Reflections From Comdex, Part 2

Back in the Northeast, in the cold, wet and gray suburbs of Boston, people kept asking me the same question -- "How was Comdex?" Still tired and worn down from the event, it took me awhile to answer the question. It's a giant, sprawling show, so you have to work hard to find what's valuable for you and cut out all the other excess and crap. I think I accomplished that task for the most part. Still, Comdex has some issues. For one, the major technology companies need to step up and offer more than just cliches and rehashes of last year's announcements --- like Microsoft's touting the tablet PC yet again --- and give the audience and attendees more than just commercials -- like Hewlett-Packard's new television advertisements. The show had more formula than a baby food factory.

In addition, the show needs to be built around a theme or two. Wireless, maybe, or perhaps Web services? That doesn't mean that other technologies won't have a place at Comdex. But the show will be able to offer more value if it hones in on one or two major trends or hot technologies. At least attendees will have a starting point, something to lock in on once they arrive in Vegas. Anyway, here's part 2 my experiences at Fall Comdex 2002.+

On Monday, after listening to the morning keynote address from Hewlett-Packard chief executive Carly Fiorina and roaming the exhibit hall for a short stint, I strolled into the next keynote. Well, not exactly strolled. I waited in a long line of people eager to see Scott McNealy, the president, CEO and chairman of Sun Microsystems. I noticed that, like Fiorina's keynote, the seats in the speaker hall are pretty much full, which is a good sign. Still, the keynote addresses were held at the Las Vegas Hilton last year, and I'm thinking perhaps they were moved to a smaller venue at a convention center this year because of decreasing attendance. I didn't have a tape measure with me, so I can't say for sure which venue was bigger -- the convention center or the Hilton. Makes you wonder, though.

I grabbed a front-row seat and, having never seen McNealy speak, was eager to see how the embattled technology icon would respond to the growing criticism that is seemingly coming at his company from all directions -- partners, customers, competitors, analysts, Wall Street and the media. I'm not exempt, either, having engaged in a point-counterpoint with my colleague, senior editor Sonia R. Lelii, over a recent VARBusiness interview with McNealy about Sun's channel struggles. I could probably write an entire column on McNealy's keynote and his press conference, but I'll save his jokes and Microsoft barbs for another time and boil this down for the VARs to keep it from nosebleed-level confusing.

McNealy told the audience about his strategy of "integratable" technology, where chunks of software and hardware would connect together like Lego blocks. It's a compelling idea, but I'm worried for partners. McNealy essentially painted Sun as a high-end Dell, an enterprise technology vendor that manufactures entire systems and solutions in-house and reduces the integration services. "We'll put [the technology together in a Lego block-like environment, and you can take any piece out that you don't like and put someone else's product in," McNealy said. "We assemble this puzzle for you in our factory so you don't have to do it."

Lowering the need for integration services is fine, but where does that leave Sun partners? It's unclear. McNealy said that customers could leverage Sun partners' expertise at the 75 iForce centers across the world and request a system or solution, and then Sun would ship it out. McNealy also said that "services still matter. You can't do all of it in Sun's labs." So it's unclear how involved partners will be in Sun's new strategy.

At the press conference following the keynote, McNealy took questions from reporters. I asked McNealy how the "integratable" strategy would affect solution-provider partners and whether Sun's Lego block manufacturing would cut into the channel's integration work. His response: "How many systems integrators are there for the automobile industry? How many are there for cell phones? Only the computer industry has made things so complicated that there's more people doing integration than R and D."

Huh? McNealy has to be more intelligent than that. Comparing a cell phone to a Unix supercomputer is like comparing apples to cattle. They're not in the same league, let alone the same ballpark. Sure, there's too much time and money spent on technology integration, but his comparison is foolish,and has been repeated way too many times.

McNealy went on with his response, saying that systems integrators under Sun's strategy will still need to engineer business processes and offer consulting around the technology. Thus, Sun will save partners from wasting time on heavy integration and free them up for business process engineering. "That's where SIs can really add value," McNealy said. My question is this: What if those SI partners don't want to change their model?

Back To the Floor

After the Sun keynote and press conference, I toured the floor again. Fewer scantily clad booth babes this year. Fewer game shows and ridiculous light shows and dancers. Not as many people dragging luggage, spilling food and wandering aimlessly through a crowded exhibit hall. Instead, more interesting companies popped up.

Exact Software, a division of Netherlands-based Exact Holding, showed off its e-Synergy ERP solution that is designed to fully integrate with front-office applications via an XML interface that offers real-time views of all connected applications. Exact recently launched the product in North America and is now coveting channel partners focused on midmarket ERP solutions.

Some technology vendors chose not to have a booth at the convention center and instead set up shop at a nearby hotel suite or restaurant. Best Software, for example, displayed the newest version of its SalesLogix CRM software for the midmarket. Without a doubt, the small and midsize business market for CRM is one of the most competitive areas in the industry right now, with established vendors going up against Microsoft's soon-to-arrive product, as well as enterprise vendors looking to mine new markets downstream. SalesLogix 6.0, released last month, features both Java and Microsoft .Net support, a new sales client user interface, an "AutoSync" component that synchronizes mobile users' data, and improved Web client technology.

Another interesting company outside the exhibit hall was Voodoo PC, which had probably the most impressive technology I saw all week. The Voodoo PC E-Class InterCool is the company's flagship gaming system, with good reason. The E-Class runs virtually silently and features the new "Voodoo InterCool System," a cooling system that combines the circulation of both liquid and air. (The InterCool System is fun to watch, too, via the glass panel on the sides of the box.) The PC also features Intel Pentium 4 processors as well as Voodoo's own disaster-recovery software and cabling system. Probably the best compliment I can give the E-Class Intercool is this: When I first walked by the system's monitor, I stopped to look at the screen, which I thought was playing a DVD of the movie "The Matrix." Needless to say, it was a game, not the real movie. Impressive. Most impressive.

Chips, Guns and Roses>/b>

Comdex always has some big celebrity appearances, but seeing Slash, the former Guns and Roses guitarist, on stage with AMD CEO Hector Ruiz during Ruiz's keynote Wednesday was truly a sad day for rock 'n' roll. How far the mighty have fallen. If you think that Guns and Roses would have pulled a cheap corporate sell-out of this proportion 10 years ago, then you've done more drugs than Slash. First, Axel Rose wheezes his way through a supposed Guns and Roses comeback, and now this. Just horrendous. To top it off, one of my colleagues got to meet Oscar-winning actor Kevin Spacey, one of my favorites, at the show and procured an autograph as well. I, of course, missed out and, consumed with envy, almost threw myself off the fifth floor of the Hard Rock Hotel. At least I have the new "Glengarry GlenRoss" DVD to look forward to.

Where was I? Oh, yeah. AMD. I don't even remember what Ruiz spoke about, I was so taken aback. Something about how the industry needs to stop pushing boundaries for the sake of technology and focus more on customer needs. Not real big news.

News was scarce at the show, but Xerox and EDS offered a pre-briefing of a major announcement that was actually announced the week after Comdex. The two companies recently formed a strategic alliance that makes EDS the official systems integrator for Xerox enterprise products. The second largest solution provider in the world, which manages more than 3 million desktops, will add Xerox printers, copiers and fax systems to its managed services capabilities, while Xerox will become EDS' preferred supplier of print, copier and fax technology as well as related services. EDS will also lead on new deals by reselling Xerox products and offering "Managed Output Services."

"The number of customers we see with fancy new digital copiers and printers that don't have the proper network integration or connections is huge," said Jerry DeAngelo, senior marketing consultant at EDS. "This offering is about filling that need for help desk, support, management and integration services."

The partnership, however, seems more like an outsourcing deal than a strategic alliance. Essentially, Xerox has awarded EDS with a mammoth outsourcing contract by handing over the majority of its enterprise integration services business to EDS. While Xerox will still offer break/fix and maintenance services, EDS will be the "point of responsibility" for all integration, management and network issues, DeAngelo said.

A year ago, the two companies made a similar outsourcing deal: Xerox gave EDS a $1.5 billion contract extension for five years that made EDS responsible for Xerox's worldwide computer and telecommunications network (oh yeah, one other thing -- last year's agreement also included a curious provision that EDS would dismiss all litigation against Xerox). Now, it seems that in addition to its own systems, Xerox is going to let EDS manage Xerox customers' systems, too. Looks like a great deal for EDS, which is becoming an even more dominant power in outsourcing and managed services, but I'm not sure why Xerox is passing off the big bucks of enterprise integration services.

So that's pretty much it. There's probably more information and data that I soaked up like a sponge, but right now it's buried under a long Thanksgiving weekend, multiple football games and visions of casino chips for Christmas. I will say that Comdex was a more effective show for me this year than a year ago. More attendees had an agenda and were truly seeking out new vendors and cutting-edge products. More vendors actually had compelling technology -- and they displayed it more this year instead of relying on booth babes and light shows. Lots of activity around wireless, instant messaging, storage and Web services. And many people that were optimistic about 2003. We'll soon see if Santa Claus delivers.