Observations From Around The Channel1:14 PM EST Fri. Jul. 24, 2009
Since we are rolling well into the third quarter, it may be an appropriate time to sum up some of the key events and observations of the past several months. We will revisit these in-depth at Channelweb.com or in future issues of CRN or catch some of the discussion on our community Web site, Channelweb Connect.
Let's start with a comment from a veteran solution provider who recently observed that his peers were either complaining about how poor business is or how they were gaining ground on the competition because of strong results. Since we just wrapped up our research for the fastest-growing solution providers as part of our Fast Growth 100 list, we can report many VARs are having a strong year despite the economy. But this solution provider's comment about the bifurcation of the channel is spot-on as we don't hear many VARs talk of being flat. It seems VARs are either having an up or down year, with few in the middle.
The First Wave of second-quarter earnings has me scratching my head. Intel and IBM give the market a boost with their financials on two different fronts while Dell continues to struggle. Intel sees a strong consumer market while IBM proves it is the master of managing margins. But neither report gave me much hope for a rebound in the business computing marketplace. If anything, IBM's results sent a mixed message. Its hardware business was down 23 percent from a year earlier while software was off 6 percent. Its two services business were down 10 percent each but it managed to post only a 1 percent drop in net income and boost earnings per share. Chairman Sam Palmisano's team did a masterful job of managing expenses. But there was not much to cheer about if you were an IBM partner. Insiders say IBM is taking share from competitors, a claim we haven't yet confirmed.
One thing that came out of its quarterly briefing was word it is selling more high-end software solutions directly to customers -- not good news for the channel -- and that its huge public-sector business run by Bob Samson is posting strong results -- very good news for partners. If Samson ever retires from IBM, the company should petition New York City for a ticker-tape parade.
Speaking of the public sector, our recent XChange Government Integrator event held in Washington, D.C., was a vacation from the Great Recession. D.C. is one hot town thanks to President Obama and the government's spending spree. During that conference we gained insight into just how robust the public-sector IT market is right now. The highlight of the conference was the Public Sector Channel Executive of the Year Award we presented to Oracle's Dennis Morgan, who has built his career serving public-sector solution providers and customers. He is not only one of the most visible and well-known executives in and outside of the Beltway but one of the most trusted. He has forgotten more about public sector than most of us will know in a lifetime. A well-deserved honor; congrats to Morgan.
Outside of public sector, there are some other executives making some gains. Most notable among them is Fernando Quintero, Americas Channel Chief of McAfee. After a few years of channel disappointments and listlessness at the security vendor, Quintero is leading the company's charge with an impressive plan to re-engage partners, broaden the company's channel and sweeten terms. On the channel side, Symantec's Randy Cochran has slapped McAfee around for some time now, but he is in for a good fight in the coming months. Another executive to watch is the affable, indefatigable Stewart Krentzman of Oki Data Americas. Krentzman is seizing the opportunity to gain share and loyalty in the channel. He was the driving force behind Oki's impressive managed print services program launched earlier this month. The program allows even the most reluctant of VARs a chance to get into the managed print services market with a bundle called PageStart. It's worth a look.