IBM's sales modus operandi is predicated on two things: confusion and fear. The vendor confuses customers with dozens of acronyms and hundreds of SKUs and scares them by threatening audits and providing contracts without protections.
The company recently increased standard renewal uplifts from 5% to 10%, and eliminated Relationship Suggested Volume Pricing (RSVP) on most of its SKUs, leading to price hikes of up to 20% -- and long-recurring costs for often unneeded product.
Common pain points for customer in their dealings with IBM fall into three main buckets: (1) alignment, due to the large IBM product sets, which involve large numbers of stakeholders; (2) understanding the risks and rights in the IBM contract, especially with regards to renewal rights, the product catalog, and their audit rules; and (3) understanding their existing inventory and usage – many customers complain that the vendor’s ILMT (designed to help with software asset management) does not work.
Because the IBM portfolio is so complex and well-entrenched, and because IBM uses a highly-organized sales process that consistently forces you to buy more than you need, it is essential to start early on IBM deals and adhere to a proven deal plan, show below.
To compete effectively with IBM, customers are advised to focus extra attention and spend ample time on the action items in the second column, “Risk and Inspection”, because this is where the costliest mistakes can happen. The better you complete these steps, the better equipped you will be to achieve your desired outcomes.
ClearEdge has developed a series of tools that help guide clients through this process. Using our newly created ClearEdge Portal – a secure client communication platform that delivers assistance and educational content -- we created a client timeline for an upcoming deal with IBM, shown here.
In response to client needs, ClearEdge has developed a series of vendor-specific deal preparation tools and checklists, which can be viewed within the new Client Portal here.
To fine-tune your leverage with IBM before your next purchase or renewal, watch our recorded webinar from the 2021 ITDM Summit that further details the IBM sales strategy and provides a recent case study, or contact your ClearEdge representative.
- Rachel Annello is a Senior Analyst at ClearEdge Partners.