IBM Sales Reorganization Targets SMB Market

IBM Corp. is revamping part of its sales organization to better target the small-to-medium-sized business (SMB) market.

IBM is realigning its Systems and Technology Group (STG), creating one sales group to sell to large enterprise customers and another to sell to SMBs, business customers with no more than 1,000 employees. It will also better integrate STG with IBM's Global Technology Service (GTS) group and with companies in its Global Business Partners Organization, and design products specifically for the needs of SMBs. The changes were outlined in a memo released Thursday by William Zeitler, IBM's senior vice president and group executive of STG.

A new level of sales management will be created within each of 220 geographic sales territories IBM operates globally. The new SMB Systems Sales Manager in each territory will focus solely on SMB sales efforts.

IBM named Ross Mauri to head a new Power Systems unit within STG selling high-end System p and System i products to enterprises, and named Marc Dupaquier to run the new Business Systems unit selling low-end System i and p products to SMBs.

IBM is making the changes to boost its market share in the US$32 billion market, based on 2006 sales, for IT systems for SMBs, said Alex Gogh vice president of channels marketing for STG. IBM's share of the SMB system market was just 15 percent, half of what it is for the overall systems market.

"This is a reaction to the marketplace opportunity and a recognition of how large the SMB market opportunity is," said Gogh.

The SMB Systems Sales Manager positions are being created to offer just one level of IBM sales management to work with partners to sell to SMBs, not one manager for each of many different product lines, said Bob Samson [cq], vice president of worldwide systems sales for STG. The partners are usually system integrators or independent software vendors.

"[Before], a partner had to go to five different IBM people in a territory. Now they just have one," Samson said.

The sales reorganization coincides with the introduction of new products designed to appeal to SMBs, including blade servers, he said. IBM announced June 13 the coming BladeCenter S system that is packaged to include server, storage, input-output connections to a network and software integrated into a single chassis. IBM said it plans to begin shipping the product in the fourth quarter.

With new products and the sales reorganization, IBM hopes to build on the momentum created from Wednesday's announcement of the best quarterly financial performance the company has recorded in six years. For the second quarter of fiscal 2007, ending June 30, IBM reported net income rose 11.8 percent to US$2.3 billion on a 9 percent revenue gain to $23.8 billion, compared to the same quarter of 2006. Earnings per share (EPS) grew 19 percent to $1.55, over the year ago quarter.