Vendors, VARs: On-Demand On Track, But More Needed

During a keynote panel discussion at the XChange conference in Orlando, Fla., which is sponsored by CRN parent company CMP Media, several vendors and solution providers said providing 24x7 uptime and access to data and transactions is now a vital part of technology channels.

"I would submit that we are already in an on-demand world," said Mike Twomey, vice president of channels and business development at IBM software subsidiary Tivoli. "When we moved from surfing the Web to doing transactions on the Web ... we moved to an on-demand world where local companies can compete with global companies. But they need to do so on a 24x7 basis."

Twomey was one of several members of the panel who suggested the move to on-demand computing has been more subtle than many believe.

"Let's look at the small-business customer out there today," said Allison Watson, vice president of worldwide partner marketing and sales at Microsoft. "It means that anything running my business doesn't go down. ... A small business might say, 'On-demand is I'm able to do what I do.' "

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Kevin Carlson, CTO at Verteris, an information solution provider based in Atlanta and another member of the keynote panel, said his company adopted an on-demand strategy about eighteen months ago and, to date, it's been profitable. His company, which began as a software provider, provides information-access solutions that focus on the securities litigation field.

Carlson said, though, that he hopes other technology providers will work to adopt common standards that would make transitioning customers easier.

"I would like open systems," he said. "I know it's a long way off. Businesses are competitive."

While IBM has been trumpeting the idea of utility computing since last year, Twomey said that doesn't mean computing giants such as IBM Global Services and EDS will suddenly make a play to host many more accounts.

"Probably 10 percent of the customers will choose to fully outsource their computing capabilities," Twomey said. "We think the sweet spot, where the most transactions will occur, is on bundled solutions that will be owned and operated by the customer. ... That's where the business partners play a role. They will bundle the hardware, the software, the processes around system management. I don't envision a world where all the great outsourcers own all the computing resources."

The XChange conference opened up amid signs that the long-struggling PC industry may be showing signs of renewed strength. Last week, chip maker Intel reported better-than-expected sales for the current quarter, fueled in part by sales of its new Centrino mobile processing platform.

"Once you have wireless, you can't go back," said Shirley Turner, Intel's director of channel marketing. "But from a security standpoint, once you pass that hurdle your definition of on-demand will absolutely be a consideration."

The ability to access data around the clock remotely and wirelessly will grow hand-in-hand with keeping that access secure and reliable, Turner said.

Many solution providers in the audience said they also see the opportunity in working toward an always-on service model, but some said they had concerns about working on such a new model with vendors--such as IBM and Hewlett-Packard--that also have direct-sales models.

Tivoli's Twomey disputed the idea that direct sales would be a growing threat.

"Our business partner sales are growing [at a] double-digit [rate]," he said. "Our direct sales are growing single-digit."

"The customer doesn't care how you are providing the solution," said Tommy Ryan, a principal in ThreeWill Consulting, an Alpharetta, Ga.-based solution provider, after the discussion. "They just want it cheap, and they want it reliable."