IBM Spices Up SaaS Channel Incentives

IBM (NYSE: IBM) is pushing its business partners to more heavily promote its software-as-a-service (SaaS) initiative by offering new sales and marketing incentives.

Channel partners will receive a 10 percent referral fee for each lead that turns into a sale. IBM will also make its sales force more accessible to partners to help them close opportunities faster.

IBM's "Software as Services Showcase" initiative, which was launched eight months ago, functions much like an online directory, allowing customers to search for ISV (independent software vendor) solutions that are delivered over the Internet through IBM's open technology infrastructure and its hosting services support.

Some 100 partners are participants in the initiative, IBM said. Most recently, Apptix, Success Factors and Corente joined.

SaaS Growth

IBM's announcement represents two separate trends that are increasingly merging in the CRM industry: the growth of SaaS, and vendors' growing reliance on reseller and partner channels to make further inroads into the market.

Over the last five years, the popularity of Internet-based software delivery -- exemplified in the CRM industry by such pure plays as Salesforce.com (NYSE: CRM), NetSuite, Salesnet and RightNow -- has grown significantly.

At the same time, ISVs are offering similar applications over the Internet -- usually for vertical industries -- based on IBM's platform.

More than 78 percent of 500 respondents across major vertical industries and company sizes are currently using or considering software-as-a-service, found AMR Research's 2005 Software-as-a-Service syndicated research study.

As competition grows, providers of these services are relying ever more on the reseller and software channel to pull in sales, IDC analyst Ray Boggs told CRM Buyer.

"Vendors have been placing big bets on channel partners in the SMB space," he said, "recruiting, retraining and even helping to coordinate among them."

Marketing Support

IBM is providing its reseller channel with marketing support as well. It points to San Mateo, Calif.-based Success Factors, provider of an on-demand talent management application, which leveraged IBM's direct mail, telemarketing and advertising services to generate more than 800 sales leads in less than a year.

"Partnering with IBM has allowed us to reach a larger and more varied ... audience than we would have been able to reach on our own," said Roger Goulard, vice president of alliances, Success Factors. "The technical, marketing and sales resources provided by IBM have also allowed us to maximize our reach to newer markets."

Other new resources include IBM hosted Web seminars for demand generation, discounted advertising for ISVs in industry publications, and lead generation services and white papers from IBM experts.

The company will also connect an ISV with an IBM local software-as-a-service sales expert to help the ISV close the deal .