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San Francisco Bay Area Shelter In Place Order Adds Channel Uncertainty

The six counties in the San Francisco Bay Area have sent out shelter in place orders to help stop the spread of the COVID-19 coronavirus. While a nuisance for residents, the orders could impact the businesses of local solution providers.

Solution providers Monday said a shelter in place order for six counties in the San Francisco Bay Area, the heart of the U.S. tech industry, will severely hamper their ability to conduct business, particularly on the hardware side.

"If this goes on too long , will we have [customers] who say, ‘I can’t afford this anymore. We’ve been hit really hard,’?” Steve Neverve, president of Nevtec, a San Jose, Calif.-based MSP in in Santa Clara County, told CRN in an interview.

Several media reports said the San Francisco Bay Area shelter in place orders in response to the coronavirus pandemic are impacting the counties of San Francisco, Marin, Santa Clara, San Mateo, Alameda, and Contra Costa, an area which includes Silicon Valley. The order becomes effective starting 12:01 am on March 17, and will continue through 11:59 p.m. on April 7, unless otherwise notified.

While many IT companies such as Cisco have put in place mandatory work from home policies to help slow down possible transmission of the COVID-19 coronavirus, the new orders are aimed at keeping as wide a range of people as possible away from potential sources of becoming infected by the virus.

[Related: Coronavirus Crisis: The IT Industry Prepares For The Worst]

For instance, the health officer of the Department of Public Health of the City and County of San Francisco on Monday issued an order directing all residents in the county to shelter in their places of residence "except that they may leave to provide or receive certain essential services or engage in certain essential activities and work for essential business and government services."

The County also directed all businesses and government agencies to "cease non-essential operations at physical locations in the county" and avoid "all non-essential travel," including travel by foot, bicycles, and scooters.

Violation or failure to comply with the order is a misdemeanor punishable by fine, imprisonment, or both, the order read.

"It's official," Carl Wolfston, principal at Headlands Associates, a Pleasanton, Calif.-based solution provider.

Wolfston received the shelter in place order from Alameda County Monday afternoon via a text message that simply read, "This is an AC Alert from Alameda County. The Alameda County Health Officer ordered a shelter-in-place order, effective at midnight."

For Wolfston, who works from his home office, the biggest impact will be on the hardware side of his business where he is not sure whether clients will be at work to receive products or cut checks.

"I got an order from a government customer two weeks ago for Hewlett-Packard Enterprise blade servers," he said. "Normally, these take 30 days to ship. But now everybody's working from home. Who's going to receive the shipment?"

Many government agencies are ordering desktop PCs so their people can work from home, including one agency looking for 150 PCs, Wolfston said.

"That order hasn't been placed yet, and now may not be placed," he said. "I've never seen things like this before. The government agencies have to spend their money by June 30, or it goes away. So now if I get an order, I'm not sure they'll have the money to spend on it. I will tell the customers that when the products are available, they will be shipped. But what if no one is there to receive the products or cut the checks?"

Software and services business is not impacted by the shelter in place order, Wolfston said.

Don James, CEO of Bear Cloud Technologies, a San Francisco-based solution provider, told CRN via text message that the San Francisco Bay Area shelter in place orders is already impacting clients' decisions and purchases.

"Much of it [is] from people having to work remotely and not having systems in place to approve purchases and projects remotely," James told CRN.

Neverve of Nevtec told CRN he is having his lawyers review the order, and is also making plans to have his staff work from home.

Neverve said that, while he does have some police and health care clinics as his customers, the wording of the order is not clear.

“I’m reading the court order right now, about who can work from home, who can go to the office, and who can’t," he said. "It’s a little vague. Right now, I probably have to contact my attorney and have him read it for me.

In looking at the court order, Neverve said there is a section that says anyone essential to operations is exempt.

"But then again, that now gets into semantics," he said. "We probably have multiple customers who still have Windows 7 computers that need to be replaced. Those are all just going to have to be put on hold. We’ve reached out to our customers and said if this is not essential, we’re going to have to postpone this. We’ve also said ‘If you don’t have a policy that addresses the safety of our staff, then our staff members won’t show up.’"

Nevtec's policy is, if someone is sick, they can’t come to work, Neverve said.

"If we go on lock down, we’ll probably rotate it so one or two people come in for essential duties," he said. "At the end of the day, I think to be prepared and over-cautious is good. Where I’m really concerned is for our customers."

Neverve said that while recurring revenue has been a boon to his company's business, the San Francisco Bay Area shelter in place order could possibly result in customers saying they can no longer afford certain services.

"If this goes on too long ,will we have [customers] who say, ‘I can’t afford this anymore? We’ve been hit really hard,'" he said. "And they’re going to want to cancel their contracts. We have one customer who is in the party rental business. We have another customer who makes wedding gowns. … When you look at some of the retail businesses we support, we’re going to have to be creative to help them out."

Neverve said the IT channel has seen similar situations including the dot.com crash of 2000 and the economic crash of 2008.

"We have customers who have been with us 10, 15 years, through good times and bad," he said. "We’ve worked with them and adjusted what we needed to, in order to help them through, and I think that’s what we’ll have to do this time."

Terry Joslin, a principal and executive vice president at NWN, No. 76 on CRN's Solution Provider 500, is based in Sacramento, Calif., and says he frequently travels to the Bay Area for work.

Any travel to the Bay Area is now on hold, Joslin told CRN, although NWN, a major partner of Cisco and HP Inc., is in a fortunate position as a solution provider because of its focus on managed services.

"We seem to be in pretty good shape," he said. "We've got a lot of managed services which are ongoing. We're really busy. But we're unique. We're in remote management and those sorts of things. So we're an enabler of what's going on [with increased work from home]."

Even so, Joslin said, the situation is not about any single company.

"It's all about the rest of the country and those that aren't in as good a position as we are," he said.

It is still too soon to understand what the full impact of the San Francisco Bay Area shelter in place orders will be on NWN and the channel overall, Joslin said.

"Maybe this lasts two weeks," he said. "I can't imagine it lasting much longer. These orders are coming out fast furious. But the data shows that if you jump on it quick, the curve doesn't go up as fast. So from that perspective, hopefully two weeks and we're back to starting to get to normal."

At the moment, Joslin said, NWN's phones are busy.

Ultimately, Joslin said, the response to the pandemic "probably will fundamentally change the way people work in the future."

DJ Das, founder and CEO of ThirdEye Data, a Google partner based in San Francisco, told CRN via email that his company has offices in the Bay Area and India with clients across six countries. His company has been operating virtually all along, meaning he could be based anywhere but would be able to do all his work exactly the same.

ThirdEye Data and its clients meet and collaborate over Zoom, Slack, Skype, and other services in addition to email, and thus from a work perspective, nothing has changed, Das wrote.

"But for sales and business development activities do I need to go out and meet people," he wrote. "I am a people person and I like to meet people and shake hands. I was supposed to be on my end-of-the-quarter trip to meet my customers which I have canceled. We are meeting online now. All-in-all, from a work perspective, no impact for us - but that's just us."

In the meantime, Das, who lives in Santa Clara County, wrote, "Am at home and safe!"

Wolfston said he is lucky because he does his solution provider business because he wants to, and not because he has to."

"I do enjoy this business," he said. "It has worked out well. And I don't really go out anywhere. We went out to our favorite Chinese restaurant last night, and there were only two people there. Normally we know all the people at the restaurant."

The biggest personal impact for Wolfston from the San Francisco Bay Area shelter in place area has been his work bringing his dogs to local schools to help students with therapy.

"The schools are closing," he said. "I've been doing this for some time. I'm getting to know the kids. And I'm sorry to see this is being cut."

O'Ryan Johnson, Kyle Alspach, and Joseph Tsidulko contributed to this story.

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