Divide, divide, divide and conquer

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26 March 2018 | 0

Billy MacInnes“We invest $80 million per year in our co-marketing programme, with over 25,000 partners globally, leveraging this with 12,000 marketing programmes that generate $4 billion in pipeline.”

I read that statement, by IBM general manager of global business partners, John Teltsch in a story on this website headlined How IBM is charging its partner tune and I thought, to use a phrase that fell out of favour years ago: “What a way to run a railroad.”

Let’s just break it down a bit. Start with the cash: $80 million a year. That sounds like a lot of money because it is a lot of money. To you and me. Not so much to other people. For example, a company of IBM’s size, with annual turnover of $79 billion.

Next, let’s go to the partner numbers. Again, 25,000 sounds like an awful lot, just like the $80 million. But when you spread $80 million across 25,000, it doesn’t seem as big as it first appeared, coming in at $3,125 per partner. That’s still not to be sniffed at, but given that bigger partners will probably get quite a bit more than that and smaller ones will get quite a bit less, it’s not that spectacular.

On to the marketing programmes: 12,000! Really? That’s a humungous number. Just think of the administration and management that goes into running 12,000 marketing programmes. Look at those partner numbers again and put them next to the number of marketing programmes and wonder how IBM is in a position where it has close to one marketing programme for every two partners.

Admittedly, that $4 billion in the pipeline looks impressive and it translates to exactly $333,333.33 per programme. Again, though, some will probably be a lot higher than that and others a lot lower, so you have to wonder whether the lower value programmes are worth persevering with.

The good news, according to Teltsch, is that IBM has “made great strides in reducing this complexity” over the past six months. He doesn’t specify whether reducing the complexity has brought it to the point where it now has only 12,000 marketing programmes or whether that’s the complexity which has been reduced. I sincerely hope it’s the latter, otherwise it suggests things were really complex before.

I’m inclined to go with the latter because in the same story, we also learn that IBM has reduced its number of software programme incentives from 100 to five categories.

When you look at the numbers I quoted at the start of this article, you could be forgiven for wondering whether people at IBM have been getting incentives to create marketing programmes rather than sell stuff.

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