Channel Marker


May 25, 2012  3:27 PM

How much do you really want to rely on HP and Dell?



Posted by: Heather Clancy

Earnings reports from technology bellwethers Hewlett-Packard and Dell this week weren’t exactly confidence boosters. Both companies signalled lackluster IT spending as the cause for quarterly revenue declines, underscoring the need for technology solution providers to continue diversify their own revenue mixes — and vendor relationships — into software and services as quickly as possible.

Here are the numbers for quick reference.

HP recorded net revenue of $30.7 billion for the second fiscal quarter ended April 30, 2012, down 3 percent. Income was also off. Mind you, quarterly revenue of almost $31 billion is nothing to sneeze at, and these results were actually better than the company’s projections. And, astonishing, the company’s PC business managed to come in flat (with $9.5 billion in revenue). So, if you are OK with the status quo, you probably don’t mind.

Dell’s revenue for its first fiscal quarter was $14.4 billion, off 4 percent from the year-earlier period. The good news is that it realized increases for its services, server and networking businesses. The bad news for solution providers is that Dell continues to push its services agenda, which may or may not include them.

For me, there was another troubling question raised by this week’s earnings reports: How quickly can these companies make innovation pay off in their product lines as the technology market shifts?

These results make me wonder how well poised either company is to make it through the technology market overhaul that is being driven by mobile technology, the rise of purpose-built enterprise software applications such as Salesforce.com and the drive for analytics technologies that are easy for the line-of-business person to use — not a rocket scientist.

Exhibit A:  Yet again, HP is relying on a massive restructuring to hopefully get its financial house in order. (How many times have we seen this script in the last decade?) This time, it plans to cut about 27,000 jobs over the next two years. Mind you, it plans to plow the roughly $3 billion to $3.5 billion in estimated savings back into research and development for cloud computing and “big data” analytics technologies.

But I find myself wondering whether HP can innovate quickly enough to keep up with the flood of nimble startups focused on the same exact thing.

Sure, maybe it can buy its way into these markets, but HP’s history of integrating those technologies (WebOS anyone?) hasn’t exactly been stellar. What’s more, revenue for Autonomy, which HP spent $10.3 billion to buy last year, declined compared with when it was a standalone company. Whoops.

In any event, if I were a technology solution provider, I would be seriously evaluating just how much exposure I have to both HP and Dell.

There are major changes afoot in mobile form factor and software spending habits that don’t favor either of these companies right now. Sure, they may be great legacy businesses for technology solution providers for years to come, but is your company cultivating new relationships that will help your own company stay abreast of technology consumption habits?

Check out more IT channel news on SearchITChannel.com and follow us on Twitter! Here’s how to follow Heather Clancy directly.

May 18, 2012  3:16 AM

Diversity will drive tablet computer growth into 2017 (forecast)



Posted by: Heather Clancy
Android, Apple, Heather Clancy, IT channel products and services

Unit shipments of tablet computers should reach almost 425 million by 2017, driven by a diversifying range of product choices, according to a market forecast by DisplaySearch, an NPD Group company.

What’s more, annual tablet computer shipments should surpass those of notebook computers by 2016, the researcher suggests in its latest Tablet Quarterly report.

Over the next five years, DisplaySearch predicts that devices using the Apple iOS operating system will lose market share to tablets running various versions of Android and MIcrosoft Windows RT. By 2017, the Apple iOS platform should account for about 50.9 percent market share, compared with 40.5 percent for Android and 7.5 percent for Windows, the researcher writes.

One key factor will continue to be the Amazon Kindle Fire, which carries a lower price that is in part subsidized by content purchases.

DisplaySearch’s tablet OS forecast between now and 2017 is below:

Source: Q1 2012 NPD DisplaySearch Tablet Quarterly report

The takeaway for me is that any technology solution provider hoping to incorporate tablet computers into its solution mix will be dealing with the Apple iOS for some time to come. Things won’t seriously turn around until about five years from now.

Check out more IT channel news on SearchITChannel.com and follow us on Twitter! Here’s how to follow Heather Clancy directly.


May 11, 2012  3:41 AM

Annual SMB budgets now average $152,000 (survey)



Posted by: Heather Clancy
Heather Clancy, IT spending, SMB IT spending

Annual IT spending by small and midsize businesses now averages $152,000 per year, according to a bi-annual survey by Spiceworks. That’s up 6 percent from the second half of 2011, and 15 percent from early 2011, the data show.

The IT professional social network’s State of SMB IT survey reflects the opinions of close to 1,500 IT professionals, 60 percent of whom work for companies with 20 to 249 employees. Spiceworks conducts its survey two times per year.

In the second half of 2011, the average annual SMB IT budget was $143,000; during the first half it was $132,000, according to the Spiceworks survey data.

According to the latest survey conducted during the first quarter of 2012, the biggest chunk of spending will go towards new hardware, approximately 40 percent of the total. New desktops and laptops were the most commonly planned hardware purchases, the survey showed. IT services will account for approximately 26 percent of total spending, with the block of that money going to Web hosting and Internet service provider fees.

Check out more IT channel news on SearchITChannel.com and follow us on Twitter! Here’s how to follow Heather Clancy directly.


May 4, 2012  3:41 PM

Does CRM need to be social?



Posted by: Heather Clancy
Gartner, Heather Clancy, IT channel products and services, social business software, social CRM

In case you haven’t noticed, 2012 is the year in which businesses are supposed to get more social.

Collaboration solutions are getting a makeover, thanks to the help of social business software companies such as pioneer Jive Software. Customer service is getting more social, through applications from the likes of Lithium and Yammer. Marketing and public relations activities are being transformed through social media.

And, increasingly, people are starting to talk about so-called social CRM — technologies that more closely integrate all of the above with customer relationship management systems.

The big question for solution providers, both as an internal business strategy and as a consideration for their clients, is whether being social pays off.

This issue is something I follow pretty closely for one of my other blogs. Just this week, I reported that a new survey suggests that close to 60 percent of midsize and larger businesses are using social media as part of customer service. In fact, many of the companies that are doing this have been doing so for two years.

But a different research set from Gartner predicts that it will be difficult to gauge the return on some of these investments, especially those related to social CRM.

By the end of this year, only 50 percent of businesses will actually be able to measure their ROI related to social CRM applications, according to Gartner. For technology solution providers, that could mean a shut down in funding. Noted Gartner research director Adam Sarner:

“For the 50 percent of Fortune 1000 organizations not determining, or even measuring, ROI, ignorance will mean failed projects. Among the companies who will not see a worthwhile return, only 20 percent will even have the data to evaluate where their social strategy is falling short.”

This year, social CRM deployments will account for about 10 percent of overall CRM software license and subscriptions, Gartner figures. The overall revenue expected for the category this year will be $2.1 billion, up from $850 million in 2011.

Clearly, it is important for VARs and manager service providers to build a strong business case for their clients when steering them toward the social CRM realm — one that they should endeavor to track and to measure moving forward. Or, it could be difficult to find future funding for these initiatives, no matter how sexy they seem.

Check out more IT channel news on SearchITChannel.com and follow us on Twitter! Here’s how to follow Heather Clancy directly.


April 27, 2012  6:03 PM

Is the cloud the right prescription for health care IT?



Posted by: Heather Clancy
Allscripts, Cloud, EHR, electronic health records, healthcare IT, Heather Clancy, IT channel products and services

One of the darlings of the health care IT software sector, Allscripts, announced a tough first-quarter this week.

Bookings were off year-over-year — slipping to $194.6 million for the first quarter of 2012, off from $212.4 million in 2011. Net income was off sharply: $5.8 million for the three months ended March 31, 2012, versus $12.6 million in the year-earlier period. Income was affected by acquisition-related expenses. Perhaps what is more intriguing, however, is the fact that Allscripts has also ditched its chairman, its chief financial officer is leaving to pursue another opportunity, and three directors have resigned in an apparent dispute over future company direction. What’s more, expectations for new products apparently have caused a number of customers to put purchasing plans on hold.

“While Allscripts continued to win important new clients, including three new Sunrise Clinical Manager contracts in the quarter, a number of our clients and prospects delayed commitments as they wait for us to introduce new releases and demonstrate more robust integration,” said Allscripts CEO Glen Tullman, in a statement about the company’s quarter.

All this got me wondering about the general health of the health care IT sector, which has been such a darling among the technology distributors and with certain major technology vendors, including Cisco and Microsoft.

So I did a bit of poking around and came across some projections for health care IT spending release in February 2012 by Compass Intelligence, release in tandem with the HIMSS 2012 conference (the industry’s biggest annual conference).

Compass Intelligence predicts that health care IT spending will reach $78 billion in 2012. Over the next five years, the industry should maintain a compound annual growth rate (CAGR) of about 5 percent to reach $92 billion by 2016.

Mind you, growth is growth, but the excitement about electronic health records and other digital health care initiatives has definitely become more tempered. Ask your own doctor or health care professional how they feel about the transition, and you’ll probably hear more complaints than praises for their own personal situation.

This sentiment, along with overwhelming adoption of consumer tablet computers and ongoing concerns over privacy regulations, could drive more health care organizations to consider cloud solutions, according to Compass Intelligence analysts. The integration challenge of matching up data across application silos is definitely proving to be a headache for many health care organizations, and cloud solutions could be the cure.

“Implementation of the various stages of electronic health records will drive infrastructure and integration needs to support the access, storage, and transfer of data across CRM, HIS, ERP, clinical and other health care enterprise systems,” said Stephanie Atkinson, managing partner of Compass Intelligence, in a press release discussing the research. Compass Intelligence suggests that cloud service providers will rise to handle a number of these challenges, especially the storage and protection of patient records.

Sort of makes you wonder if focusing on the installation of on-premise health care records software is a good value proposition for smaller clinics and hospitals that are struggling to make ends meet through this painful paper-to-digital transition. At the same time, the cloud conversation definitely changes potential liability exposure for technology solution providers and managed service providers. You host it, you’re responsible, unless you write some pretty extensive service level agreements that cover your back.

Check out more IT channel news on SearchITChannel.com and follow us on Twitter! Here’s how to follow Heather Clancy directly.


April 20, 2012  4:15 PM

Get ready for the ‘bizumer’



Posted by: Heather Clancy
Bizumer, Cloud, enterprise software, IT channel products and services, SaaS, Software as a service (SaaS)

The high-tech media, myself included, has been pontificating plenty about the affect of consumer technology on what people are willing to use — or at least tolerate — in a work environment.

There is the affect of social media, of course, although that is the subject for another rant.

To me, the most profound impact is this: enterprise users have increasingly limited patience for applications that are complicated and bloated with unnecessary features. They are becoming what a number of people way smarter than me are calling “bizumers.” A long-time contact and colleague of mine, former Scient and Mercury Interactive marketing guru Christopher Lochhead of Play Bigger Advisors, wrote a great essay describing the bizumer for Fortune last fall.

There are three big reasons that technology solution providers should be paying attention to this trend:

  1. As tablet computers enter the workplace — sanctioned or otherwise — people are becoming more familiar with the concept of application marketplaces. Need to complete a task? Download a simple application that handles it.
  2. Users are sick of waiting for IT. The world of business is moving way too fast for companies to have the luxury of sitting around and waiting for some technology guru to bless what they want to use.
  3. A new generation of workers entering the workforce will balk at using applications that are too complicated for their own good. Sure, you could make them use it, but that doesn’t inspire a culture of collaboration.

The world of business software is changing rapidly, thanks in large part to the promise of software as a service, which offers a way for companies to transform some of their technology investments into an operational expense. But don’t overlook the human motivators for this interest as you consider which applications to recommend.

Check out more IT channel news on SearchITChannel.com and follow us on Twitter! Here’s how to follow Heather Clancy directly.


April 13, 2012  5:20 PM

Gartner: Tablet shipments on pace to double from 2011 to 2012



Posted by: Heather Clancy
Android, Gartner, iPad, IT channel products and services, tablet, Windows 8

Sometimes I feel like I can’t turn around without seeing another update on how tablet computers are doing. I tend to be morbidly fascinated with this particular topic because I have been covering tablets since Slate was bought by Compaq Computer sometime in the 1990s. Yep, I am really dating myself, I know.

In any case, I just finished writing up a story for SearchITChannel.com about how adoption — sanctioned and unsanctioned — is creating services opportunities for technology solution providers. (Look for that story to publish soon.) Literally the day after I filed my article, research firm Gartner updated its projections for the category, suggesting accelerated adoption of these consumer-focused tablets within enterprise and business accounts.

Here are some highlights:

  • There should be approximately 118.9 million tablets shipped worldwide in 2012, which is almost double the 60 million tablets shipped in 2011.
  • Tablets using Apple iOS (the iPad portfolio) will account for 61.4 percent of the shipments this year, while Android tablets should capture 31.9 percent. Windows-based tablets could claim about 4.1 percent of the shipments.
  • The release of Windows 8 could change the equation for IT-supplied tablets, because it will include more enterprise-class features.
“This is exactly the same trends that vendors such as RIM had to face in the smartphone market,” said Carolina Milanesi, Gartner vice president, in a statement about the research. “The difference here is that tablets have been created for consumers first and then relied on an ecosystem of apps and services that make them more manageable in the enterprise. When the deployment will come from an IT department, we believe that operating systems such as Windows 8 will have an advantage as long as they are not seen as a compromise in usability for the users.”

Check out more IT channel news on SearchITChannel.com and follow us on Twitter! Here’s how to follow Heather Clancy directly.


April 6, 2012  8:00 PM

Gartner, IDC update IT spending forecasts



Posted by: Heather Clancy
Gartner, Heather Clancy, IDC, IT channel products and services, IT spending, SMB IT spending

Research firm Gartner reduced its expectations for 2012 IT spending this week, even as IDC suggested that small and midsize businesses could spend a record amount on IT technologies and services.

First the not-so-great news: Gartner now believes that global IT spending will increase only about 2.5 percent in 2012, compared with 2011 levels. It previously had hoped for a 3.7 percent growth. Overall, spending should reach about $3.7 trillion by December 2012, the research firm predicted.

Mind you, one of the motivations behind the new forecast is currency fluctuations, as the dollar strengthens against other currencies. So, even though revenue will be lower than anticipated, that doesn’t necessarily mean there will be fewer projects than expected.

Now for the more positive information released this week, which has to do with SMB spending expectations.

Gartner predicted that spending will reach $874 billion in 2012, expanding to $1 trillion over the next four years. Midsize organizations will offer the most opportunities for technology solution providers during that timeframe, mainly because of their spending on enterprise software, Gartner reported.

IDC’s latest SMB forecast, specific to the 8 million companies of this size in the United States, predicts a “record-breaking” year for the sector.

IDC projected that IT spending by U.S.-based SMBs will reach $138 billion in 2012. Small businesses will lead the way in personal computers and peripherals, spending about twice the amount on these technologies as midsize companies, IDC estimated.

One-quarter of the spending will go toward IT services, or about $38 billion in 2012. Systems and storage represent the slowest growing category from a revenue standpoint, IDC said.

One sector in which SMB spending differs dramatically from those of enterprise is networking, IDC reported. This category will account for the smallest amount of spending; that is in contrast with larger companies, which are investing heavily in next-generation data center and networking infrastructure.

Realistically, the difference isn’t that surprising: many smaller companies still rely on consumer broadband and wireless services for access. Only one-third of them have actually invested in networking infrastructure, IDC estimated.

Check out more IT channel news on SearchITChannel.com and follow us on Twitter! Here’s how to follow Heather Clancy directly.


March 30, 2012  6:33 PM

Microsoft cloud research underscores channel’s role in adoption



Posted by: Heather Clancy
Cloud, Cloud Services, Heather Clancy, IT buyer market research, IT channel products and services, Microsoft, Small and Midsize Business, SMB

There’s a new Microsoft survey out this week that suggests adoption of paid cloud services among businesses with two to 250 employees will double during the next five years.

Right now, approximately 30 percent of all SMBs use some sort of paid cloud service, according to the research.

That, in itself, is a notable trend. What is also interesting, from a channel partner standpoint, is the fact that many of the SMBs surveyed by Microsoft felt that it was important to buy their cloud services from a local technology solution provider.

In addition, approximately 56 percent of the companies that were surveyed indicated that they would prefer to buy their IT services and cloud services from a single source — suggesting that there is a serious opportunity for VARs, resellers, integrators, MSPs and other technology solution providers to layer cloud recommendations into their solution portfolio.

Many of the SMBs surveyed (53 percent) said they would turn to an ISV or software company to acquire cloud services, while approximately 12 percent said they expected to source these services from a local reseller or systems integrator.

“Trust development is critical to our work with SMBs. Increasingly, clients tell us they work with Hostway because our global datacenter network often provides local support,” said Aaron Hollobaugh, vice president of marketing for the Microsoft business partner, in a statement. “Client trust is earned because we view every business — regardless of size — as an enterprise.”

The study covered 3,000 SMBs in 13 countries; it was conducted in December 2011 by Edge Strategies on behalf of Microsoft. Some additional statistical highlights can be found in the infographic below.

Check out more IT channel news on SearchITChannel.com and follow us onTwitter! Here’s how to follow Heather Clancy directly.


March 23, 2012  8:00 AM

Intel unleashes management tool to accompany channel server onslaught



Posted by: Heather Clancy
Heather Clancy, Intel, IT channel products and services

As part of its latest server technology onslaught for custom systems builders and other channel resellers focused on hardware innovation, Intel has introduced a management tool specifically designed for custom server builders and the VARs deploying servers using its latest processor line.

The introduction is part of Intel’s massive server microprocessor, motherboard and component refresh rolling out this quarter, the Xeon Processor E5-2600 series. That technology is at the heart of server refresh wave from many major OEMs, and the tools introduced this week by Intel at its premier channel event, the Intel Solutions Summit, are its latest competitive weapons for the channel.

Lest you worry that Intel has focused too heavily on the needs of big OEMs, Intel has shipped eight new motherboards and four new chassis specifically designed for the needs of custom server builders.

There are now more than 50 different solution guides now available for the Xeon Processor E5-2600 as part of the Intel Enabled Solutions Acceleration Alliance. Channel system builders including Appro, Bell, Penguin Computing, Seneca, Proactive Technologies, SuperLogics, sgi and ZT Systems have all come to market with new servers designe to server the needs of data center VARs.

The new software management suite that accompanies the new server line is called the Intel Server Continuity Suite. The software was designed to aid with real-time monitoring, backup, and virtualization provisioning. It complements all of the different server configuration supported in Intel’s channel-focused portfolio, including rack, pedestal and modular.

Check out more IT channel news on SearchITChannel.com and follow us onTwitter! Here’s how to follow Heather Clancy directly.


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