Will VARs Benefit From All These Big Deals?

Over the past few weeks there have been a flurry of deals that promise to reshape at least a good portion of the IT landscape. You've no doubt seen the stories on our Web site about IBM's proposed $5 billion takeover of Cognos or the move by oil-rich Abu Dhabi (of the United Arab Emirates) to grab 8 percent of chip maker AMD, or even CA's plan to ship development of its entire threat management software line to India's HCL Technologies. In the meantime, Dell has been pumping up its software portfolio with purchases of Everdream, a remote software management firm, and SilverBack, a managed services software operation. What do these moves really mean for the average solution provider, and what should you be telling your customers?

ROBERT C. DEMARZO Can be reached via e-mail at rdemarzo@cmp.com.

Well, let's start with the timely $622 million AMD received from an investment arm of the Abu Dhabi government. Nearly a month ago amid great fanfare, AMD ushered in its most promising microprocessor—the quad-core Opteron—and within short order posted a third-quarter loss of $396 million along with the disclosure it had amassed some $5.3 billion in debt. So the investment provides a banker with deep pockets and gives AMD some needed breathing room as it attempts to ramp up production and sales of its new chip. Either way, the investment should instill confidence in solution providers who recommend AMD's products to their clients—at least for now.

Over the past few years, solution providers have been concentrating on selling software solutions in search of margin-rich opportunities. So IBM's decision to acquire $979 million Cognos is an important move for two main reasons. First, the Canadian company was a leader in producing business intelligence software. Second, Cognos was adept at partnering—it has nearly 3,000 alliances—with large global integrators like Accenture and Deloitte, but was not as successful with the mainstream channel. Once IBM gets its hands on Cognos, you can bet it will bring more solution providers into the fold as it grows sales to midsize customers. The only downside here is that the channel has not yet seen a major benefit from IBM's other major software acquisitions, Internet Security Systems and Rational.

While many have expected more progress from CA in the channel, its decision to have HCL take over development of its threat-management software products is mixed news for VARs. Now the security software portfolio will get the attention it deserves, and CA will maintain all sales and marketing activities with veteran George Kafkarkou running the security channel. However, the move is likely to raise more questions among solution providers already leery of CA's commitment into this space.

Read my take on Dell's recent deals and other M&A activity at www.crn.com.

What do you make of all these deals? let me know.
CMP Channel Editorial Director Robert C. DeMarzo is at rdemarzo@cmp.com.