Top 10 Things You Need To Know

Nearly five thousand surveys. Seventy-five vendor programs. Eighteen product categories. These are just some of the numbers behind VARBusiness' 2003 Annual Report Card. But numbers alone don't tell the entire story. After all, there is a real person with a real business behind each fact, figure and finding we've uncovered. Each year we ask you, members of the solution-provider community, to share with us your impressions of vendors' partner programs. Each year, you kindly oblige, telling us with whom you are satisfied and why. We study these impressions carefully, pulling from them the common threads that weave together to form the fabric that makes up partner psychology today. In the following pages, we pinpoint why some companies fare better than others, and which ones you think stand the best chance of growing their businesses in 2004. Read and enjoy.

Top 10 Things You Need To Know
Highlights and insights from the 2003 Annual Report Card

1 Singular Sensation: Samsung
No single company received higher marks in partner satisfaction than Samsung, the 2003 ARC winner in display technology. Its overall score of 85 topped 43 other companies this year. In displays, Samsung swept everything--sweet, considering its fourth-place finish last year.

2 Stocks To Short
Do partner satisfaction levels indicate where vendor share prices may go? In some cases, they actually do. Consider this: In 2000, before the bottom fell out on Sun's server sales, the company's partner-satisfaction levels fell to new lows in our Annual Report Card study. Then, the company's shares began their miserable slide. Not until after partner satisfaction improved did Sun's business stabilize. So what do this year's ARC study results suggest? Well, you may want to reconsider your investments in Novell and/or Veritas. Both companies have hit recent 52-week highs on Wall Street, and both saw ARC scores slip in 2003. Time to go short?

3 Dell Disasters
In contrast to Samsung, no company fell lower in this year's ARC as Dell, which won the entry-level server category one year ago. This year, the PC maker came in last in three categories: entry-level servers, advanced desktops and workstations, and mobile computing. Worse yet, its partner-satisfaction scores were among the absolute lowest in the entire ARC study. Dell's partners blasted the company for channel conflict, poor communication and lousy sales support. Maybe next year Dell will think twice about those nasty calls to those who dare refer to themselves as "authorized Dell partners."

4 Score For IBM
Several vendors in this year's ARC won multiple awards. Microsoft won three top prizes, while HP took top honors in two categories. But the big winner for 2003 was IBM, which scored wins in four categories: mobile computing, midrange servers, network storage and storage management software. If IBM minted pennies, we bet it would put those results on every one.

5 Blissful Seasons
Many VARs are realigning their product portfolios, but half of those who completed this year's VARBusiness Annual Report Card survey said they have been with their vendors of choice for five-plus years. That beats many marriages.

6 Out Of 10 VARs Make Greenspan Smile
The overwhelming majority of VARs surveyed for the ARC study are feeling good about the future, at least as far as sales of their ARC vendors' products go. Nearly two-thirds, for example, say they expect business with their ARC vendors to increase in the coming year. That's more than double the percent that think business will remain the same and 10 times the number that expect business with their ARC vendors to decrease. Finally, something that even Chairman of the Federal Reserve Alan Greenspan can smile about.

7 Years Of Bad Luck
Sun and HP can't get a break in midrange servers, where they've lost the Annual Report Card award seven straight years. Since 1999, IBM has triumphed. Before that, it was SGI.

8 Reasons Why Cisco Loathes Alcatel
Alcatel dethroned Cisco in this year's ARC communications networking solutions category. The French giant won top honors in eight areas measured: richness of features/functionality, presales support, marketing support, partner portal, sales partnering, communication, managing channel conflict and ease of doing business. Partners may be cutting back on Mo%EBt, but not on French technology.

9 Out Of 10 Wins Determined By Support
Conventional wisdom says the vendor that is most innovative or enjoys the highest loyalty probably has the most satisfied partners. But the results of this year's ARC study paint a slightly different picture. The surest way to win the hearts and minds of allies is to provide top-quality sales and technical support. This year, the companies that won the support subcategory went on to win their overall ARC categories nearly 90 percent of the time. That was more than either loyalty (83 percent), product innovation (78 percent) or partnership (67 percent). If you want partners to cheer, upgrade your support.

10 Closing Thoughts
Few things are a perfect 10, but some are close. To help with the ARC study, Symantec provided a list of 1,000 partners. Nearly every entry was accurate. But perfection may be overrated. Sun's list of workstation partners was awful, yet it still won in that category. More observations worth pondering: The single-lowest score recorded in the study went to AT&T in ease of doing business. Ironically, it won the overall business class IP and data services category; Sun's rebates and recognition programs helped improve its scores this year; Western Digital's sweep in desktop disk drives is that company's second in a row; the most loyal allies in IT are IBM iSeries partners; one wonders what will happen to Network Associates, which held onto third place this year in security, now that its top channel executive has moved on; try as we did to include Avaya and Sybase, we couldn't due to lack of partner response; and partners said HP's management of channel conflict in printers was nearly as bad as Dell's efforts in mobile products. Next year, we may add secure ID management to the ARC study, so stay tuned.