Briefs: November 14, 2005

HP: POLICY CHANGE FOR SPECIAL BIDS

The changes pertain to special pricing deals on HP&'s enterprise products including OpenView, and server and storage products, said Tom LaRocca, HP&'s vice president of partner development and programs, Americas Solution Provider Organization. Previously, HP enterprise partners and enterprise distributors shared 8 percent of list price on Big Deals.

Solution providers said there was little incentive to refrain from heavy discounts because margins were based on a percent of list no matter the final selling price. But LaRocca said payments will now be made on a sliding scale based on a matrix that takes into consideration actual end-user pricing as well as the category of products sold. He said under the new system, solution providers and distributors could increase margins by “50 percent to 100 percent” over the old formula.

MICROSOFT PREPARING ONLINE LICENSING ADVICE TOOL
Microsoft is taking big steps into the licensing consulting space now served by many large-account resellers. This week, it plans to launch an early version of a new online service called Microsoft Product Licensing Advisor to help IT users make product selections, find the most cost-effective license types, and configure and price out solution configurations.

In Phase I, which will go live in the United States later this month, customers will have access to a U.S. call center and basic licensing program comparison and guidance, a License Trainer wizard and a basic product selection service, including a downloadable configuration and list price estimate, Microsoft said.

Phase II, which begins in January, will provide up-to-date information about new product use rights and new Software Assurance benefits that become effective in March.

And during Phase III, when the site launches globally next spring, Microsoft will assist users in quoting an entire business solution and offering optimal product scenarios.

Brent Callinicos, corporate vice president of worldwide licensing and pricing for Microsoft, acknowledged the company seeks a more direct relationship with customers to resolve 80 percent of most common licensing questions but asserted that its software asset management partners will handle the last mile—the 20 percent of value-add and customization. He also said Microsoft will not handle product fulfillment and will not work directly with procurement officers.

GOOD PUSHES BETTER MOBILE SECURITY WITH MCAFEE DEAL
Good Technology plans to bolster its mobile security line with new software for wireless security and a deal to distribute McAfee antivirus software over the air to handheld devices.

Designed for use with Windows Mobile Pocket PC, Smartphone, Palm OS and Symbian platforms, the Good Mobile Defense software lets IT staff remotely manage security on handheld devices using Good&'s Secure OTA (over the air) technology. The new software offers advanced encryption, allows administrators to disable a device after repeated login failures and can remotely erase data from stolen or lost handhelds. The software also makes it possible to restrict access to certain applications and data ports such as Bluetooth and Wi-Fi, said Dan Rudolph, Good&'s director of Industry Solutions. Rudolph said the McAfee partnership resulted from customer and reseller feedback regarding stronger smartphone security.

Good&'s channel partners will be able to distribute McAfee&'s VirusScan Mobile product beginning in early 2006, he said. The software will be pushed out over the air from the Goodlink Management Server to smartphones and handheld devices.

SUN EXTENDS FINANCING TO COVER SOLUTIONS BUNDLES
Sun Microsystems is putting its weight behind the solutions-based sale by adding leasing and financing options for software, services and product bundles from multiple vendors.

Last week the company expanded its financing group, Sun Microsystems Global Financial Services, well beyond the traditional Sun-branded hardware financing it offered previously. The group now handles financing for software and services as well as solution-based bundles that include products from other vendors. It also has hired five channel managers specifically to service solution providers.

Though Sun certainly isn&'t the first vendor to offer such solutions—similar options are available from IBM Global Financing and HP Financial Services—the move is evidence that Sun is serious about solutions sales, its partners said. Solution providers said it&'s often more difficult to finance services-based deals with traditional credit firms.

ORACLE EXECS FLY COOP FOR OTHER OPPORTUNITIES
Two high-profile—and recently hired—Oracle execs have left the company to take the top slots at other companies.

Last Tuesday, Tod Nielsen, former Oracle senior vice president of marketing, was named CEO of Borland Software. Nielsen had been a Microsoft vice president and then chief marketing officer of BEA Systems.

The next day, Liberty Media said Greg Maffei, CFO and co-president of Oracle, would become its new CEO, succeeding John Malone next year. Maffei will also become president, stepping into Robert Bennett&'s shoes. Malone will remain chairman and Bennett will stay on the board.

Maffei and Nielsen both joined Oracle in June and both departed within five months.

DELL DEFENDS DIRECT MODEL IN WAKE OF LAGGING EARNINGS
Dell executives defended the company&'s performance and direct business model last week after releasing an earnings report that proclaimed “continued successful application of Dell&'s unique direct business model” in the face of declining growth.

But the PC maker posted earnings and revenue below previous expectations, and reported that desktop revenue actually dropped in the third quarter over the same period in 2004. For its fiscal 2006 third quarter, Dell reported sales of $13.9 billion, up 11 percent over the year-ago period. It posted net income of $606 million, or 25 cents a share, down from $846 million, or 33 cents, in the same period last year. Looking ahead, the company projected its fourth quarter would show sales of between $14.6 billion and $15 billion, and a profit of between 40 cents to 42 cents per share, compared with an average of analyst estimates of $15 billion and 42 cents per share, respectively.

Earlier this month, analysts and solution providers began openly questioning Dell&'s business model and prospects after the company announced it would fall short of previously expected third-quarter results.

Dell CEO Kevin Rollins said, though, that the company is now tracking its growth in a healthy and appropriate manner. “We believe 10 or 11 percent growth rate is a very healthy growth rate for a company our size,” he said.