CRN News Briefs: July 17, 2006


The departure is only the latest in a string of major management changes at Sun. On July 1, Rich Napolitano, who for the last year-and-a-half ran Sun sales as president of its USA Geographically Established Market (GEM) unit, left the company and was replaced by Tim Lieto, who was promoted to senior vice president of Americas sales. Replacing Lieto as vice president of U.S. sales is Cheryl Cook, who has been at Sun since 1998.

In May, Mark Canepa, the head of Sun's Data Management Group, left to pursue other opportunities after 10 years at the company. He was replaced by David Yen, formerly vice president of Sun's Scalable Systems Group, which encompasses Sun's SPARC servers. And the month before, Jonathan Schwartz was named president and CEO, with Scott McNealy retaining his role as chairman.

Some partners said it is too soon to tell what impact Stroud's departure will have on Sun and its channel strategy. Pat Edwards, vice president of sales at Alliance Technology Group, a Sun solution provider, said that the main result of Stroud's leaving is the fact that Sun is continuing to lose senior management.

"To the general public, it can be viewed as a sign of weakness, or as a sign of positive change," Edwards said. "It could be good. It could be bad. It's hard to speculate now."

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Tom Kuni, president of SSI hubcity, a Sun solution provider, also said he is taking a wait-and-see attitude as to how Stroud's resignation will impact Sun's channel, especially since he expects even more changes in light of Sun's recent decision to lay off 5,000 to 6,000 employees. "I'm sure Wagner will do a great job," he said.

Kuni said that Stroud, who took control of Sun's channel business after the retirement of Gary Grimes one-and-a-half years ago as vice president of partner management and sales operations, has been a great friend to the channel as well as a great personal friend. "I found him highly ethical and resourceful," Kuni said. "I enjoyed working with him immensely. I wish him the best of luck." Kuni, who was former head of Sun's VAR council, also said that Mark Krezowski, who had been the Sun VAR council coordinator and facilitator and "chief herder of cats" for his efforts in getting the solution partners on the council together, is moving from the channel to Sun's OEM sales organization.

"Greg and Mark both were very instrumental in making my job as co-president of the Sun VAR council easier," he said. "They were great assets in moving the channel forward."

Microsoft will now offer a free Dynamics CRM Server with its four ERP lines, a company executive said last week. The news got huge applause from a few hundred MBS partners at a session at Microsoft's Worldwide Partner Conference.

This is a "fill in the suite" move, said Corporate Vice President Tami Reller. "After the next wave of ERP products, we will offer full financial management, supply chain management and CRM suites," she said.

Customers will still have to pay for named user licenses for CRM, but every purchase of Dynamics GP, AX, NAV and SL will also get the CRM server. But the Professional CRM server, which typically lists for $1,200 to $1,700, is free. The company will continue to sell CRM standalone through volume licensing. But—and this is a huge plus for many partners—they can order CRM named user licenses "from the MBS price list and you'll get ERP partner discounts," Reller said.

This might placate MBS partners still irked that Microsoft reneged on promises to offer CRM through the MBS channel only. MBS partners are a select subset of Microsoft's channel and make higher margins on products that are not available through enterprise licensing. The offer is not just for new customers, but for legacy accounts who are up to date on maintenance.

There may be some operational wrinkles to work out. For example, ERP will now be offered on a concurrent user basis while CRM will continue to be sold per named user, Microsoft said.

In addition, both Axapta and Navision (Dynamics AX and Dynamics NAV) ERP ship with their own CRM functions and that will continue. Microsoft officials said.

Check Point Software Technologies has lost its channel chief. Kevin Maloney, vice president of worldwide sales at Check Point, left the security vendor July 7 and took a new role as executive vice president of worldwide sales at Network General last week.

The departure marks the second executive defection for Check Point in about a month. Chief Marketing Officer Ken Fitzpatrick left the company at the beginning of June, a few months after he joined. A Check Point spokesperson said the company is seeking candidates for both positions.

Maloney joined Check Point in 2004, where he led the vendor's channel and distribution strategy. He previously spent 28 years with IBM "in and out of the channel" in sales positions within Big Blue's PC and data management businesses.

Maloney said he hopes to use his channel experience to help grow the percentage of Network General's U.S. business that goes through the channel. The application and network performance analysis vendor gains about half of its U.S. revenue through the channel, with 100 percent of overseas sales going indirect, he said.

Iomega wants to become a managed services player with an agreement to acquire CSCI, an MSP catering to SMBs.

The planned $11.5-million acquisition, unveiled last week, is part of Iomega's move to "decommoditize" its business and lessen its dependence on hardware margins, said Thomas Kampher, Iomega's COO and president.

SMB managed services are offered by a number of small providers such as CSCI. However, a company like Iomega can take care of a large channel base to bring order to this fragmented space, Kampher said. "We have access to 15,000 VARs worldwide," he said. "A lot of our VARs are not big enough to offer services on their own. We want to partner with VARs and direct marketers to give them a chance to share in the revenue."

CSCI's revenue this year is expected to exceed $10 million, up from about $7.5 million last year.

Tedd Nipper, president of NexGenEx, a solution provider and MSP, welcomed competition from Iomega as a way to make the SMB MSP market stronger. "A lot of players are looking to see how to get involved," Nipper said. "A lot have great tools, but are more geared to the enterprise. But there is a lot of clamoring in the 5-PC to 500-PC space."