The Final Cut

Intermec's Three Channel Tenets

April 20, 2012

It never ceases to amaze me how many channel programs are thrown together without so much as a pinch of channel smarts, strategic planning or even data aimed at recruiting partners. Some companies are willing to spend heavily to build a direct-sales force but, more often than not, look at the cost of building an indirect sales channel as an office expense like buying paper clips. That’s why it’s heartening when you see a vendor that takes a thoughtful, long-term and strategic view of the channel and is willing to make an investment to make it happen.

That’s certainly the case with Intermec, a maker of rugged industrial-strength mobile computing devices for specialized markets, which has tapped a number of Hewlett-Packard’s best and brightest channel veterans to take a direct-sales-dominated culture and build a world-class channel offering in only two and a half years.

The channel commitment, of course, starts at the top with President and CEO Patrick J. Byrne, a 24-year HP veteran who took the top job at Intermec nearly five years ago. Byrne has brought on board four top HPers with channel DNA including Vice President of Global Channels Scott Anderson, a 28-year HP veteran; Senior Vice President of Global Sales and Marketing Jim McDonnell, a 26-year HP veteran; Senior Director of Americas Channels Laura Blackmer, an 18-year HP veteran; and Senior Director of Global Alliances Andy Stento, a 22-year HP veteran.

The Intermec dream team, led by Anderson, has put together a program that has channel business firing on all cylinders. Case in point: Intermec just posted its best channel sales numbers in its recent fourth quarter.

Anderson, who has worked virtually his entire career in channels starting with a role developing channels for HP calculators, took the concept of the old HP “hard deck” and implemented it at Intermec. That hard deck program prevents Intermec’s direct-sales force from quoting any deals outside the 135 top accounts and even includes a “hard coded” computer system to ensure it can’t happen. “It’s a barrier to tripping over our own two feet,” he said.

The Intermec program was built on three sturdy channel tenets:

Predictability: “We talk the talk and walk the walk,” Anderson said. “We are not going to change on you. This is a long-term thing. It not a six-month thing or something we are going to change every couple of weeks.”

Transparency: “We publish our policies,” Anderson said. “We tell you what they are and are not going to try to hide anything. If we have got direct accounts, we are not going to try to hide them. We are going to be forthcoming with them. Here is our policy and here is how we will work with you.”

Governance: That means living your channel predictability and transparency policies every day, in the sales trenches without exception. “If you don’t live by those rules day in and day out, you will fail,” said Anderson.

The sales growth that Intermec’s channel expertise and investment is driving is going to pay off for the company and its partners now and for years to come.

BACKTALK: What do you think of Intermec’s channel sales tenets? Contact Steve Burke at steve.burke@ubm.com.

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M&A Madness: It's Not A Game

March 23, 2012

Solution providers staying pat during the current M&A frenzy could find themselves left standing in what is turning out to be the business equivalent of musical chairs.

This M&A madness is anything but a child’s game. It’s all about making an almost unimaginable business transformation to a world where businesses are buying IT as a service. By the way, this transformation is one of the big reasons we here at UBM Channel put together the BoB (Best of Breed) Conference, which will take place this year from Oct. 15-17 at the Grand Hyatt in Tampa, Fla.

Nicholas Carr, the IT futurist, had it right in his book “The Big Switch,” which compared the current IT-as-a-Service phenomenon to the move by companies 100 years ago to stop building their own power sources and instead move to the electric grid. Today’s transformation, however, does not mean that every business will move outright to the IT-as-a-Service model. There will be plenty that maintain a hybrid model, building their own private clouds and relying on the public cloud for some services. But the economic forces that are reshaping the solution provider marketplace are moving at a breakneck pace.

Solution providers are looking closely at whether they have the right business model and technical talent to make it in this new world. Some of the largest players are bulking up, creating a new class of super-VARs scaling up to gain leverage and cost advantages. Many of those deals are driven by old-world economics. They are all about driving product revenue streams, not compelling new IT services models.

For my money, the more interesting deals are those aimed at cloud computing IT services superiority. GreenPages, for example, which began making big cloud computing investments long before it was fashionable, recently acquired cloud MSP LogicsOne. The deal comes as GreenPages is set to shake up the market with an enterprise hybrid cloud management offering.

“Everything we do is around infrastructure transformation, turning internal IT into a service platform, getting apps and data cloud-ready so customers can move to a new paradigm,” said GreenPages CEO Ron Dupler. “Everything we do is around the cloud.” Even without LogicsOne, GreenPages’ cloud services business is growing at a 30 percent clip. Add LogicsOne to the party and it takes the GreenPages cloud services story to another level.

Another big deal that rocked the cloud computing landscape is the merger of Cloud Sherpas, a top Google partner, and GlobalOne, a top Salesforce.com integrator. It is no small matter that the new company, which will retain the Cloud Sherpas name, also received $20 million in funding from an investment company.

These type of scale-up deals bringing together best-of-breed cloud computing service providers should worry companies that are staying pat. The IT services phenomenon means that solution providers need to, in one way or another, go big or go home.

BACKTALK: Are you going big? Reach out to Steven Burke via e-mail at steven.burke@ubm.com.

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Social Media Lessons: Always On, Always Be Careful

February 23, 2012

If ever there was a cautionary tale on the dangers of using social media, it is the case of solution provider Tommy Jordan.

Unless you've been living in a cave, you know that Jordan is the father who posted a video of himself on YouTube using a gun to blast his daughter's laptop after the 15-year-old complained about her parents on Facebook. What some don't know is that Jordan is also the CEO of Twisted Networks, a Greenville, N.C.-based VAR and MSP that provides a full range of services surrounding network, telecom and security.

In an interview with CRN’s Scott Campbell, Jordan, whose YouTube video has been viewed more than 28 million times, said the incident has not hurt his business and he may in fact have gained a customer as a result of the notoriety.

Jordan told Campbell that Twisted Networks is a sub-$1-million company that cut back from six employees two years ago to two as the economy slowed IT spending. Jordan said business was starting to come around again, as other solution providers have reported, before the uproar over the video started.

But Jordan had noted in earlier e-mailed responses to questions from ABC Network (posted on his Web site, 8minutesoffame.com), that the incident has taken its toll on his family. The worst was an investigation by the state’s Children's Protective Services agency.

"Nothing we've gained is worth the stress this put on my wife and my kids thanks to CPS, so because of that alone, I'd NOT do it again."

In that same ABC Network dialogue, Jordan noted that he built his "company with a partner and absolutely no more investment capital than we had in our pockets the first day, and that might have been about twenty-bucks, and I have a customer retention rate that has never dropped below 95 percent, which is ridiculously unheard of in the IT world. AND I've survived the recession thus far while managing to keep my company open, so I'm doing something right."

Keeping a solution provider business going these days takes a lot of hard work and business acumen. We all must juggle personal and professional lives that are increasingly blurred in our 24-hour-a-day, seven-day-a-week, always-on digital society. What is troubling is how quickly social media can do so much damage to a person's life or business. It's something for all of us to think about as we ponder the video’s aftermath.

Jordan himself said it best on hisWeb site in the ABC Network exchange:

"There are too many messages and lessons to be learned from this experience to list them all," he wrote. "We’ve been sitting here amongst ourselves and talking about finding some way to leverage the infamy and turn it to a good cause. That’s why we built the new web site. Eight minutes and twenty-three seconds of my life have forever impacted all of my family in ways we don’t even know yet, and won’t fully understand for a long time to come, but we feel there are a few salient messages that need to be understood.

In case it’s not obvious by now, ANYTHING you put on the internet can follow you around for the rest of your life! I’m living proof of that and so is my daughter.

You don’t have to give into the media to get your story told the way it needs to be told. Tell it yourself. Tell it in your words. Make people hear what YOU want to say, not what they want to print or air. The average person has an amazing amount of power at their fingertips, but it takes a little luck and a lot of restraint to make it work the way you want it to and to keep your story YOUR story, not someone else’s.

Everything that’s been published or written since that first post has made my stomach turn constantly. I feel like I’m grabbing an angry bull by the horns every time I make a statement or comment. You can be the best rodeo guy around, but eventually you can still get hurt regardless of how careful you are. Be careful with that. That’s all I’m saying."

Be careful. You can get hurt. That's directly from Jordan himself and as good a lesson as any to have come out of this. It's also something of an admission that the job of a solution provider is as much cultural as it is technical. Solution providers need to make sure that customers are aware of the dangers of technology as well as its benefits. That's something all of us should consider as well.

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ServiceKey Puts Partners First

February 20, 2012

When cloud-based solution provider Kalotech won a U.S. Army contract last fall to service Cisco equipment, there was a lot riding on the deal.

The Army was depending on Kalotech to not only save the government money, but to ensure network uptime with stellar service. Kalotech, Alexandria, Va., knew that poor performance on the contract could lead to a big loss in existing and even potential new business.

Fortunately, Kalotech was relying on ServiceKey, which works with partners providing services under the partner brand on computer equipment from major vendors including Cisco, Hewlett-Packard and IBM.

The U.S. Army was “blown away” by ServiceKey’s outstanding performance on several services calls, said Sean Burke, president of Kalotech. As a result, Kalotech is working on closing a pipeline of well more than $1 million in services contracts with ServiceKey as its provider of choice. “Lots of companies provide third-party services, but a lot of them just don’t perform,” Burke said. “ServiceKey has the same attitude we do: The customer comes first.”

ServiceKey partners, meanwhile, are generating gross profit margins anywhere from five times to 15 times higher than traditional vendor services contracts. Every ServiceKey engagement is, in effect, a turnkey service solution for the partner with a dedicated program manager, project manager and technical account manager. ServiceKey does the heavy lifting, providing diagnostic and on-site services. But the solution provider gets the credit and maintains the customer relationship. ServiceKey has a 100 percent channel-focused culture and business model.

More solution providers are tapping ServiceKey for everything from basic warranty and maintenance services to disaster recovery, managed services and even support for cloud/hosted services environments.

Rorke Data, an operating group of Avnet and maker of the Galaxy RAID, SAN and NAS line, is using ServiceKey in deals all over the globe. “Our reach and scale is significantly expanded by working with ServiceKey,” said Joseph Swanson, group executive vice president for Rorke. With ServiceKey’s muscle, Rorke is winning deals it would never be able to take on on its own. What separates ServiceKey from the rest of the pack, said Swanson, is “how they react on-site and the confidence level they give to the customer.” That’s no small statement given how critical services are to customer satisfaction and partner profitability.

Norcross, Ga.-based ServiceKey, for its part, is profiting from the IT services boom. The company’s sales were up 23 percent in 2011, said ServiceKey President Angela Vines. And it is ramping up for even bigger growth with the hiring of Graham King, a 30-year IT services veteran. King, by the way, sees a services void being created by industry heavyweights tightening their belts at the expense of customer relationships. “I’d like to see services get back to the old-school model where the customer comes first,” said King. That’s just what ServiceKey has done for its solution provider customers.

BACKTALK: Do you have any ServiceKey success stories to share? Contact Steve Burke at steve.burke@ubm.com.

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Silicon Valley Superstar's Departure Is A Big Blow To HP

January 27, 2012

One-time Apple engineering superstar Jon Rubinstein's decision to leave Hewlett-Packard couldn't come at a worse time for the world's largest computer company.

HP confirmed Friday that Rubinstein, the father of the Apple iPod and a one time confidante of late Apple CEO Steve Jobs, has left the building.

Rubinstein's exit comes as new HP CEO Meg Whitman is moving quickly to bring a healthy dose of innovation with a capital I to the company that by more than one account has lost the innovative spark that led to countless product breakthroughs over the years.

Given HP's decision to exit the fast growing tablet market last year, a vote of confidence from Rubinstein to lead a new product development charge at HP would have gone a long way. Remember Rubinstein was given what HP called a "product innovation" role within HP's PC business last July.

It is more than symbolic that Rubinstein's au revoir comes just two days after Apple posted an almost unimaginable 74 percent increase in sales in its fiscal first quarter to $46.3 billion after selling a mind-boggling 37 million iPhones and 15.43 million iPad tablets.

The consumerization technology tidal wave that is Apple is reshaping the commercial computing market at a blinding pace, and HP just lost one of the engineering superstars that helped set that consumerization technology table.

Remember, this is the engineer that received what can only be considered a glowing farewell from the hard-to-please Jobs: "Jon has done an excellent job as a member of Apple’s senior management team, as well as building our world-class iPod engineering team and running our hardware engineering team prior to that," said Jobs at the time.

Rubinstein resigned from Apple in 2006 but stayed on as a consultant until joining mobile device upstart Palm the following year. Rubinstein was CEO of Palm when HP acquired the company for $1.2 billion in July 2010. After the acquisition, Rubinstein became a senior executive within HP's PSG business charting strategy and product development with Bradley.

Rubinstein's departure raises once again all the ugly issues that surrounded the HP board’s decision to disclose last August 18 that it was exploring "strategic alternatives for its Personal systems Group" including "a full or partial separation of PSG from HP through a spin-off or other transaction."

NEXT: Apotheker Gives Short Shrift To HP's PC Business

It is no small matter that Todd Bradley, the executive vice president of HP's $40 billion PSG business, served as the CEO of Palm from 2001 to 2005 before he came to HP. Bradley had a vision for the PC business that included tablets and smartphones when he pushed hard for the Palm acquisition. All of that, of course, was given short shrift by former HP CEO Leo Apotheker.

Bradley and Rubinstein, in fact, were blindsided by Apotheker who informed them both that the company was killing the HP TouchPad tablet and getting out of the Palm phone market only days before a press release was issued.

Whitman, who was a member of the board that authorized the decision to kill the HP TouchPad Tablet and the Palm smartphones, is now trying to pick up the pieces from the Apotheker fiasco. Bradley, for his part, faces the daunting task of rearchitecting product strategy for a business whose most precious engineering asset -- the Palm and WebOS hardware and software development teams -- has been left twisting in the wind.

HP solution providers, meanwhile, are filling in the gaps left by HP's tablet flop by turning to Apple and other vendors.

Bob Venero, CEO of Future Tech, a Holbrook, N.Y., solution provider, says Future Tech will sell thousands of Apple iPads this year. "It's a hot product," he says of the tablet. "There is no question about it. I have never seen anything like it. And it is going to go further than that. I see customers moving to just smartphones where they won't even use a tablet."

Venero, who was disappointed by HP's decision to kill the WebOS-based HP tablet, says he doesn't even travel with a notebook anymore, but instead relies on his Apple iPad. "That's becoming mainstream," he says. "We have customers that are shifting their purchases from notebooks and PCs to Tablets."

Rick Chernick, CEO of Camera Corner Connecting Point, a Green Bay, Wis.-based solution provider and HP partner, said he sees Rubinstein's departure as a fait accompli given the demise of the TouchPad. "They dropped the tablet and WebOS, so what do they need him for?" says Chernick. "I'm just glad they still have Todd [Bradley]."

"I can't sit here and beat myself up over what could have been and what should be," says Chernick of the HP Tablet demise. "I am dependent on my manufacturers to bring me my products to go to market with. I can't apologize for not having an HP Tablet. Nobody has it all. But HP has a helluva lot of stuff going for them."

Chernick also carries the Apple iPad. "HP is 20 times bigger for me than Apple," he says. "But that doesn't mean Apple isn't important."

Important indeed. And becoming more important with every day that passes.

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