Channel Best-Sellers: Systems/Storage

JOSEPH F. KOVAR

Aggressive pricing from Hewlett-Packard and a channel and market backlash against Dell combined to make HP both the No. 1 best-seller and top-growth best-seller of desktop PCs through distribution.

According to The NPD Group/Distributor Track, which provides an aggregate monitor of products sold through distributors affiliated with the Global Technology Distribution Council, HP logged 50.6 percent of desktop revenue in 2006 as measured by U.S. dollar volume. It was followed by Lenovo, with a 33.1 percent share, Apple with 11.3 percent, and Sony, with 1.7 percent.

HP also was the top-growth best-seller, with a percentage point increase of 2.4 from 2005 to 2006. Lenovo's share fell 2.6 percentage points during that period, while Apple slipped 0.7 percentage points. Of the top best-sellers for desktops, Acer was the only vendor besides HP to log an increase.

Todd Barrett, manager of security and networking sales at CPU Sales and Service, a Waltham, Mass.-based solution provider that sells HP products and also provides Dell to customers if requested, said his company appreciates the flexibility HP offers its channel partners.

"With HP, we can act as an agent or resell the products or point customers to HP online," he said. "Customers aren't tied to any single source."

Jerry Benisch, sales manager at Clifton Gunderson Technology Solutions, the technology consulting practice of Peoria, Ill.-based Clifton Gunderson, the nation's largest CPA firm, said his company works with several vendors but standardized on HP for PCs six or seven years ago and never looked back.

"We've found HP desktops to be extremely dependable, with no problems," Benisch said. "And they are exceptionally well-priced."

Benisch said that while everyone thinks of Dell as the price leader, solution providers prefer to compete on service and dependability. "Most people understand that HP's prices won't beat Dell's, but they'll turn to HP for dependability," he said.

Next: Notebooks

BY EDWARD F. MOLTZEN

In mobility, quality counts. High quality is what wins and keeps notebook business across the channel. Low quality, or the perception of low quality, hurts.

According to The NPD Group/Distributor Track, Lenovo lost some U.S. dollar volume share through distribution last year as it struggled in its U.S. business but remained the leader in notebook revenue generated through the two-tier channel. Lenovo's revenue share slipped to 34.8 percent last year from 39 percent in 2005, but the company with the vaunted ThinkPad brand remained on the highest perch in the segment.

NPD reports the top-growth best-seller in notebooks was Panasonic, manufacturer of the ruggedized Toughbook series, which logged a 16 percent revenue share in 2006 compared with 12.3 percent in 2005—giving it four times the growth of its next fastest-growth rival.

Jeff Moore, CIO of Mooring Tech, an Atlanta-based solution provider and Toughbook reseller, lauded Panasonic's attention to high-quality components and leading-edge, Edge connectivity solutions. "Panasonic has really stuck with it," he said. "Other vendors out there have given up in terms of quality of components they use. Panasonic sees the long-term potential there."

Moore said Panasonic's dedication to the Toughbook ruggedized lineup of notebooks—even while others stayed away from the space—left it the sole, major player when the market expanded beyond the traditional law enforcement and military vertical spaces.

Elsewhere, the No. 1 best-seller in this category, Lenovo, has been challenged in its efforts to streamline its operations from a company once based in China to one now based in Raleigh, N.C. However, the company has maintained strong numbers in the channel as it has led with its ThinkPad lineup along with a new, small-business-focused Lenovo-branded line of mobile PCs.

The NPD data shows the Top 5 Best-Sellers in notebooks were rounded out by Hewlett-Packard, which posted 19.7 percent of the U.S. dollar volume through distribution in 2006; Sony, which logged 11.1 percent, and Acer, with 6.9 percent.

Next: NAS

BY CRAIG ZARLEY

Network Appliance is beginning to make its move in the channel.

While the NAS appliance vendor ranked third in 2006 share of network-attached storage sold through certain distributors measured on U.S. dollar volume, NetApp more than doubled its year-earlier numbers. In 2005, it had a 5.6 percent market share of revenue for NAS products monitored by The NPD Group/Distributor Track. But that jumped to 14.9 percent in 2006, good enough for a third-place showing behind top best-seller Buffalo Technology with 24.6 percent and the combined dollar volume for Adaptec and Snap brands, which claimed 21.9 percent of the 2006 NAS revenue through the distributors included in Distributor Track. Iomega and Hewlett-Packard offerings rounded out the Top 5.

"We've been a been big EMC reseller for a long time, but clearly a lot of our momentum, and a lot of our new development, is with NetApp," said Keith Norbie, director of storage at Nexus Information Systems, Plymouth, Minn. "The analogy is like being an auto dealer, and you can really sell only so much in this market if I have Ford. At some point I have to open a Chevy or Toyota dealer. NetApp has a great message and a good solution."

Adaptec lost ground during the past year, the data showed. It was the leader in 2005 with a 36.6 percent U.S. dollar volume share but dropped 14.7 percentage points to second place in 2006. Buffalo Technology, primarily on the strength of its SOHO sales through Best Buy and Circuit City, led the category in 2006 with 24.6 percent share.

Norbie said he doesn't expect Buffalo Technology to gain much traction in enterprise accounts. "I can't envision any kind of a data center with a raised floor having anything with the name Buffalo in it," he said.

Meanwhile, Amy Rao, CEO of Integrated Archive Systems, a Palo Alto, Calif.-based solution provider, said she has seen NetApp improve how it works with the channel. "Our NetApp numbers are growing fast. My engineering staff says it's their favorite line to sell," she said.

JOSEPH F. KOVAR contributed to this story.