Last week we had an interesting call with Andy Monshaw who is the general manager of IBM Global Midmarket Business. He is responsible for leading IBM’s company-wide focus on expanding sales to mid-sized companies and working with IBM’s Business Partner ecosystem to deliver innovation to this key market segment. These were the issues that we discussed:

What is the Strategy of IBM and how does this affect MSPs?

• IBM’s MSP strategy is aligned to the rapid growth of cloud based delivery within the SMB space.  As more and more of our clients are looking for off-premise based solutions and turning to local hosting providers, our goal is to ensure that these providers are enabled to deliver an outstanding experience for their clients.  
• Specifically, our strategy revolves around two key areas.   First, we are working with MSPs to enable their infrastructure on IBM so that they can provide a reliable, robust, secure and scalable hosting environment to their clients.  Second, we are engaged with the  MSPs in helping them to build out the value of their hosting environment.  Specifically, we are helping to bring the right ISVs to their platforms to allow them to serve the needs of their clients.
  

What do you think are the challenges for MSPs in 2012?

• The challenge for MSPs are many.  Within the SMB space, we know, based on the IBM Midmarket Trends and Directions Study and our CIO Study, that 50% of SMBs will be shifting their spend to cloud.  As a result of these intentions, MSPs will need to ensure that they can meet the needs of these companies with both scalable, secure IT environments and a suite of offerings that meet the needs of these customers.  Specifically, MSPs will need to ensure that they can deliver the same levels of reliability and security that customers have been receiving with their “on premise” solutions.  They will need an IT infrastructure that is reliable, scales quickly with volume increases and provides the right levels of security to give their customers piece of mind.
• IBM is committed to helping MSPs in both of these areas.  Of course we will give them access to the IBM solutions that will ensure that their infrastructure meets the needs of their customers but, we are also committed to bringing MSPs and ISVs together to ensure that the solutions available through their infrastructure meet the needs of small and medium businesses.  Everything from CRM, to Security and Analytic solutions need to be available to SMBs and we are committed to bringing the applications together with the MSP on behalf of our customers.
• The focus on this space is driven by the marketplace shift to cloud delivery models. As revealed in the Midmarket IT trends and Directions Study and the CIO Study conducted earlier this year by IBM, more than 50 percent of the Midmarket IT spend is shifting to cloud based models.  We want to ensure that our customers can exploit this opportunity with MSPs and Business Partners who can deliver a secure and scalable solution that meets their needs.
  

How does IBM help MSPs in reaching their objectives and in developing their business?

• IBM is helping MSPs on several levels.  First, we are helping to ensure that the infrastructure on which they built their hosting platforms is reliable and secure.  We are bringing our best hardware, software and services to these companies to ensure that the environments that they provide for their customers is as reliable (if not more so) than the current “on-premise” environment that the SMB customer is working with.  We also enable MSPs to deliver an infrastructure that is scalable and can grow cost effectively with the increased demands on capacity that they encounter.  In some cases, if an MSP so chooses, we will even host their environment for them through our own cloud offerings.
• Secondly, we are working to bring the many ISV and application providers that we work with on an ongoing basis, together with the MSP so that the MSP can offer a truly robust set of applications and solutions to their customer, meeting the demand for a variety of solutions and offerings based on the individual business needs of each end-user.  We are working to assist with application posting, with service and support and with ongoing application integration, to ensure that the end-user requirements are met and satisfied.
  All of this is designed to help the MSPs grow their business in a profitable, cost effective manner.
•  IBM is making the investment for business partners to take advantage of this industry movement around cloud adoption  – a market opportunity that will grow from $96B in 2011 to $219B in 2015.  IBM brings an unique value to business partners in building innovative cloud solutions for clients globally.  Business partners are playing a key role in our growth strategy and 2015 roadmap.
  

What type of support do you give to new MSPs who wish to use applications developed by IBM?

• We are taking the ISV applications and surrounding them with additional IBM value to provide a more holistic solution for the end customer.  By enabling the MSPs and the applications that they deliver with technologies such as analytics, security and collaboration enable the end user to ensure that they are getting the right analytics out of their IT and that their data remains secure and reliable.  
• IBM offers a host of hardware, software and services solutions that can a) make the MSPs IT environment secure, reliable and robust for their end-user customers b) add value on top of the ISV applications enabling customer to get more productivity, data and analytics our of their investments and c) services and support that can make the delivery of cloud-based solutions more effective for end-users and more profitable for the MSP.  In addition, IBM can offer MSPs Smart Cloud Enterprise as an alternative to building their own hosting environment, as well as access to additional ISVs and applications to make their offering more robust.