IBM Goes After Dell, HP With SystemSeller Program

IBM is becoming more price-competitive, with a new program aimed at partners selling servers and storage to midmarket customers.

March 1, 2005

2 Min Read
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IBM is aiming to get more price competitive against Dell and Hewlett Packard with a new SystemSeller program targeted at partners selling servers and storage to midmarket customers.

The new program, announced Monday at PartnerWorld in Las Vegas, will provide IBM partners with more aggressively priced, preconfigured eServer and TotalStorage offerings for price-conscious, midmarket customers. To be formally launched April 1, the program will comprise 20 to 30 models, including IBM xSeries servers and Blade Center models, IBM OpenPower Linux systems and IBM TotalStorage disk and tape products, said Elaine Lennox, vice president of SMB Systems and Technology Group for IBM.

"We will monitor prices every week and in some cases every day against the competition," said Lennox. IBM plans to back the program with $100 million to fund demand-generating efforts for the new SystemSeller models being sold by IBM partners, she said.

Susan Whitney, general manager of eServer X Series, said the new program is designed to make IBM more competitive against Dell and Hewlett Packard. "This is designed to be price-competitive with all our tier one competitors at units of one," said Whitney.

John Paget, the president of North America and COO of IBM distribution partner Synnex, applauded the new IBM offering. "The concept of bringing a set of a few industry standard SKUs to market makes a lot of sense for the manufacturer, reseller and distribution. " The success of the new program, however, will depend on how well the preconfigured products meet customer requirements, cautioned Paget.IBM also plans to offer IBM Global Financing initiatives under the program as a tool for partners to increase midmarket sales, said Lennox.

IBM plans to expand the program by adding printing systems to the mix by the end of June, said Lennox. In the second half of the year, IBM will add software products, she said.

One of the keys to the program is the $100 million being spent to help drive demand to partners, said Lennox. She said that only partners that have signed up for SystemSeller will receive leads and other demand generation assistance.

The SystemSeller initiative builds upon IBM's Express initiative, which is aimed at providing selected, aggressively priced SKUs for midmarket customers. The company currently has 70 Express offerings that include hardware, software and services SKUs, said Lennox. "The Express offerings have made a huge difference in driving our midmarket growth rates," she said. "Compared to our competitors, we are much further ahead in this midmarket space."

The SystemSeller plan should significantly increase partner profitability by reducing special bid situations that require forms to be filled out for rebates, said Lennox. "This really helps partners with operational expenses," she said. "They know the margin and don't have to fill out any paperwork."0

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