2007 Top 25 Most Innovative Executives12:00 AM EST Mon. Nov. 12, 2007
That's the view among Hewlett-Packard's solution providers. And that's one of the big reasons HP surged past IBM this year to become the world's largest technology company with fiscal 2007 revenue cracking the $100 billion mark for the first time.
What sets Hurd apart from top rivals IBM and Dell is that he regularly meets with and seeks input from HP solution providers of all stripes.
In May, for example, Hurd and his top lieutenants held an unprecedented channel summit in La Jolla, Calif., with about 40 solution providers to discuss how HP and the channel could mutually grow their business.
And Hurd has been holding CIO summits around the country in which he meets privately with IT executives from small and medium companies and pushes HP's business partners as the primary source for HP products and solutions.
At one such roundtable in San Antonio earlier this year, Jay Uribe, co-president of San Antonio-based Mobius Partners, said Hurd encouraged the companies to work with HP solution providers because HP couldn't touch every midmarket account with its direct-sales force. "That afternoon [after the morning roundtable] I had three voice mails from three financial institutions wanting to set up a meeting to discuss their IT environment," he said.
Rick Chernick, CEO of Camera Corner/Connecting Point, a Green Bay, Wis., solution provider who attended the May summit added, "Mark Hurd made it very clear that HP is going to be No. 1 in all of the product categories that they are involved with and they are going to do it with the solution provider," he said. "That's the key message that came across."
The two-day Executive Think-Leadership Through Partnership Summit session came as both Dell CEO Michael Dell and IBM CEO Sam Palmisano were making new overtures to the channel in an effort to capture more of the SMB market they see increasingly dominated by Palo Alto, Calif.-based HP. But solution providers say Hurd has set a new bar among IT vendor CEOs. Face-to-face contact trumps press releases. Listening to and meeting with solution providers on a private basis beats a keynote address at a partner conference.
With Dell struggling to build a channel strategy and IBM fighting to recoup the hearts and minds of the SMB solution providers it lost touch with when it sold off its PC business, solution providers say Hurd's personal involvement positions HP as the clear favorite in the looming SMB battleground.
Ben Chereskin's name may not be familiar to many solution providers, but his actions sure are.
Chereskin managed private equity firm Madison Dearborn Partners' $7.3 billion purchase of CDW this year, an unprecedented sale for a channel company.
Although the Harvard-educated Chereskin has shunned the limelight, his management of the merger had channel tongues wagging. All of a sudden, private equity firms that had been calling solution providers for years found their calls returned.
"One of the most popular conversations now is about an exit strategy. Most [VARs] never considered that before," Rick Hamada, COO of distributor Avnet, told CMP Channel last year.
Strong customer bases and cash flow make solution providers hot targets for equity firms, said Michael Carter, managing director of The Musser Group, an equity firm with a stake in InfoLogix.
"The resurgence of private equity adds validation to our space," said Dave Gilden, COO of Acuity Solutions, a Tampa, Fla.-based solution provider.
To date, Chereskin has kept mum about CDW's future, but he told CDW's officers and directors last May that CDW was one of the "most compelling investment opportunities that we've seen in years." `
In the few years since it was founded, and the even fewer years since it was acquired by EMC, VMware has built the server virtualization software market pretty much from the ground up, and has been rewarded with a market share of well over 80 percent, and the top IPO since Google.
But once you reach those heights, there's only one direction to go. In VMware's case, the pressure is on as Microsoft gets set to release its Viridian server virtualization software, and Citrix flexes its server, application and desktop virtualization muscles with its XenSource acquisition.
Making sure that VMware stays on top and continues to grow sits squarely on the shoulders of Carl Eschenbach, who heads channel sales. That's a big task for a company that depended on the channel for 100 percent of its more than $700 million in sales in 2006.
To keep that growth chugging along, Eschenbach is looking at new ways to get channel partners to sell virtualization. For instance, he's pushing into the SMB space, with a fast start to getting SMB solution providers certified to sell VMware server virtualization, and letting them partner until they can handle the implementation on their own.
Just how deep into the small-business space VMware can go is unknown. But for a business looking to keep moving up, Eschenbach will have to keep looking downward—at the small-business market, and at the competition that would love to knock his company off the top.
Newegg.com is blazing a new trail of distribution products—and VARs are following it. The privately held company, which says it has more than $1.5 billion in sales, has surged to the forefront of distribution. In doing so, Fred Chang has positioned the company as a viable alternative to the likes of Ingram Micro, Tech Data and Synnex.
Chang's secret? Price and availability.
While other broadline distributors have expanded their portfolios to include specialized support and add-on services, Chang and Newegg have stuck with the basics. And VARs have responded. Earlier this year, Newegg grabbed the top spot as an alternative source of products on CMP's Channel Sourcing Study.
Newegg is a very successful online e-tailer. It stocks a big breadth of products so that everyone from the gamer to the stay-at-home-mom to the IT support guy are among its customers on a given day.
What's truly innovative is how Newegg promotes Web site traffic, by encouraging visitors to join its eggxpert community and using forums, blogs and newsletters. With more than 8 million registered customers, it must be doing something right.
At Microsoft's Worldwide Partner Conference in Denver this past July, Kevin Turner, perhaps more than any other executive, found himself on the hot seat.
That's because Microsoft's software-plus-services strategy, which calls for the Redmond, Wash.-based vendor to build out its portfolio of software delivered directly to customers, is shaking up its traditional model and leaving partners no choice but to adapt.
New offerings, such as CRM Live, mark the first time customers will be able to buy Microsoft Dynamics business applications directly from the vendor—and partners weren't shy about voicing their concerns at the event.
The general consensus in the channel, however, is that Turner has done an expert job of articulating Microsoft's efforts to carve out a channel strategy around SaaS.
At the conference, Turner acknowledged that the transition Microsoft is making puts new and strenuous demands on its partners.
"I encourage all the Microsoft partners—we'll help you, we'll work with you, but this change is going to happen," he said.
Turner was also honest about the performance of Microsoft's channel program, saying Microsoft hasn't gone far enough in providing partners with clear communication channels.
This type of frankness plays well in the channel, so it's no surprise partners turn to this exec when they're confused about Microsoft's direction.
The popular story is that Advanced Micro Devices is good for the channel primarily because it gives us "choice." That's true. Until AMD emerged as a challenger in the x86 processor market, Intel called all the shots.
But Hector Ruiz knows that's only part of the story. Succeeding AMD founder Jerry Sanders as CEO in 2002, Ruiz has guided the 38-year-old, Sunnyvale, Calif.-based company through arguably its most important period. With the launch of the Opteron server processor in 2003, AMD became a true competitor to Intel. Later, AMD would beat the chip leader to the punch with the first widely available dual-core x86 processor. AMD still challenges Intel with its quad-core Opteron and Phenom chips.
But AMD isn't merely a price spoiler. The chip maker has truly been an innovator. When Intel broke first with its quad-core product, AMD went ahead and designed a "native" quad-core chip, code-named Barcelona, which has the channel abuzz.
When it comes to brand recognition, nothing beats having your company's name entrenched as a verb in the lexicon of language. Even Microsoft can't claim that.
Of course, the ability to "Google" something doesn't translate into a $700 stock on Wall Street. The Mountain View, Calif., company's got a lot going on right now. And if it starts to feel like it's Google's world and we just live in it, give the kudos (or the blame, depending on your point of view) to CEO Eric Schmidt.
In the past year, Schmidt spearheaded a multitude of initiatives and acquisitions, including enterprise applications, an Office suite and most recently—and perhaps ultimately most important—a mobile operating system and open-source alliance of mobile manufacturers. In the not-too-distant future, wherever you go, Google will be there with you.
For a growing number of solution providers, that means get on board or be left behind. Dave Goebel, president of Goebel Group, is in the former camp. About five years ago, Goebel Group started selling the Google Search Appliance, and as Google's business model evolved, so has his company's. About 30 percent of its revenue now is Google-related. "As the software development model changes to more Software-as-a-Service, Google's influence in the channel will increase," Goebel said.
For Mitch Breen, the task has not been to change his company's channel program, or come up with some new, improved version.
No, his task has been to convince solution providers that EMC really is serious about the channel.
While Breen has been working on that, there are still solution providers who trust EMC as far as they trust Dell in terms of being a channel-friendly partner.
This is despite Breen's best efforts to make Hopkinton, Mass.-based EMC a channel-friendly vendor. This includes the annual tweaking of the company's Velocity channel program, as well as recent moves to work with Intel to bring EMC software together with Intel hardware for custom-system builders.
In a way, his job could possibly be getting a bit easier thanks to the decision by Dell to acquire EqualLogic in a huge $1.4 billion deal. Dell has traditionally been EMC's biggest sales partner, accounting for about 15 percent of EMC's revenue last year, mainly by way of its sales of EMC's Clariion small and midrange arrays.
How the Dell acquisition helps or hinders EMC may become evident in January, when the company tweaks its Velocity program. And, if history is a guide, the tweaks will be small because that's all Breen really needs to do.
Since joining Oracle in 2003, Rauline Ochs has faced the challenge of turning the world's second-largest software vendor into a channel-friendly organization.
Perhaps the most groundbreaking move for Redwood Shores, Calif.-based Oracle has been the development of its All-Partner Territories strategy, under which most sales to new SMB customers in designated territories and markets are left to resellers. After a year-long pilot program, Ochs helped formally launch the APT program in August 2006, which was later expanded to Oracle's Siebel CRM software and other applications. This year, APTs were added for resellers of Oracle's flagship database software and middleware products, as well as for territories built around higher education and state and local government vertical markets.
On the product side, Oracle developed its Oracle Accelerate initiative that provides some 1,600 channel partners with industry-specific, preintegrated application bundles and rapid implementation tools targeting SMBs.
Bruce Geier is ready to take on the world. The head of Technology Integration Group sees the export of U.S. solution provider savvy to China and Southeast Asia as a huge growth opportunity, the likes of which he hasn't seen in 25 years.
"The Chinese use of IT products and automation will skyrocket in the next few years the way the U.S. did in the '80s," Geier said.
And Geier knows what he's talking about. He started San Diego-based TIG in 1981, a business that today has annual revenue of $300 million. Within five years, he expects his international revenue will match his domestic sales.
Earlier in the year, TIG acquired a German solution provider, primarily to serve U.S. military contracts in Europe and North Africa. But Geier said he's shying away from making an all-out assault on Europe because the continent is close to the U.S. in its IT infrastructure.
The channel pioneer and entrepreneur said going global has given him a new lease on life. "I'm not ready to quit yet," he said. "Some people lose that aggressiveness that they had when they were young. That's something I hope I never lose."
David Hemler knows the value of the channel. Familiar with the channel through previous positions, such as the president of Microsoft Canada, Hemler has been actively reaching out to potential partners and those partners gathered from the acquisition of MSP Speakeasy in March.
Hemler saw that Best Buy's Geek Squad service was a less-than-complete offering and the Minneapolis-based company needed a way to augment it. He is betting that openly reaching out to the channel is the most tactical way to determine how to add value without adding overhead.
In addition to the Speakeasy acquisition, Best Buy for Business is working on pilot programs with channel partners to determine who the best ones will be.
Ingram Micro's Greg Spierkel is a man of his word in the eyes of his solution provider customers. And that quality could prove crucial as the distributor seeks to expand its global footprint.
"With Greg at the helm, when he says he's going to do something, he seems to have a track record of getting it done and getting it delivered when he says it's going to be done," said Tommy Wald, president and CEO of Riata Technologies, an Austin, Texas-based solution provider and member of Ingram's VentureTech Network.
Spreading its global footprint is key to the distributor's success, and Spierkel is spearheading its expansion into new markets while driving innovative new ways of working with the channel at home.
One of its key plays was the expansion of its Seismic Managed Services Warehouse, a hosted suite of managed services that levels the playing field for those looking to make the transition to the MSP model.
Santa Ana, Calif.-based Ingram also launched four partner networking sites, called Zones: VentureTech Network, SMB Alliance, GovEd Alliance and System ArchiTechs. The sites allow resellers to create profiles and blogs and to network with colleagues to share information and best practices.
"It really allows resellers an opportunity to get to know each other on a more personal basis," Wald said. "In our world, that's what VTN is based on—it's that personal knowledge of other business owners."
He's not as brash or as flashy as some IT executives, but Keith Goodwin isn't afraid to try something new.
He has spent the bulk of this year overseeing a diverse set of new partner initiatives, all of which aim to foster profitable growth for Cisco and its solution providers.
What's unique about Goodwin's strategy is he's fully aware that partners aren't all built to find profitability down the same path. That's why San Jose, Calif.-based Cisco's new partner programs support solution providers working in areas as varied as the SMB space, managed services and hosted services.
To meet its growth opportunities head-on, Goodwin and his team this year have dipped their fingers into a number of pies, looking for new ways to help partners grow their Cisco business.
The company added the first new certification to its program in 10 years, the new Select badge, which could add 10,000 new certified partners over the next two years. Meanwhile, the new Cisco Managed Services Channel Program, launched at the end of October after a year-long pilot, was built to meet the specific needs of MSPs, and an agent program for its WebEx conferencing services is under development.
Quick, how many presidents of multihundred-million-dollar companies attend their three-day solution provider conferences while sitting in the audience? In Phoenix. In August. What, too many fingers to count that low?
On that very, very short list, however, is Rance Poehler, who sweats for three days with his partners every year. While Panasonic Computer Solutions Company, Secaucus, N.J., is the fifth-largest notebook PC maker in terms of volume, it is in a tug-of-war with Hewlett-Packard for the No. 2 position of seller of mobile PCs (after No. 1 Lenovo) in revenue, which in 2007 is expected to hit $700 million. That high revenue comes from a high average selling price of more than $2,700 vs. HP's $1,100 or so, Poehler said, which means an average yearly revenue for its 275 solution providers of about $2.5 million.
While PCSC continues to recruit new partners, it is not at the expense of existing ones. In fact, this year it deauthorized at least 75 underperforming partners in order to focus on those dedicated to the company.
More than half of Red Hat's sales in its most recent quarter went through the channel. It's a big turnaround from where the Raleigh, N.C., company was four years ago, when more than 90 percent of its sales were direct.
As Red Hat's North American channel chief, Mark Enzweiler helped organize a Big Bang program overhaul this spring, with significantly expanded lead-generation initiatives, market development funds and training programs.
Partners like what they're seeing from the new efforts. Until this year, Red Hat lacked some basic channel amenities like an effective partner Web portal. The Red Hat Partner Center site that the company launched in November to fill that gap pleased Troy Webb, a managing partner of Morrisville, N.C., Red Hat partner InCentric Solutions. Webb recalls spending hours searching for product specs and marketing materials, a task that now takes seconds on the streamlined new portal.
Solution providers say a strong Red Hat channel is increasingly important as more and more clients turn to open-source software for their IT infrastructures.
Gavin garbutt has seen the future. When it comes to an understanding of the changes occurring in the IT industry, Garbutt is second-to-none. As managed services continue to evolve, N-able, Ottawa, is positioned to be the leading provider.
Garbutt said the managed services sector will become increasingly competitive as new opportunities crop up. "You're going to see an enormous shift in the next two years. We have so much opportunity and the market is just really starting to wake up," he said.
Eyes fixed firmly on the future, Garbutt said he strives to ensure each customer an "exceptional" user experience.
"We're working on those next-generation programs that will really help our partners mature their business models," he said. "We spend a lot of time and money on understanding the partners but also the SMB market and what they're looking for, and how to align those two."
Being an innovator is not enough to stay competitive, he pointed out. Understanding the company's core vision and dedicating everyone to realizing that vision is equally important, he said.
Gianfranco Lanci certainly knows how to push his competitors' buttons.
The president of Acer has been overseeing the day-to-day efforts of the Taipei, Taiwan-based PC maker's rapid ascent in market share in the United States and worldwide. Earlier this year, Lanci took aim at rival Dell, boldly and personally: He publicly predicted Acer would overtake the Round Rock, Texas-based company in market share within months.
Michael Dell returned the volley in a very animated fashion: "Good luck with that," Dell said, responding to Lanci in an interview with CRN. "I think he has to look at revenue. You might want to go do the math on that. Dell's revenue in Europe is greater than [the revenue of] that whole company."
Lanci and Acer then got to work.
Within several weeks, as another rival, Lenovo, made a bid to acquire France's Packard Bell in an effort to grow European market share, Lanci moved in. He cut a deal to acquire Gateway and, in addition, the rights to buy Packard Bell.
In one fell swoop, Lanci took shots at two of his key rivals and by year's end was moving closer to his market-share prediction.
As 2007 drew to a close, Acer was in third place in worldwide PC market share, and within 12 months had closed its market-share gap with Dell from 10 points behind to 6 points behind—before counting any shipments from Gateway or Packard Bell.
In less than two years, Frank Vitagliano has helped transform Juniper Networks into a channel leader when it comes to working with solution providers.
"We set four priorities with our partner community and we try to live up to these consistently," said Vitagliano. Those priorities are: to grow mutual revenue and profitability; invest in partners and partner programs; continue to improve on the ease of doing business with Juniper; and enhance teaming.
For Dave Gilden, COO and partner at Acuity Solutions, Tampa, Fla., Vitagliano's channel reforms have breathed new life into Acuity's relationship with Sunnyvale, Calif.-based Juniper. "The intangible piece he brought to the table and which really led to our commitment to the relationship was the integrity," Gilden said. "I trust that when he said he's going to do something, he'll follow up on that. He has, and it's been tested. He as an individual has stood behind what he said, and Juniper as a company has backed him up."
Innovation is all about seeing possibilities in unexpected places. Nothing could describe Dan Schwab better.
Soon after taking on this role at D&H Distributing, Harrisburg, Pa., seven years ago, long before "digital convergence" became a buzzword, Schwab helped D&H's VARs see the impact of the integration of IT and consumer electronics products. Emerging technologies have always been a key focus of the distributor, said Schwab, who likes to look out five years to see which solutions areas he and his VARs can get in on the ground floor of. This creates a relentless pace of technology vetting and adoption. "In the last year we've added over 80 new vendors," he said.
Constant innovation is an absolute requirement to stay competitive, said Schwab, because distributors are at the nexus of where vendor products are turned into technology solutions that solve business problems. "We've got a healthy feel for what is just bluster and what are real business opportunities."
Paul Otellini joined Intel in 1974 and by the mid-1990s had become head of sales and marketing at the Santa Clara, Calif.-based company. Not incidentally, it was in the 1990s that Intel's marketing efforts brought the company out of the semiconductor shadows and into the public spotlight. When Otellini was elected CEO on May 18, 2005, just about every VAR's customer knew it was a big deal to have "Intel Inside."
Now 57, Otellini is firmly ensconced as the chief steward of co-founder Gordon Moore's vision, a task that becomes tougher each year as semiconductor technology runs up against increasingly unforgiving physical constraints. He and Intel have weathered a direct assault from top x86 competitor Advanced Micro Devices, losing some market share to the smaller company before roaring back over the past several quarters.
Otellini's approach is low-key, as far as CEOs of major technology companies go. Partners know what they'll be getting from Intel and are rarely surprised by the company except in a positive way. Today, the company's commitment to the channel has evolved from the height of the roaring white box days—but then again, the channel has evolved too. As we usher in a new age of mobile, service-based IT, forward-looking partner products from the chip giant—like vPro—demonstrate that the times may change, but Intel and Paul Otellini remain some of the best partners a solution provider can have.
No solution provider chief executive spends more time in front of clients than MSI Systems Integrators' Jim Simpson. "In the last two weeks, I have seen 15 clients," said the former IBM salesman in an early morning phone call. "It sounds a little corny, but we really execute on our values every day and one of those is dedication to the client," he said.
Since becoming president in 2001, Simpson has transformed MSI, Omaha, Neb., from just another hardware reseller grappling with margin erosion into a world-class solutions company. The backbone: nine technology enablement centers where MSI holds free whiteboard collaborative briefings tailored for each client. You heard it right. Free. That's all aimed at developing the right solution for the right client before the first dollar is spent.
MSI's briefings result in a solutions sales close rate of more than 80 percent, propelling it to astronomical growth.
Jim Firestone is the man in charge of making sure that Xerox's new promises to the channel become reality.
Firestone, who joined the Stamford, Conn.-based company in the 1990s after leaving IBM, is one of the few non-lifetime Xerox executives who have worked their way into senior management and stayed on after Xerox's near-death episode eight years ago. He's also one of the executives who has won the trust of Chairman and CEO Anne Mulcahy.
Mild-mannered and soft-spoken, Firestone is also direct. He readily acknowledges that the company continually has to prove itself, and that rivals like Hewlett-Packard present a significant competitive challenge.
Earlier this year, when Xerox announced it planned to acquire solution provider Global Imaging—a reseller of products from rivals including Ricoh—Firestone was asked if Xerox would continue reselling competitors' printers once the deal was closed. "We'll see," Firestone said, working hard to conceal a smile. Global Imaging rapidly began contributing to Xerox's bottom line. Solution providers backed away from earlier fears Global Imaging meant Xerox would compete with the channel for customers. Ricoh and the other vendors wound up severing the relationship with Global Imaging and Xerox, and the accounts began switching over to Xerox products.
Solution providers give Xerox and Firestone points for engaging with them in greater numbers, especially with Xerox's "PagePack" program. And while Xerox still has a daily fight against HP, they're confident Xerox won't often be fighting with them, as well.
NWN President and CEO Mont Phelps has used his razor-sharp intellect and 20-20 strategic vision to build the privately held NWN into one of the fastest-growing, most respected solution providers in the country.
Phelps attributes Waltham, Mass.-based NWN's rapid rise to No. 207 on the VARBusiness 500 to focusing on the hottest technologies and IT services and then aiming squarely at the hottest market: the IT midmarket. Add to that his unique ability to pick the right acquisition targets and then weave them into the NWN culture, and you have a $120 million organization that has grown an astronomical 2,282 percent in the past two years.
Phelps has defied conventional wisdom by making product a centerpiece. "Providing product is very important," said Phelps, who counts Cisco, Microsoft, Hewlett-Packard and EMC as his vendor front line. "We make money on product, and can as long as it's part of the overall solution."
Phelps wife, Dr. Jane Linder, a noted author and consultant, attributes NWN's success to Phelp's "expansive vision" combined with an incredible practical ability to execute. "Most people have one or another," she said. "Not both."
How do you increase market share in the cutthroat enterprise software space? By being hypercompetitive. Just ask Mike Borman, IBM's top software sales executive. In October, as Oracle was attempting to close its bid for BEA, Borman said in an interview with ChannelWeb.com, "I am actively hiring people to go kick [Oracle's] teeth in." It's a bold strategy, as well as one that is aimed at keeping IBM's channel partners engaged and profitable. Borman made no bones about going after Oracle accounts and putting them on DB2. His take-no-prisoners approach appeals to VARs who may have been put off by some other areas of Armonk, N.Y.-based IBM's business.
"Customers demand innovative solutions to either improve their efficiency or enable them to compete better in the marketplace. IBM is committed to our business partners and the channel to drive innovation that will meet these customer demands," Borman said.
Borman, who oversees worldwide software sales for IBM's $20 billion software business, recently said he believes IBM has better search technology than Google. For now, IBM concedes Google's got the market share. Still, the two powerhouses are teaming up to provide hardware, software and services to bolster computer sciences at universities. And there will likely be more Google-IBM collaboration.
Partnering with sometime-competitors is not commonplace, but it can certainly bring bottom-line results. And that's not just innovative, it's ingenious.
With co-president Catherine Morris, Gilroy has helped integrate the recently acquired KeyLink Systems Group, InTechnology Distribution and Alternative Technology into Arrow's ECS fold, giving the distributor a wider range of products and new technologies like virtualization and consolidation, and thin-client computing from vendors such as VMware and Citrix. Earlier this year, Arrow ECS, Englewood, Colo., also reorganized its IBM unit to streamline the way the company works with its solution provider customers. The longtime HP channel executive and former OnForce CEO has also overseen the launch of a midmarket initiative.
For Jim Simpson, president and CEO of solution provider MSI Systems Integrators, Omaha, Neb., working with Gilroy has brought dynamism and energy to doing business together.
Simpson said Gilroy's tactical and strategic skills have helped customers meet quarter-to-quarter business goals and devise long-term strategies. "He's very creative," Simpson said. "He listened to what we felt were our strengths and was able to offer up some suggestions based on where he saw the industry going."