My Favorite Vendor

"When I came back, we converted everything to Intel," says Rodriguez, president of American CompuSystems, a VAR based in Clearwater, Fla., and an Intel Premier Provider. "We started selling Intel motherboards, Intel networking cards and all its hubs and routers. We started selling Intel wireless solutions. We really transformed our primary focus to Intel products. That is when we became a full Intel house."

Nearly three years ago, Steve Terp, director of business development at Tribridge, a Tampa, Fla.-based solution provider, also made the decision to focus a major portion of his business on one vender,in this case, it was Microsoft, though he also kept Intel and Cisco Systems on his radar screen. His instincts told him this troika were bellwethers.

"If you were going to survive in the channel space, those were the companies to watch," he says. "We had relationships with Compaq Computer and Hewlett-Packard, but the real direction of technology was with those three."

VARBusiness' IT Spending and Strategy research supports both Rodriquez's and Terp's instincts. Technology buyers at customer companies cite, in order, Microsoft, Intel and Cisco as their top trusted vendors. And for many solution providers, the mere affiliation with any one of them can go a long way to boost their businesses.

"If you wanted to do an executive forum, then you were guaranteed to get a good audience if you had the right people speaking from one of those three companies," Terp says. "Bottom line was, people wanted to hear what Intel's plans were. So when Intel said, 'This is where we see things going in 18 months,' that was a valuable message to bring to our clients."

The reason? "Market share," he says. "It was pretty easy to spot. Cisco was growing like crazy. Microsoft had this gigantic market share that was continuing to grow. And there wasn't a corporation around that was not using Intel as a primary platform. [Intel was setting the curve."

But it's not just that those companies have the lion's share of the market in their respective core technologies that makes them the most popular brands among their end users. Those three vendor giants have also been working on broadening their product offerings during the past several years. In turn, resellers and integrators can ride the technology waves created by this trio.

The Intel Advantage

American CompuSystems' Rodriguez says 88 percent to 92 percent of worldwide businesses fall in the small-to-midsize category. And that is his total business. As a result, he needs a vendor with a wide variety of products that integrate well.

"You think Intel is just about processors, but it does so much more," he says. In fact, the company makes hubs, telephone systems, servers and wireless solutions.

For example, part of Intel's offerings include the Intel Server Building Blocks solution, which is a tool to build file servers. Intel provides a step-by-step diagram of which processor, motherboard and RAID controller to use. The solution can be customized to fit either an SMB's needs or a large, enterprise data center.

"We put it together," Rodriguez says. "Intel shows us which parts go together with which parts. We can either do it online or the [company gives us a CD [with instructions."

Intel also makes complete phone systems. The latest, the Intel Converged Communications platform (ICCP2100), is an open-standards, application-ready product that enables SMBs to rapidly expand their communications capabilities. The system handles both analog and IP phones for the SMB market. More important, the ICCP platform has an intuitive user interface for remote-system management, which can reduce administrative costs and increase productivity of systems administrators. Rodriguez says the system comes with more than 1,000 features, from voicemail to call-back tracking.

Last July, American CompuSystems put the platform to use and installed an Intel/Microsoft wireless solution,at a cost of $180,000,in the media center and computer lab at Espiritu Santo Catholic School, a new school in Safety Harbor, Fla. This first phase of the project took 30 days. The solution provider installed an ICCP2100 phone system, along with an Intel server and Intel-based PCs.

Phase two of the wireless solution will entail purchasing laptops so that students can go to the media center, sign out the devices and then go anywhere within the two-floor area to do research. The computer lab primarily uses wireless, so teachers can give lessons via a projector or laptop from anywhere in the room.

"Everything is Intel," Rodriguez says. "The hubs, the servers, the computers. We also had a lot of help from Intel engineers. The ICCP2100 was a new phone system at the time. Intel has since sent engineers there twice to pull their logs to see how the system is performing and to make modifications."

In the SMB market, price matters. That's why American CompuSystems chose Intel over Cisco as its primary vendor partner. Rodriguez finds Cisco's products much more expensive, compared with Intel's solutions,in some instances costing three times more. And he doesn't find the products to work any better, except when you move into the enterprise sector.

"Then we are talking about switches and routers. There, Cisco has better products," he says. "But that is not my target customer. I would think they are better partners in the enterprise area."

Cisco To the Core

Meanwhile, John Freres, president at Schaumburg, Ill.-based N2N Solutions, says his company is a "dyed-in-the-wool" Cisco reseller. N2N Solutions has been a partner for seven years and has watched Cisco's channel program mature from its inception. N2N Solutions' revenue is largely dependent,at least 95 percent of it,on selling and providing support and services for Cisco products. Last year, the solution provider made roughly $40 million in total revenue, most of it by wrapping support and services around Cisco products.

"The breadth of its products means we can offer multiple technologies," Freres says. "Cisco has done a great job of building a business around a channel partner."

Approximately 80 percent of Cisco's revenue is generated via indirect sales. The vendor has developed a cornucopia of networking solutions that include content networking, data, voice and video, DSL, optical, security, VPN, storage networking and wireless. Most important, the San Jose, Calif.-based company tailors training certifications for resellers around those technologies.

Freres says his company supports Cisco's entire product line, including routers, switches, security technology and other multiservice products, such as IP telephony and voice-over-IP capabilities. One product he singles out is the AVVID architecture for voice, video and data integration. That evolved from Cisco's first push into that market segment with its Call Manager product, which enables voice capability in routers and now includes its IP telephony platform. Call Manager has a variety of software products surrounding it, Freres says. They include unified messaging, contact centers and Web collaboration.

"Cisco has put together a strong portfolio surrounding all emerging technology markets," Freres says.

Ultimately, one of the best aspects about Cisco is it has created a common thread throughout all its technologies in the form of its Internetworking Operating System (IOS), which eliminates potential interoperability problems. Freres says it is both costly and impractical for resellers to put together a solution based on multiple vendors' hardware and software. Cisco has created a form of one-stop-shopping for solutions, he says.

Microsoft Magnified

At Tribridge, Terp says his company is able to delve into a slew of new markets just by following Microsoft's lead. He mentions Microsoft's BizTalk Server for applications integration as an example. Historically, companies have spent large amounts of capital signing up with EDI providers as a way to communicate with clients, customers and suppliers. BizTalk allows companies to do that communication using Microsoft products in a more efficient and cost-effective manner, Terp says.

"We focused on that when Microsoft decided to get in that game," he says. "Microsoft came out with a product that was extremely affordable and extremely effective. We could expand our business model to follow."

For example, Terp talks about a recent conference call with a customer in the airline manufacturing sector. One of the customer's major clients mandated that the company electronically share information.

"It's a supplier-customer relationship, and the customer is saying, 'I need you to do this in order to do business with you,'" Terp says. "Two years ago, Microsoft was not in that business. Now it is. It continues to broaden its offerings. That allows me, as a partner, to broaden my business."

Another Microsoft product Terp is hyped on is its SQL Server database software, especially for application development.

"When it comes to development, 100 percent of it happens on a SQL Server," he says. "If we have a client who calls and says, 'Hey, we are a big Oracle shop and we need you to do this kind of development,' we say, 'Frankly, we have made our commitment to Microsoft. Hopefully, you can find another partner who can help you.'"

Tribridge, which is currently applying for Microsoft's Gold Certified Partner status in the e-commerce sector, made the decision some years back to concentrate on the Microsoft platform because it believes that support and expertise for those products are abundant. For Tribridge, Microsoft fits in well with the midmarket.

"Our concentration is on companies with revenue between $50 million and $1 billion," Terp says. "Here is the bottom line: When we speak to a client who needs some kind of software solution or business application...it is almost always acceptable to a Microsoft solution. If I went in there with a lesser-known solution, or one that is less affordable, chances are I would have a smaller customer set."

Tribridge counts itself as part of a small group of partners that has formed a tight relationship with Microsoft. This partner group, Terp says, engages in heavy-duty collaboration with Microsoft, especially in areas that focus on the partner's expertise.

"I literally spend time every week collaborating with its CRM [team on the deals we are working on together," he says.

With the amount of turmoil partners are experiencing these days, Tribridge is finding itself in a sweet spot. Terp says his company grew 50 percent last year in its space, when analysts were saying that market went down 22 percent.

"I think the economic times are separating the wheat from the chaff," Terp says. n