Paul DeGroot knows more about Microsoft licensing than nearly anyone, including most people at Microsoft itself.
DeGroot formerly an analyst with Directions on Microsoft and now off on his own at PIca Communications, details in SearchITChannel.com how Microsoft is taking more of its volume licensing deals direct, It is certainly not alone in that. Every major software company from Oracle to Symantec is in the same boat. They’re locking down volume licenses directly and most of them are taking all the revenue from renewals and maintenance on licenses direct as well. Two new online services, Microsoft InTune and Office 365, DeGroot writes, replicate much EA functionality and will also be sold/billed directly by Microsoft.
Of course all of this is worrisome to a cadre of Large Account Resellers (LARs.) These were companies like the old Corporate Software, Software Spectrum, Egghead Corporate & Government, Softmart, Software House International etc. which used to handle volume licensing for all the major vendors for big customers.
Many of these LARs have merged and combined with each other or simply went away as more customers started downloading their software direct. Software House International is still fighting the good fight. Direct marketer CDW remains a LAR as does Insight (which bought Software Spectrum which had already merged with Corporate Software or something like that.) Dell is a LAR by virtue of its purchase of ASAP Software. You get the picture.
Since the advent of near-ubiquitous broadband and easy downloads, it was natural that customers get their software delivered that way–straight from the vendor. Of course that imperils the traditional business model of LARs. In the case of MIcrosoft, LARs were a subset of Microsoft partners able to sell volume licenses. When software was delivered in shrink-wrap boxes (or even by disks) there was a model. Not so much anymore.
LARs were able to sell the fact that they could help customers manage multiple volume licenses from multiple vendors. And given the complexity of software licensing, many companies see the attraction in that. A friend of mine has a full time job tracking and monitoring software licensing and pricing for his bank. He attests that 95% of his time is now spent on watching one vendor alone–Oracle. He clearly would welcome trustworthy help keeping vendors honest.
The vendors are always trying to sell him more licenses than he need or are auditing the bank to make sure it’s not using more software than it has the rights for. Monitoring licenses is a full time responsibility, he said. He would also welcome expert advice on when to forego vs. sign on to new Enterprise Agreements. It’s not immediately clear why, with Windows 7 still not fully deployed and now compelling software releases on the horizon for the next two years, why his bank should even sign up for a new EA, other than to stay legal, that is.
So, while some might argue that LARs are outmoded, a LAR that works for the customer’s best interest (vs. pushing as much software as the customer can stand) represents a real value-add.
Check out more IT channel news on SearchITChannel.com.
Leo Apotheker, who proved somewhat, um, elusive, during the first weeks of his stint as Hewlett-Packard CEO, will speak at HP’s Americas Partner Conference (APC) in late April. This was no gimme. There was considerable speculation whether he’d be there. But the APC invites are out and Leo will speak March 28 opening day, along with HP channel chief Stephen DiFranco.
Apotheker was named HP’s CEO in October after HP went through a very public and very messy divorce from former star CEO Mark Hurd. Then, Hurd surfaced as co-president of Oracle, an erstwhile HP partner and HP hired Apotheker, a former CEO of SAP. SAP, which leads the ERP market, is the arch nemesis of Oracle and all sorts of soap opera-level skullduggery ensued, most revolving around public threats by Oracle CEO Larry Ellison subpoena Apotheker in a lawsuit Oracle lodged against SAP.
Leo, however, was nowhere to be found. And HP partners worried about the silence from HP’s new top dog. Mark Hurd, for all his faults, had been very hands-on with HP partners. Now, Apotheker can try to assuage any doubts partners might have about the channel-friendliness of his HP.
I recently reported that desktop virtualization progressed less rapidly in 2010 than technology solution providers expected just one year ago. Now, CDW has released the results of an end-user survey exploring what will get midsize and larger businesses to move forward with at least one form of client virtualization. As you might expect, cost reduction will be significant for at least 91 percent of those businesses that are planning a client virtualization project. But, apparently, many people are having trouble figuring out how to adequately calculate the real return on investment associated with these projects.
Here’s the news, posted today.
“As a result of this combination, all product integration and development, pre-sales and support now falls under the reorganized VCE. All VCE-certified solutions are delivered and supported as a single integrated offering with one VCE point of contact for support. The Acadia brand has been retired as a result of this combination and rebrand.”
VCE VARs hope the new entity will iron out channel conflict they’ve seen with some of the VCE parent sales forces. (The original VCE Coalition was launched in November 2009 by Cisco, EMC and VMware.)
Check out more IT channel news on SearchITChannel.com.
Looks like I should have waited a couple more days before filing my post last week about Gartner’s 2011 IT spending predictions. That’s because Forrester Research has just made its own proclamation about the market, looking for even higher rates of growth. Continued »
Bob Muglia, the Microsoft exec who helped build Microsoft’s Server & Tools business into a strong competitor in databases and server OSes and most recently took command of the cloud computing effort, will leave the company this summer.
CEO Steve Ballmer informed employees of this rather big piece of news in a posting today.
“Bob Muglia and I have been talking about the overall business and what is needed to accelerate our growth. In this context, I have decided that now is the time to put new leadership in place for STB. This is simply recognition that all businesses go through cycles and need new and different talent to manage through those cycles. Bob has been a phenomenal partner throughout this process, and he and his leadership team have the right strategy in place.
In conjunction with this leadership change, Bob has decided to leave Microsoft this summer. He will continue to actively run STB as I conduct an internal and external search for the new leader. Bob will onboard the new leader and will also complete additional projects for me.”
This news may unnerve die-hard Windows server loyalists as well as Wall Street, which has been critical of Ballmer’s stewardship of Microsoft. The departures of Robbie Bach, J. Allard, Ray Ozzie–all top tier executives–over the past year also raised eyebrows.
Muglia was often the public face of new server OS offerings, keynoting at TechEd and other Microsoft events.
It will be interesting if Muglia surfaces at another high-tech company. Bill Veghte, anohter highly-regarded Microsoft exec who left last year, is now at Hewlett-Packard, which is showing increased interest in software.
Check out more IT channel news on SearchITChannel.com.
What would a new year be without some sort of prediction about IT spending? The latest market research firm to oblige is Gartner, which is forecasting that worldwide IT spending will reach $3.6 trillion in 2011, up 5.1 percent from 2010.
That’s actually off slightly from the spending increase of 5.4 percent that Gartner has recorded for 2010, when IT spending reached $3.4 trillion. But it IS higher than the increase of 3.5 percent that the firm had originally predicted for this year. Here’s the rationale, according to a Gartner press release, and garnered from Richard Gordon, research vice president:
“Aided by favorable U.S. dollar exchange rates, global IT spending growth is expected to exceed 5 percent in 2010, but a similar level of growth in 2011 — while forecast — is far from certain, given continued macroeconomic uncertainty. … Nevertheless, as well as a fundamental enabler of cost reduction and cost optimization, investment in IT is seen increasingly as an important element in business growth strategies.”
Gartner believes that the main technology categories driving growth will be telecommunications equipment, where sales are expected to expand by 9.1 percent. Sales of mobile devices are another strong indicator that Gartner is watching closely.
Gartner has published a new report ranking the top 30 countries that are leaders when it comes to offshore capacity for IT services. You’ll find many of the usual suspects on the list and India is still No. 1, but the research firm has also identified new locations that are emerging as top players for offshore activities — because the cost structure in India is rising.
Here are some of the list highlights (I’m not including every country):
- Bangladesh, which is rated “very good” for cost structure
- China, which improved its scores for both political climate and cultural compatibility
- Indonesia, which carries an “excellent’ rating when it comes to costs but doesn’t do as well for its labor pool, which is rated “fair”
- Malaysia, which has especially good government support for green IT initiatives
- Sri Lanka, which comes back to the list after being off for three years
- Vietnam, which is especially attractive for the size of its young workforce
It is my belief that more U.S.-based IT services companies will be spreading their wings internationally in 2011, as businesses begin investing in IT infrastructure again and look for partners that can address their multinational needs. Seems like it would be good to know where you might experience the most competition — or where you might find the best local partners for your business.
I’ve been reporting two stories about technology trends for the past several weeks (a look-back and a look-forward) and one of the most recurrent themes that IT solution providers are bringing up proactively (as in, I haven’t asked a leading question) is mobility.
As in, you need to support it — with managed services and application development. I’ll be reporting on that more in those forthcoming stories for SearchITChannel.com, but meanwhile, market research firm IDC has just published a forecast for the worldwide mobile applications market.
According to its data, IDC believes the number of downloaded mobile applications will grow from 10.9 billion in 2010 to roughly 76.9 billion in 2014. The focus of those applications is myriad — ranging from smart phones to media tablets to (eventually) connected devices for the home, IDC predicts. The revenue for those applications will be a whopping $35 billion-plus by the end of the forecast timeframe.
In my opinion, this means two big things for the solution provider community:
- You need to look carefully at your managed services contracts to make sure they state what is and is not covered. Increasingly, you’ll need to support smartphones and tablets, even those that aren’t explicitly sanctioned by your clients’ own internal IT departments. Are your contracts priced to handle those devices?
- Make sure you are not missing the boast with respect to development services. Do you have people on your team who understand which mobile software platforms matter? Are you selling solutions that need a mobile element added? Have you even thought about this?