Toughbooks: Tough Acts to Follow

For any vendor to take on the establishment, there needs to be a perfect storm blowing in the challenger's favor--and a little luck wouldn't hurt. The vendor needs to catch the market in transition, with a major player weakened and VARs willing to back the underdog's platform.

Well, there's one company that finds itself in such a position today, and that's Panasonic, which has quietly built one of the best brand names in the industry with its Toughbook line of mobile computers.

To capitalize on its momentum, the company's top U.S. manager, Rance Poehler, has set an ambitious goal. He wants Panasonic to become the No. 1 brand sold through distribution over the next few years. Poehler intends to do this by relying 100 percent on partners, releasing a steady stream of innovative mobile wares and recruiting more VARs in vertical markets.

Robert C. DeMarzo is VP/publisher of VARBusiness and GovernmentVAR.

What's fascinating about this story is that Panasonic wedged its way into the mobile-computing space by focusing on government agencies. It was a simple, straightforward strategy. In the process, the vendor built an enviable high-margin business and gave VARs a solution they could sell not only to government but also to commercial accounts.

Poehler contends that Panasonic's Toughbooks sell for a well-worth-it premium over products from Dell, Hewlett-Packard and Lenovo. He says the vendor's laptops have much lower failure rates and are far more durable than competitors'.

Suddenly, everybody wants in on the rugged-laptop space. Dell is selling a ruggedized Latitude ATG (advertised as "one tough traveler"), and Lenovo is stressing how tough its systems are. I'm sure they're all reading the same research reports predicting that the market for rugged notebooks will grow more than fourfold--to $40 billion--by 2010.

What's propelled Panasonic to the top of the ruggedized notebook market is its focus on vertical markets, the power of its Toughbook brand (say "Toughbook" to your average VAR and they'll immediately think of Panasonic), the weakening of Dell and the ThinkPad line's difficult transition from IBM to Lenovo.

So, what do Poehler and Sheila O'Neil, his highly competent channel chief, do now? They both know Panasonic can grow well beyond the rugged category and into business-rugged, or semirugged. Also, the vendor has an opportunity to recruit VARs whose growing discontent with their laptop vendors is propelling them out of the low-end commodity business and into an area with greater returns. Ultimately, Panasonic's could be one of the best stories of 2007.

Speaking of great stories, have you heard about Bluewolf, a 7-year-old VAR founded by Eric Berridge and Michael Kirven? The company has gone from a start-up to a VARBusiness 500 list-maker by focusing on enterprise software and riding the least likely platform: Salesforce.com.

Don't get me wrong. I'm not disparaging Salesforce.com, which makes a great product, but given the company's focus on direct sales, you wouldn't necessarily include it on a list of all-time great VAR partners. Berridge is only 38, so he's clearly a new-generation VAR, but he readily confesses that his young, progressive staff makes him feel old by comparison.

You know that acronym you keep hearing about--SaaS? Berridge lives it. Bluewolf counts Fortune 500 players such as ADP, Dupont and GE among its customers. And while Berridge built the business on the backs of Salesforce.com, Oracle and IBM, he's working now with a group of relatively unknown software firms to further grow the business.

By the way, Berridge says he's not selling enterprise software to CIOs; he's selling them ways to improve their business processes. And he's always selling. He even had a suggestion for me on how CMP could sell more advertising. "Get a great pitch from a great VAR," he said.

Which companies have you been watching lately? There's a great prize for the person who sends me the best tip.