is an Italian VIP partner that has achieved more than 2,000 customer installations working with IBM and is now growing globally. The company's Galileo Enterprise Resource Planning (ERP) solutions are designed for the manufacturing, wine, food, building, fashion, furnishing, wood flooring, and commercial sectors, IBM reports. Through VIP, Sanmarco has implemented an improved marketing strategy and delivered customers a simplified, centralized solution on IBM Systems.

  "Last year, working with IBM and VIP, we doubled our business," notes Michele Romano, marketing manager for Sanmarco Informatica. "Our applications' high level of security combined with the industry-leading features of IBM Systems make an ideal solution for automating processes and services, especially in manufacturing companies with international operations."

  Sanmarco customer Zonin wine makers runs 11 wine estates covering more than 3,700 acres in northern Italy. "Working with IBM and Sanmarco through VIP, we have been able to analyze the sale of every single bottle of wine to determine how best to optimize our sales and marketing strategy as we move forward. This has given us a considerable advantage in the competitive wine market and has helped us run a successful business from the vineyard to the glass," reports Francisco Zonin, vice president of Zonin.
  
  

• Xperia Solutions is an Allentown, Pennsylvania-based enterprise apparel solutions provider and IBM VIP partner, offering solutions and services that help customers plan and manage their production and sourcing operations, supply chain activities, and customer-service business practices. Through VIP, Xperia has been able to offer integrated solutions that propel its customers' businesses forward, IBM reports.

  "Xperia's apparel-specific industry solutions focus and the integrated nature of VIP allow us to address key critical business challenges facing companies in today's apparel marketplace," notes Gene Bonett, president and CEO of Xperia.

  One of Xperia's customers, Modern Shoe Company, an importer and wholesaler of women's fashion footwear, has enjoyed a phenomenal growth curve since its inception in early 2006. Without adding a single employee to its cast of nine, Modern Shoe's business has increased more than 250 percent in the past year to become a $50 million-plus business, IBM says.

  "With IBM Systems and services from Xperia, we've been able to streamline our business processes and utilize applications designed specifically for the apparel industry," reports Roger Monks, COO of Modern Shoe. "We've grown our business to unprecedented levels, and the combination of Xperia and IBM provides us with a stable platform to support and continue this growth in the coming months and years."
  

Next Generation of i Pros?

These smaller companies that are investing in i-based solutions now may form the backbone for the next set of i-focused jobs. They'll obviously need to become bigger businesses that require customization or integration, of course, and only time will tell.

Posted by cmaxcer at April 21, 2008 9:10 AM