Annual Report Card: The Best & The Worst

Going into 2001, Infogain faced many of the same challenges confounding other solution providers. Headquartered in Silicon Valley, the 11-year-old IT consulting company was struggling to grow its business and brace for what looked to be a hard landing from the New Economy boom of the late 90's. Then, during the holiday season, something most unfortunate happened.

Practically overnight, Infogain saw its leads from enterprise software players dry up almost completely. Even more distressing was that, for the first time, Infogain suddenly found itself competing for smaller accounts against Big Five consulting firms coming down to the midmarket. Compounding the company's woes was a shift in strategy on behalf of several software companies and other large technology vendors. Instead of trying to help Infogain, those companies were suddenly pushing their own professional services businesses into territory previously held by partners.

Unlike other solution providers, however, Infogain has managed to survive the many challenges facing the company. Mike Pinette, vice president of corporate development at Infogain, attributes his company's survival to its expertise in midmarket solutions for CRM and business intelligence, and its solidification of partnerships with channel-friendly vendors such as PeopleSoft and BEA Systems. "If we were a one-dimensional systems integrator," he says, "we would not have survived."

Given the current uncertainty in the economy and the increased conflict solution providers are encountering with vendors, choosing a vendor partner has never taken on such importance. Choose wisely, the way Infogain has, and success can still be attained. Choose poorly, however, and expect to run into trouble or conflict--at the very least.

To help guide you, we present the 2001 VARBusiness Annual Report Card (ARC) issue, the industry's largest and most comprehensive ranking of vendors by you, their partners (see scorecard and methodology on page 26c). Take a look at which vendors are addressing increased channel conflict, and which ones are merely giving it lip service.

Although many vendors downplay the shift from product to services while reaffirming their commitment to the channel, there is some evidence to the contrary. Consider that 10 vendors included in this year's ARC--IBM, HP, Compaq, Oracle, Dell, Sun Microsystems, Sybase,

Novell (through the Cambridge Technology Partners merger), Computer Associates and NEC--are also members of the top 100 solution providers, according to this year's VARBusiness 500 listing. Some of the same vendors saw their standings in this year's ARC slide because of low partnership scores.

In addition, industry experts say that, despite the IT spending drop-off, services are still in high demand. International Data Corp., for instance, reported recently that the worldwide IT services market is strong, even while the U.S. economy falters. IBM, which boasts the biggest solution provider in the business with IBM Global Services, saw more revenue in 2000 from services than from its hardware or software product lines. Compaq and HP are two recent examples of tech vendors trying to emulate the success of IBM. Now that they have agreed to pool resources and merge operations, one can only wonder how many partners will be negatively impacted by the combined company's efforts to grow its services empire.

Part 2: IT Disservices?

Part 3: No Other Choice

Part 4: Battle for the Midmarket

Part 5: IWeb Services Scare