2007 CRN Channel Champions: SystemsComponents

COMMERCIAL DESKTOP PCs

HP finished ahead of Lenovo and Acer in the 2007 CRN Channel Champions survey for commercial desktops, sweeping the three criteria subcategories: technical, program and support, and financial. The vendor finished first in 16 of the 19 different individual criteria considered. Its overall rating was 67.7, compared with 63.6 for Lenovo and 62.6 for Acer.

Dave DelVecchio, president of Innovative Business Systems, an Easthampton, Mass., solution provider, is not surprised.

"HP desktops have historically done very well for us with reliability and performance," he said. "And HP finally is playing to its strengths in relation to other companies. Their Smart Buy program is the smartest thing they've ever done."

HP's Smart Buy allows customers to choose from a few standard configurations, which allows the company—and by extension, VARs—to compete more effectively, DelVecchio said.

"They've built economies of scale that the build-to-order companies can't touch," he said. "For the 90 percent of PC buyers that can count on three or four configurations, it's great. It gives them a solid configuration with above-average quality hardware at a price point the other companies can't touch."

Customers that used to get sticker shock from HP quotes are now considering the vendor's products, DelVecchio said. "The opportunities where HP is a good fit have gone up dramatically," he said.

The solution provider recently closed an 11-system deal, replacing Gateway machines that were built to order, due to HP's supply chain dominance, DelVecchio said. "We got a Smart Buy configuration shipped from Ingram Micro. We'll have them in the end user's hands in less than 24 hours," he said.

Jim St. Louis, sales manager at CC Technology, Highlands Ranch, Colo., also said Smart Buy has been a differentiator for his HP business this year. "It hits the sweet spot of configuration and price for us," he said. About 95 percent of HP systems sold by CC Technology now are Smart Buy SKUs. "They're generally pretty available through distribution, and there's almost always one [configuration] that will work [for customers]," he said.

— Scott Campbell

Next: Notebooks NOTEBOOKS

You could say last year was a monumental one for Hewlett-Packard's notebook business as much for what didn't happen as for anything that did.

While almost of all HP's rivals in the notebook space suffered from the exhausting, near-industrywide recall of notebook batteries, HP did not have to recall a single notebook because of what it said was the strength of its engineering and design to prevent overheating issues.

With the addition of EVDO and EDGE wireless connectivity, slimmer and lighter designs and without the glare of negative spotlight from a product recall, HP shot to the No. 1 position in notebooks in this year's Channel Champions survey.

Of the six vendors ranked in the notebook space, HP ranked first overall and was rated first in both the program and support category and in the financial category, which measures how profitable a company's product line is for its solution providers.

HP's overall rating of 68.9 bested Lenovo's score of 67.9. Sony was third with a 65.3 rating, followed by Acer (64.8), Toshiba (64.6) and Panasonic (63.6).

HP ranked second in technical criteria to Lenovo, scoring 86.6 to Lenovo's 87.2.

"[HP does] make a great notebook," said Dan Hogan, vice president and COO of DSR, an Elkridge, Md.-based solution provider. "We certainly have found very low repair rates on the HP [models]. The prices are extremely competitive."

Hogan said HP also has beefed up the marketing behind its notebook brands, and that effort has gained traction at the right time. "They really are solid machines," he said. "And that's what businesses are looking for."

Stan Jensen, president of Associated Data Products, a Shreveport, La.-based solution provider and HP channel partner, said the breadth of HP's offerings is also useful.

"I think their product line is well-positioned from the high-end notebook down to the low-end notebook," he said. "I think they are very profitable."

Jensen said HP, which was among the first tier-one vendors to supply broader product lines using processors from Advanced Micro Devices, helped its own cause by providing notebook lines with both Intel and AMD chips. Beyond the box, Jensen said, HP has been a strong partner.

"For resellers, they have a really good presales program," he said. "If you have questions, you can get answers in a very timely manner. For resellers, that's important."

— Edward F. Moltzen

Next: SMB Volume Servers (<$25,000) SMB VOLUME SERVERS (<$25,000)

Hewlett-Packard's impressive scores in server price for performance enabled the No. 1 computer maker to edge out IBM for top honors in SMB/volume servers.

HP's price for performance satisfaction rating came in at 89, compared with 81.6 for IBM. Overall, HP scored a rating of 72.3, compared with IBM's 71.7.

Some solution providers said HP handily beats IBM on price for performance, coming in sometimes at 20 percent less than IBM with comparable or better performance on servers. HP also is beating Dell on price for performance, solution providers said.

"It is not uncommon for us to go into a business that has all Dell desktops and servers and switch them to HP servers because of the better service and support we are providing," said Rick Chernick, CEO of Connecting Point Computer Centers of Green Bay, Wis. "The message coming back to us from customers is HP is priced better with local service and support."

HP is on a roll, providing better products and programs than rivals, Chernick said. "The product is No. 1, and everyone wants it," he said. "We are on the top of a tidal wave."

Chernick said HP is doing a better job listening and partnering closely with solution providers than other vendors. "They are always looking at how they can get bigger faster, and more importantly they are asking resellers, 'What can we do to improve?' I love that."

HP also scored big in the last year's increase in sales assessment with a rating of 59 compared with IBM's 56.7 rating.

"They properly align the resources for us to grow the business," said Pete Busam, COO of Decisive Business Systems, a Pennsauken, N.J.-based HP solution provider. "It is that simple."

Busam said Decisive's HP server sales grew 25 percent in the last fiscal year.

"We have never gotten any attention from IBM," Busam said. "We are not a volume player for them, so they didn't take an interest. What HP did was very smart. They saw where we were, looked at some trends early on and worked with us to help grow the business," he said. "We continue to grow with the product line. We have gone from 50 percent HP servers to 100 percent HP. We have not sold anyone else's server in the last nine months. Anyone that asks for IBM or Dell, we convert them to HP."

&#8212; Steven Burke

Next: Midrange Servers (>$25,000) MIDRANGE SERVERS (>$25,000)

Hewlett-Packard bested rivals IBM and Sun Microsystems with strong scores in product quality and reliability, and price for performance to capture the 2007 CRN Channel Champions award for midrange servers priced more than $25,000.

HP's overall satisfaction scores came in at 75.4 compared with 72.6 for IBM and 69.2 for Sun. In the product quality and reliability area, HP scored 96.1, compared with 92.3 for IBM and 90.1 for Sun. When it came to price for performance, HP scored 84.5, compared with IBM's 81.2 and Sun's 77.8.

Don Richie, president of Sequel Data Systems, an Austin, Texas-based HP-exclusive enterprise solution provider, said HP's dominance in the midrange category is not surprising given its engineering legacy. "The reason you are seeing this number is HP has gotten back to its roots, which is engineering expertise and quality," Richie said. "The reason we are winning against IBM and Sun is there is simply no other company out there that has the product or services breadth that HP has. No one can compete with HP technology."

HP also dominated when solution providers were asked to rate vendors according to their increase in sales with the company over the past year as well as when thinking about the projected sales increase over the next year.

Richie said his HP sales in 2006 were up 44 percent, with business-critical server sales up a whopping 265 percent. "Many of the things HP is doing is really paying dividends," he said. "They are really listening to partners."

Sam Haffar, president and co-CEO of Computex, a Houston-based HP partner, said he sees IBM and Sun as nonissues in most enterprise accounts. "HP has better engineering, better quality control and better price/performance," he said. "You get a lot of bang for the buck with HP." For the first quarter, Haffar said Computex's HP business was up 55 percent.

HP also bested IBM and Sun when it came to perceptions about services attach rates, scoring 59.4, compared with 55.2 for IBM and 51.7 for Sun. "Nine out of 10 of the servers we sell have HP CarePaq services attached," Haffar said.

He also praised HP for its tight joint sales engagement activities with his company. "We are engaged at all levels with HP from presales to post-sales support," he said. "HP is in a league of their own."

&#8212; Steven Burke

Next: ClientServer Processors CLIENTSERVER PROCESSORS

Intel edged out Advanced Micro Devices for the Channel Champions title in client and server processors, but its margin of victory narrowed from last year.

Intel achieved a composite score of 73.2, 1.4 points higher than AMD's score. But that's almost half the 3-point margin Intel recorded over AMD last year.

Some solution providers were surprised that the gap is narrowing.

"Intel has been hitting on all cylinders lately. Their new product has been very well received by the channel, and they seem to be coming up with unique ways to position their platforms against the competition, such as vPro," said Todd Swank, vice president of marketing at system builder Nor-Tech, Burnsville, Minn.

Intel led in two out of three subcategories considered in each Channel Champions category. In channel programs and support, it earned a score of 74.4, sweeping all the individual criteria.

It wound up with a score of 62 points in the new subcategory that measures partner satisfaction with financial criteria such as services attach rate; margins; rebates and spifs; ROI; increase in sales and vendor's share of sales.

AMD scored 72.8 for channel programs and support, and 59.7 for financial criteria.

In technical satisfaction, Intel prevailed over AMD by 3 points in the most heavily weighted area in the survey, product quality and reliability.

But although Intel recorded sizable victories in four out of five technical criteria, AMD tilted the scale in its favor, besting Intel by more than 10 points in price for performance, the second most heavily weighted criteria in the technical category&#8212;and an area in which AMD has traditionally been strong. That showing helped AMD beat its rival by three-tenths of 1 percent in overall technical satisfaction.

"I have no doubt that Intel will win this title again," said Jeff Di Bella, vice president of sales at system builder AOpen Center, Gaithersburg, Md. "Its products, pricing and reseller programs are far superior to those of AMD."

But AMD, which scored higher than Intel in financial criteria such as the typical partner's ROI (on the vendor relationship) and a partner's projected sales increases both for last year and next year, is an increasingly good bet for the channel, another system builder said.

"&#91;AMD will&#93; definitely continue to be competitive," said Brian Corn, vice president of marketing at SourceCode, Waltham, Mass. "People think they've had one bad quarter, and people really are quick to think AMD is &#91;in trouble&#93; but they're still in the game," Corn said. "They'll do great things with Barcelona &#91;AMD's upcoming quad-core processors&#93;."

&#8212; Paula Rooney