IBM Promises Faster Bid Approval Amid Price War With Dell

IBM's top U.S. channel executive said a price war with Dell prompted changes in its bid certification and pricing in order to speed price quotes for competitive Intel server bids.

May 12, 2005

2 Min Read
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IBM on Thursday acknowledged that it's in a price war with Dell and promised new xSeries incentives and a quicker turnaround in bid certification and price quotes by the end of the month.

The Armonk, N.Y.-based IT giant also plans to expand its bid certification program to cover lower-end xSeries servers, including blades.

"In the last four months, we've seen a price war from Dell. One thing I believe you need is the best price fast," Towney Kennard, IBM's vice president of Americas Business Partners, told solution providers at distributor Arrow Electronics' Support Net May Days conference in Indianapolis.

The challenge for IBM is to meet Dell's pricing while preserving partner margins, Kennard said. Partners attending the event complained that it often takes up to three days to get special pricing approved by IBM.

"That's not competitive. I'm going to fix that," Kennard said. "You can bet the ranch that we'll have a new way to do special bids, and I'm hoping that I can fix that by the end of the month. I have to be as fast as the market dictates, which is 24 to 48 hours."IBM likely will add more xSeries products to its bid certification program beyond the high-end xSeries models already included in the plan, which awards only one partner in a deal the full discount on IBM products, according to Kennard. Bid certification is designed to preserve margins for the IBM partner that developed the opportunity by preventing other VARs from winning the business with an 11th hour low bid.

"We will probably add more products [to the program], particularly blades in Linux," Kennard said. Yet some partners questioned whether bid certification is the right approach, especially in the blade server market.

"I need to get to the customer quickly, and if I have to go to a bid cert, that's going to take a long time," said Margie Garza-Carlson, president of Alliance Technology Solutions, an IBM Business Partner in Auburn Hills, Mich. Bid certification--particularly with long-time customers--will complicate the process, and a partner risks losing blade customers to Hewlett-Packard or Dell, she said.

Small IBM Business Partners often lose out on getting certified in an account even though they originated an opportunity, because other IBM partners are better at "creative writing" in documenting that they developed the business, Garza-Carlson added. "That takes money out of our pockets," she said.

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