Channel Marker

December 27, 2007  2:16 PM

Will the IT economy go south in 2008?

Heather Clancy Heather Clancy Profile: Heather Clancy

I’m supposed to write some insightful list of predictions this time of year. Once I figure out what to say, I’ll get right on that. But first, I wanted to write about some survey results released a few days ago by uber-solution provider CDW.

The data, part of a report called the CDW IT Monitor , suggests that it will be harder for VARs and systems integrators to convince their customers to increase their spending plans in 2008. This will be especially true of small businesses, apparently, which isn’t great news for any solution provider focused predominantly on this sector. Only 38 percent of all the respondents (1,072 IT decision makers) plan to add more money to their IT budgets during the year. Breaking it down demographically, only 26 of small businesses intend to spend more compared with 46 percent of midsize companies and 43 percent of large companies.

One reason could be that small businesses aren’t having their expectations met: About 52 percent of them reported that technology had helped improve financial performance or efficiency. This compares with 69 percent of midsize companies and 71 percent of larger enterprises. (Incidentally, government agencies were even happier: Close to 80 percent of the decision makers report that they have realized an appreciable improvement in their financial bottom line as a result of implementing technology.
So, does this spell trouble for VARs and resellers betting big on small business? I’m choosing to look at things a little differently. Sure, it probably means that it may be tougher to sell your client on a brand-new, end-to-ind unified communications system. But things with a very clear return on investment potential—one you can demonstrate very clearly—may go a long way toward boosting both small business IT budgets AND their happiness with what they’re getting.

Heck, you’re out there living this every day. Why don’t you tell me? E-mail your observations, predictions, comments and so forth to Heather Clancy at Meanwhile, I’ll watch for the next CDW monitor, which is due out in a couple of months.

Heather Clancy is a high-tech business journalist who has been watching comings and goings in the high-tech channel for more than 18 years.

December 24, 2007  11:56 AM

Diamond steps down from top ePartners slot

badarrow Barbara Darrow Profile: badarrow

Howard Diamond, who has been CEO and chairman of ePartners, is relinquishing the CEO post.  Michael McCarthy has been promoted from president to CEO, according to  a  company statement posted last week. 

It was unclear from that release whether Diamond would remain chairman. A spokeswoman was unsure about the chairmanship.

McCarthy and Diamond have worked together for years, at the old Corporate Software and then at Level 3 Communications, which bought Corporate Software in early  2002. A few months later, Level 3-with Diamond-snapped up Software Spectrum, another big LAR, and merged its operations with those of Corporate Software.

At one point, Corporate Software was the largest of the Large Account Resellers or LARs selling Microsoft, Lotus and other software to big  companies. Software Spectrum was one of its biggest rivals.

Diamond has been chairman and CEO of ePartners since 2005 when he came out of retirement to manage  the merger of EYT and ePartners, two large Microsoft Business Solutions partners.

Howard has been an articulate champion of the value that software partners can bring customers. For example, last year he spoke to me about how ePartners derived the bulk of its revenue from its own customization and specialization work atop the Microsoft stack, not from reselling the stack components themselves. As we all know, those margins are mighty thin.

In this age of Web-enabled software distribution, it’s more  important than ever that software partners continually build and bolster their vertical and domain expertise.

In other words, don’t rely on your vendor partners to provide you with the margins needed for survival. They’re fighting the same battles you are, so if you want a friend, get a dog. If you want to survive, make sure your value stays current and, well, valuable!

Barbara Darrow, a Boston-area reporter, can be reached at

December 19, 2007  10:40 AM

Big channel questions loom in 2008

badarrow Barbara Darrow Profile: badarrow

What will be the defining partner issues of the coming year? Here’s a completely unscientific take on what solution providers of all stripes should watch for.

One: Will Dell’s new-found (or born again)  channel religion take? Can EqualLogic’s Don Bulens endow what partners see as Darth Vader with his good partner karma?

Two: Will VMware forestall the coming-from-everywhere virtualization onslaught? Current players like Citrix/Xensource are gunning for it as are VM newbies Oracle and Microsoft. If Microsoft stumbles with its Windows 2008/Hyper-V combo, VMware’s head start may prevail and its lock on enterprises continue. Should Hyper-V soar, Microsoft could be the go-to virtualization player at least in smaller companies and then it must wrestle with vexing licensing issues. How to adjust pricing when customers will have to buy fewer copies of the OS?

Three:  Will single-core, single-processor computers go the way of the buggy whip and the Edsel? Could be.

Four: Can/will Google transform itself into a power within the firewall? It’s using its appliance and apps as Trojan horses but will IT really tolerate this consumer-led push? Can it afford not to?

Five: Conversely, can Microsoft transform itself into a software-as-a-service power? Microsoft, unlike Google, has to defend its on-premise turf. Will it figure out how to bring its partners along for the ride? Or throw them under the bus?

Six: Can Hewlett Packard beat back Dell’s new partner efforts to build on its hardware dominance? Will HP partners defect?

Seven: Can Microsoft regroup from its  under delivered Vista? Will SP 1 re-invigorate the market, spur “killer app” development? Or will Redmond simply declare victory and start hyping the next release?

Eight: Will computer retail survive/prosper? Was  CompUSA’s demise a sign of things to come in retail consolidation or just a specific case of mismanagement and missed opportunities?

Nine: Will the iPhone parlay its blockbusting consumer popularity into the enterprise? Will it “work well with others” as in existing  corporate e-mail and other systems? Or will the corporate classes cling to their Blackberries?

Ten: Will Microsoft sort out its self-hosted ERP puzzle? The company wants to offer hosted options for its apps but so far has been publicly mum on what could be called “ERP Live.” Maybe it can’t figure out which of its four (count ’em, four!) ERP lines should be the underlying code base?

Bonus item: Who will win the unified communications marathon? Networking powerhouse Cisco or application dominator Microsoft? Or could there be a dark horse?

Barbara Darrow, a Boston-area reporter, can be reached at

December 18, 2007  8:51 AM

Resolve to under-promise and over-deliver in 2008

Heather Clancy Heather Clancy Profile: Heather Clancy

I get sort of stubborn about using my mobile gadget to bridge my person and business life. It’s pretty simple: I forget things.

This has caused all sorts of heartache for me in the past, especially when it comes to synchronizing my various smart phones with both my work and personal computers. Just yesterday, I realized on the train to New York City for a meeting that I had NO idea where said meeting was to take place. My software ate my homework, mom. Today, I’m still fighting with the application that caused the problem. But I will insist on using my iPhone.

So, I took a sort of sick pleasure from the findings of a survey released last week by Tata Consultancy Services, the big systems integration and consulting company based in India. At the highest level, its research shows that one-third of all IT projects fail to meet their original expectations. Sadder yet, 43 percent of the IT organizations surveyed say the business and board side of their business expects failure as the norm.

The most common misalignments are related to botched timing (cited by 62 percent of the respondents), budget (49 percent) and unanticipated maintenance costs (47 percent).

Mike McCabe, director of communications for the North American division of Tata, said the survey touched about 800 IT managers in companies with more than 250 employees. Tata actually conducted the survey to get a sense of how it performs relative to the industry norm. Since the integrator didn’t survey its customers with the same questions, it’s hard to draw any kind of concrete comparisons. However, McCabe says Tata delivers on time 87 percent of the time, which puts it in a relatively good position with respect to where most IT projects usually underperform expectations.

What does it mean for your own business as a solution provider?

It’s pretty simple: it’s so much easier to manage customer service when the customer knows what to expect. When you’re setting goals, honesty is the best policy and it may be better to walk away from an opportunity than to go into a situation knowing that you can’t deliver.

December 17, 2007  11:20 AM

Vista: Worst product of ‘07?

badarrow Barbara Darrow Profile: badarrow

Here’s one story you could see coming down the pike: PC World names Vista the biggest tech disappointment of the year.

The subhead: “No Wow, No How.”

It’s not that the new Windows client is so bad, it’s just that it’s not good, opines PC World writer Dan Tynan.

Money quote:

“No wonder so many users are clinging to XP like shipwrecked sailors to a life raft, while others who made the upgrade are switching back. And when the fastest Vista notebook PC World has ever tested is an Apple MacBook Pro, there’s something deeply wrong with the universe.”

The full PC World  story is here.

Other technologies making this dubious achievement list: Municipal Wimax; social networking (hear, hear!); Microsoft Zune; Microsoft Office 2007. Is there a trend here? Oops! Apple Leopard is there too.

Here’s a prediction for 2008: There will be a raft of stories about how Vista, post SP1, really isn’t so bad. And maybe it is worth a look-see. After all, do we really have a choice? 

Barbara Darrow, a Boston-area reporter, can be reached at

December 10, 2007  8:44 AM

After CompUSA: Random thoughts on retail

badarrow Barbara Darrow Profile: badarrow

The  imminent demise of CompUSA sparks a now-familiar debate over the viability of brick-and-mortar retail outlets.

That discussion should be buried: There will always be room for physical stores, although their nature will change over time. As always. (When I joined a channel book more than 15 years ago, one of my IT sources told me that the computer channel was disappearing but fast. “Why don’t you just join Buggy Whip Daily?” he asked. Nyuk, nyuk, nyuk.)

Naysayers today point to the deaths of retail music outlets as predicting the future of computer retail. A local example, Harvard Square was once home to nearly a half dozen big-time music stores. Now several staples — HMV, Tower Records — are long gone. But Newbury Comics remains.

During their going out of business sale, the HMV guys attributed their fate to the Internet.  Newbury Comics had the best prices, and maybe the best help. It also didn’t belong to a ginormous chain like the others.

As for CompUSA: It was once the trailblazer. It employed good people, it sold tons of stuff. It expanded. Maybe over expanded. It faded. There were management mistakes. Tougher competition from online and other chains all contributed. But just a year ago, NetSuite, the pioneer in ERP-as-a-service, forged an alliance with CompUSA to move more of its SaaS wares. Why would NetSuite-which ships no physical goods-ally with a retailer? Because CompUSA had local presence: Feet on the street. It also fielded a small cadre of people to support small businesses. Of course once the NetSuite deal was announced, no one heard any more about it, which probably means the results were underwhelming.

But look at the bigger picture. HP has displaced Dell as PC kingpin largely because of  HP’s retail presence and the fact that many people like to try and buy. To borrow Microsoft’s tortured phrase, a catalog is no replacement for the “user experience” of a well-lit, well-stocked, well-staffed retail outlet.

In my -admittedly small — anecdotal world, what happened to the CompUSA was Best Buy. A new store went in less than two miles away from the Brighton, Mass. CompUSA a few years ago. Best Buy hired young kids along with some severely over-qualified veterans to sell and support its goods. One of the help desk guys I dealt with had been a vice president of service at one of the local mini-computer companies. Yikes. The store thrives. In fact, the Gen Yers are so busy, it’s hard to get their attention. So my back up is Micro Center. Also jammed. Also well staffed.

Those Best Buy Gen Yers not only know their stuff, they seem to love it. In the last few years, the folks at the Market Street CompUSA could no longer be bothered with questions about software or even pointing out where a given SKU might be.

Still, within that two mile radius, Best Buy (and Micro Center) outclassed CompUSA. End of story. That store closed last year.

(Hey, Micro Center: What’s with the interrogation at check out? The cashiers won’t let you get out without giving up your first born (at least your phone number and vital stats.) One guy fled store in utter frustration — without his purchase — because the checker wouldn’t let him pay cash for his printer cartridge without getting his full workup. That woman had nothing on Mike Vrabel. Here’s a hint: Ease up or we’ll all go back to the lines at Best Buy.)

Barbara Darrow, a Boston-area reporter, can be reached at

December 7, 2007  11:27 AM

Dell gets partner religion (again)

badarrow Barbara Darrow Profile: badarrow

Well, credit Dell with putting on a  good show for solution providers with its most recent pledge to embrace the channel. Maybe the company will make good on its promises this time around but here are a few things to remember.

First, this whole Dell-vs.-the-channel thread isn’t as cut-and-dried as it seems. I’ve talked with several resellers over the years who preferred dealing with Dell than with the allegedly more channel-friendly HP or other hardware vendors.  Many said that hardware margins were so thin anyway, they usually skipped that part of the sale unless the customer insisted. And in those cases, Dell was as good a choice as any. At least until Dell service woes surfaced so publicly.

And, many solution providers who had healthy hardware businesses a decade ago are now software-and-services only. That tells you something about the nature of competing not only with Dell but with CDW and other low-cost suppliers.

Let us not forget that Dell built its fortune on being great on logistics. It never led the field in great, creative, fun machines. Nor on service.  (I’m sure Michael would beg to differ–what would you expect?) But there’s nothing wrong with using a supplier who can drop-ship you a server or a PC but fast.

And another thing: Dell has had many enablers in its partner-bashing past.  You know who they are.  Big names. Like Oracle and Microsoft. When it was top dog, Dell got T&Cs from all of these guys–Intel too, I’d wager–that no one else could hope for.

Dell’s sales force types are no angels. Witness the tales of VARs who say the a strategicically gifted flat-panel TV to a customer exec spelled the difference between them and Dell winning a given deal. But is that sales force any worse than Oracle’s  or IBM Global Services in the enterprise arena? All of these vendors–including Microsoft– want account control for themselves. No partner can ever forget that.

So, let’s wait and see what happens with Dell’s new programs. But how hard is it going to be for any VAR battered by Dell in the past to start registering leads with the vendor now?

Most solution providers will tell you they see lead registration as a vendor tool for collecting customer info it later uses for its own (often direct) benefit. And Dell certainly didn’t patent that idea.

Barbara Darrow, a Boston-area reporter, can be reached at

December 6, 2007  3:59 PM

Some storage trends that may shape solution providers’ 2008 plans

Heather Clancy Heather Clancy Profile: Heather Clancy

I keep forgetting how hard it is to take notes about a panel that I’m moderating myself. But that doesn’t stop me from trying. I picked up several compelling tidbits earlier this week during pretty much all the presentations at the Storage Strategies channel conference in San Francisco, hosted by the publisher of this blog, TechTarget.

Certainly, what I notice may be different than what you notice, but I offer up these 4 Storage Observations that may be worth some business planning research on the part of storage solution providers.

  1. Archiving vs. Backup (they are not one in the same): Tony Asaro, analyst for Enterprise Strategy Group, observed during his presentation that 60 percent to 70 percent of all the data being stored on primary (read more expensive) storage devices actually is dormant within 90 days. So, there’s a very real differentiation between backup of files you might need promptly vs. archiving of files for compliance and strategic purposes. Here’s a deeper report on database archiving that the firm just released this week.
  2. The use of storage virtualization is on the rise: According to twice-annual buying intentions by Storage Magazine (also published by TechTarget), the last year has represented a breakthrough for storage virtualization. While 61 percent of storage managers HAD NOT virtualized any storage last spring, that number fell to 43 percent when the magazine ran its second survey of the year.
  3. Encryption is still underutilized: According to the Storage Magazine survey, close to 60 percent of the storage managers are not using encryption for their storage devices. This despite new compliance and litigation rules that seem to kick into effect every day.
  4. Buyers are looking for different skills in storage solution providers than in the past: According to the survey, about 20 percent of the buyers cited technical support and service as key factors in their storage purchases, with about the same number also pointing to a storage solution provider’s ability to provide other technologies as critical. So, there is a shift going on to favor integrated solutions rather than point products. Are you in a position to accommodate?

E-mailcomments and thoughts to Heather Clancy and we’ll have an online dialogue. I swear it will be MY priority to share your responses.Heather Clancy is a business journalist and communications consultant who has been following the high-tech channel for more than 18 years.

December 5, 2007  1:24 PM

Microsoft gets new Americas sales chief

badarrow Barbara Darrow Profile: badarrow

Microsoft’s filled a key sales post according to this IT World  story.The company tapped  Robert YoungJohns, formerly a Sun Microssytems exec and Callidus CEO, to lead North American Sales. 

 Two execs, Michael Park and Jens Winther Moberg had shared responsibilities for the nearly-9,000-person sales army since Bill Veghte took on business management and strategy form in February of this year.

YoungJohns officially reported for duty on Monday.

Barbara Darrow, a Boston-area reporter, can be reached at

December 2, 2007  10:53 PM

Reller seques from biz apps to Windows

badarrow Barbara Darrow Profile: badarrow

Tami Reller is now CFO of Microsoft’s Platform & Services Division.

She retains her corporate vice president title and now reports to Kevin Johnson, president of PSD, according to an internal announcement made last week.

Reller, with her Great Plains roots, has long history with the company’s business applications. Platform and services encompasses the company’s Windows franchise.

For more click here 

Barbara Darrow, a Boston-area reporter, can be reached at   

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