IBM, HP Each Tell Only Part of the Story

Just what is so special about Station Casinos that both IBM and HP would covet this nearly $1 billion rapidly growing, publicly held casino operator? Both companies recently highlighted Station Casinos at their partner conferences as an outstanding customer reference, portraying it as an account that was buying its goods while working directly with channel partners. That both vendors would highlight the same account was an open invitation to find out exactly what was going on. So I connected with Marshall Andrew, the casino's vice president of IT and CIO. Trust me, after a few minutes with Andrew, you will want to direct all your activities toward the IT needs of Vegas gaming companies; they are making incredible investments in technology. Andrew and his peers also are focused on leveraging local partners.

What IBM did not reveal is that Station Casinos is a heavy user of HP equipment, particularly its desktops--some 3,000 of them, plus 300 ProLiant servers. Of course, HP did not mention that Station Casinos relies heavily on some IBM big iron in the form of six high-end iSeries servers running DB2 database software. "We like to keep a 50-50 environment," Andrew told me--a subtle reminder that customers don't want to be beholden to any one vendor.

What both computer vendors also failed to mention was the prominent role Microsoft's .Net is playing in the casino's launch of a major new race and sports-betting system, which will make it even easier to take the money of hungry sports bettors. The tech efforts of Andrew's department will drive incremental revenue for the casino, as have its efforts to automate the casino floor and track frequent gamblers. Overall, casino IT is one of the most dynamic and exciting applications in the market today. It is also where partners are getting a piece of the action. For example, Connecting Point is supplying HP systems to Station Casinos, while another partner is doing the POS work, and Agilysys is supplying the hotel-management piece.

In fact, Andrew says he places a premium on local suppliers who can come through in a pinch. The top execs must supply him with their home phone numbers and be available 24/7. "We work with local businesses because of the advice we receive, and we know and trust the people," he says. Those lucky enough to be part of the process could reap the benefit of a customer willing to spend between 2 percent and 4 percent of its revenue on IT each year. Not bad, considering Station took in $986 million in 2004.

In passing, Andrew mentioned something that should send shock waves through IBM Global Services, along with every other vendor: He cannot understand why his services bill often runs two to three times the actual cost of product acquisition. From his point of view, something is wrong with that equation, and that vendors are making their wares just too complicated to use. So Andrew has formed a CIO council of Las Vegas-based CIOs to meet with vendors and suppliers to resolve the high cost of services and develop some better standards.

Xchange Government Integrator is coming!

GovernmentVAR is launching its first event, in conjunction with the CMP Channel Group XChange division, July 13 to 14 in Washington, D.C., at the J.W. Marriott. Our goal is to bring together the leading integrators, vendors and distributors that cater to federal, state and local government customers, along with educational institutions. The event will be jam-packed with sessions on how to drive more sales into those markets. Of note, on July 14, we will hold an awards ceremony to honor vendor executives for their outstanding performance in the government sector. Look for us to name a Government Vendor Executive of the Year. We also will pay tribute to government-focused solution providers who have been outperforming the market and delivering high levels of customer satisfaction.

Speaking of the government, I recently spoke to Dawn Duross of Cisco, Tom Ruff of EMC, Liz Vogel of HP and Alex Hart of Symantec, who are responsible for their vendors' government programs and are working hard to improve them. They work closely with their respective channel organizations, yet have the autonomy to make a wide range of decisions impacting how their wares are sold. Another commonality: They need more partners, especially those who fall into the government's 8(a) classification--firms owned by minorities or disabled veterans, which the government is required to purchase goods from on an annual basis.

Tell me about a case-study charade or a government vendor worth writing about at [email protected].