IBM aims to bolster partnerships amid weak economy

NEW YORK (Reuters) - IBM said on Tuesday it is seeking to bolster sales partnerships to boost revenue in a weak economy and compete more effectively with other large technology firms.

International Business Machines Corp, which sells computer servers as well as software and technology services, said that more cooperation among equipment and software vendors can help corporate customers invest in technology more efficiently, such as by preventing the duplication of hardware.

Rivals like computing and software maker Hewlett-Packard Co and network equipment maker Cisco Systems Inc have also announced myriad partnerships in recent months, from licensing deals to stronger sales tie-ups to offer clients more comprehensive, "one-stop shop"-like services.

"Clients' needs are clear: save money, preserve capital and reduce costs," Chief Executive Officer Sam Palmisano said in a speech to the company's business partners. "With your partnership, we help them do that ... You are critical to IBM's success."

Around 30 percent of IBM's sales go through its 100,000 channel partners, who help sell the company's hardware and software. In many cases the relationship is mutual, with IBM helping to sell its partners' products.

Rich Hume, general manager of IBM's global business partner organization, said the company is seeking to expand such partnerships. He also announced on Tuesday that IBM is launching new social networking sites so partners can discuss and develop better products for their mutual customers.

IBM has been changing its policy to give partners more incentives to help sell its products. This year, it has allowed partners who sell IBM products to earn rewards right away, rather than after meeting specific sales targets.

It has also expanded its financing options through the company's global leasing and financing unit. Hume said such incentives benefit partners which earn finders' fees by selling IBM products to new customers.

"All of this has been primarily in response to the fact that things are slow. We have to have our customers continue to invest in IBM," he told Reuters.

Sources told Reuters late last month that IBM was in talks with network equipment maker Juniper Networks Inc for an OEM or original equipment manufacturer deal, in which IBM would resell Juniper equipment as part of its own family of products.

IBM has already announced an OEM deal with Brocade Communications Systems Inc, which makes data storage and other network equipment.

(Reporting by Ritsuko Ando, editing by Gerald E. McCormick)