The Ties that Bind: Dealing With The Interconnected IT Universe

Carolyn A. April

is executive editor of VARBusiness.

Not so in this interconnected IT universe where everything impacts everything else. These days your expertise in IP telephony, for example, not only requires that you understand how to integrate voice with other forms of data communication, like messaging and live meetings, but also necessitates knowledge of network security and application integration.

I was talking with a VAR about this very topic the other day. The level of sophistication involved in today's solutions and how one product's implementation greatly impacts all others has meant big change in his business. For years a phone system specialist, this VAR now wades in the world of unified communications, where the phone system is just one spoke on a wheel that consists of myriad other applications.

To evolve with the times, this particular VAR hired dozens of data engineers to deal with the convergence tsunami. He has also encountering elongated sales cycles brought on because solutions are more complex and require presales technical assessments upfront.

Which brings me to how he's altered his business: He's charging for presales work, including things like performing a full network and security assessment before putting an IP telephony system in. And if the customer balks ("Oh, don't worry, our network is just fine"), he makes them sign a waiver. If the phone system degrades in performance due to bandwidth issues on their network, for instance, it's not his problem if they don't let him assess things first.

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The positive in all this? Sophisticated, multidiscipline solutions give you a chance to provide real value-add and also gets you on the coveted consulting and services bandwagon.

How has the interconnectedness -- and interdependency -- of IT impacted your business? Write to me at [email protected].

Managed Services: How Do You Stack Up In the Trust Department?
April 11, 2007

The following is a cautionary tale for solution providers already doing managed services or looking to get into it. It's not meant to send you running from this particular business model, but it raises a significant issue: the trust factor.

Imagine this, for a moment: One morning, a technician wakes up, goes to work and hatches a plan. He works for an MSP that develops and manages grocery store inventory-control systems, remotely maintaining and updating those systems for clients spread across several time zones. He is a disgruntled employee, ticked because his boss has changed the employee bonus structure. In retaliation, the technician resorts to IT sabotage -- he inserts a malicious bit of code into the inventory-control software developed by his employer and installs it on all of its clients' networks.

You can imagine the result. Grocery chains open for the day, employees there boot up the inventory-control software being provided as a service by their MSP and, well, system crashes ensue. The MSP then spends two days putting out fires and placating angry customers whose systems were offline for two days.

It's a true story, according to Dawn Cappelli of the Computer Emergency Response Team (CERT) at Carnegie Mellon University's Software Engineering Institute. The point of telling it? Managed services means 24/7 access to your customers' networks and all that goes with them. Security is paramount. And so is trust. To make it with this business model, customers have to know that you are guarding their networks, data and systems like they are your own.

So how do you do that, short of any official Good Housekeeping Seal of Approval -- as yet -- for MSPs? Clearly, reputation is going to be crucial. And hiring the right people. I'm compiling a list of MSP horror stories and best-practices tips for an upcoming feature story. Let me know of any MSP shenanigans you have witnessed or heard about. And please tell me how you have succeeded in gaining the trust of your customers.

Write me at [email protected].

Update On Palmisano's PartnerWorld Plans
April 10, 2007

Just a short update to yesterday's entry on Sam Palmisano's trip to PartnerWorld. Turns out Big Blue's CEO will be giving the keynote speech at the event in St. Louis on May 1, not a brief fly-by stage appearance. So, partners, stayed tuned to see what he has to say and, more importantly, what he might have to offer.

On that note, more than a few of you e-mailed me some readymade questions for Sam P., which I have included below:

"In the future, is IBM looking in SMB for many small boutique partners that carry IBM as a small part of their business, or...is there a model where IBM sees partners remaining IBM-centric, and profitable?" -- Dan Lowery

"What will be the future importance and role of Business Partners be within IBM? Will there still be a 'Business Partner Charter'?" --Heinz-Paul Bonn

"I left IBM in January after 18 years at IBM. In my new capacity, I am amazed at how difficult IBM is making it for VARs to do business with our clients in the X-Series space. I would like to understand what IBM is doing to simplify the process for ordering, checking inventory, extending special bid pricing, etc. HP and other OEMs seem to get it, but IBM is way to slow to react." -- Mark E.

Keep the questions coming. Write me at [email protected].

Palmisano Heading to PartnerWorld
April 9, 2007

He's increasingly unheard and unseen around the industry. But Sam Palmisano, IBM's elusive-of-late CEO, is apparently planning to grace partners at Big Blue's annual PartnerWorld conference in St. Louis, an IBM official confirmed this week.

Palmisano, who has not attended PartnerWorld in three years to the consternation of more than a few, is expected to appear on the show's third day, May 1, during the morning's main session.

We don't know what Sam has planned -- a full-fledged keynote, a brief appearance on stage or some back-room time with key partners? Regardless, we want to know what you'd like to hear from one of the most powerful execs in the IT landscape. Better yet, given the chance to sit with him one on one, what would be your No. 1 question or request?

It's your turn. What do you want to ask IBM's top dog? Send your questions to me at [email protected].

Getting A Grip On The Printer Channel
April 3, 2007

In dishing out a cool $1.5 billion to buy mega-VAR Global Imaging this week, Xerox engineered -- in one fell swoop -- a major offensive into the SMB market it has long coveted.

The deal, if approved, also sports significant implications for the channel -- for one, it's the biggest example to date of a major printer vendor buying up either one of its own dealer partners or a competitors' solution provider.

Up to this point, Tampa, Fla.-based Global Imaging hasn't sold Xerox at all. It deals in products from just about every printer and document management vendor in the marketplace today except wares from the company seeking to become its parent. That alone makes this acquisition quite interesting.

But a couple thoughts come to mind; first off, how does Xerox avoid channel conflict between Global's army of sales people and the current stable of Xerox dealers and VARs serving the SMB space? Secondly, how long before Ricoh, Toshiba, Konica Minolta and the rest of Global's printer suppliers decide they don't want to be giving their money away to rival Xerox? (Best guess: when their contracts with Global next come up for renewal.)

Jim Firestone, president of Xerox North America, tried to address the channel conflict issue this week, acknowledging at the outset that not all channel conflict can be avoided. He outlined Xerox's three-pronged approach to the SMB market, which, he contends, makes room for many. First off there's Xerox's traditional agent program; there there are the IT resellers that predominantly sell printers today but whom Xerox is looking to train on more sophisticated document management solutions; the last leg of the stool is Global Imaging, which will operate as an wholly owned subsidiary of Xerox and continue to carry other vendor brands (for the time being).

The question is this, why buy the company to get into the SMB space instead of getting them to carry your products as a channel ally? Turns out that was the original idea.

"We started talking to Global about a distribution relationship," Firestone explained. "But we realized there was a bigger prospect here. Global's local presence in the document industry is where we can leverage their sales, services and support was easier to evolve with them in-house."

Taking control over your channel is a trend moving across the printer industry today, according to Keith Kmetz, industry analyst at IDC in Framingham, Mass. Kmetz cites recent moves by Toshiba and Sharp to acquire several of their own dealer partners and setting them up as part of their direct sales operations.

"I think we will be seeing a lot more of channel acquisitions by vendors [in the printer space]," Kmetz said. "There's no question that vendors want more control over the channel and better control over distribution."

This could be an ominous sign for channel partners from a competitive standpoint, though some, like Global, welcome the chance to become part of an even larger vendor. Yet there is one potential benefit to solution providers from this particular deal: The chance to take on other printer products.

When Ricoh or Toshiba eventually pull up stakes from Global, they'll most likely be looking to woo new channel partners in the local SMB spaces that Global plays so largely in now. VARs that have steered clear of entering the market where Global has dominated will now have a shot.

From Xerox's perspective, acquiring Global Imaging gives it a huge boost in its attempts to crack the SMB space, where Firestone acknowledges the company is under-represented. The bigger question, perhaps, is what such major vendor/solution provider acquisitions means to the face of the printer channel long term.

Please share your thoughts with me at [email protected].