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Fast forward to 2008. IT budgets are tight. Customers of all stripes are looking for improved ROI and are more willing to place a bet on innovative technology that delivers more bang for the buck. The FUD factor doesn't play like it used to. In fact, alternative vendors are being embraced at a record-setting clip. They are growing faster than the big vendors, and there are more of them than at any time in the history of the technology business.
This year's CMP Channel Alternatives Study features 144 alternative companies compared with 96 last year. What's more, the study found that 63 percent of the time customers have no brand preference. That's a big opening for solution providers carrying these vendors. Call it the "attack of the alternatives." Only it's no science-fiction fantasy. It's real.
Just ask Matt Medeiros, president and CEO of SonicWall Inc., and Jack Domme, COO of Hitachi Data Systems. Both have competed for years against two of the biggest, baddest wolves (Medeiros against Cisco Systems Inc.; Domme against EMC Corp.). And both have led their companies to big sales and profit gains by providing more value for customers and more margin for their partners.
With the economy in free fall, Medeiros and Domme say it's easier than ever to compete against industry giants.
"As we see the economy getting pushed closer and closer to a recession, alternatives are being talked about far more frequently," said Medeiros.
Domme sees Hitachi gaining traction in accounts where it was previously tough to get in the door. "Budgets are flat or tight so customers are looking for a solution that saves them money," he said. "A lot of customers are sweeping the floor, [moving] from EMC to Hitachi."
Ron Dupler, president and CEO of GreenPages Technology Solutions, a $120 million Kittery, Maine, solution provider whose Hitachi business is up 100 percent in the past year, said alternatives like Hitachi are winning the day in midmarket accounts trying to find "the best technology solution for their dollar." Dupler said one of the benefits is the higher margins and tighter relationship with the vendor. "Second-tier vendors are more hungry and have richer programs," he said.