Briefs: October 9, 2006


Under the deal, terms of which were not revealed, Jeskell becomes a subsidiary of FusionStorm. Javed Kahn, president and CEO of Jeskell, will continue to run Jeskell as president.

The Jeskell acquisition is the latest and largest in a string of acquisitions by FusionStorm, and FusionStorm CEO John Varel said that activity will continue over the next few months. Both companies have enjoyed strong growth over the past few years and are profitable, Varel and Kahn said.

FusionStorm is focused almost exclusively on the commercial space and has no government business. Sun accounts for almost all of its business, with just a small portion coming from IBM pSeries, Varel noted. "We don't want to do anything to damage our Sun [commercial] business," he said.

Arrow Electronics signed a definitive agreement last Thursday to acquire Alternative Technology, a $300 million specialty distributor. Terms of the deal were not disclosed.

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The deal brings more security and server solution muscle to Arrow, according to executives at the distributor.

Alternative has 150 employees and expects to exceed $300 million in sales this year. Key vendor partners include Citrix Systems, VMware, SonicWall, Secure Computing, Fortinet and Blue Coat Systems.

The acquisition will increase the size of Arrow's Enterprise Computing Solutions (ECS) division by some 12 percent and provide diversification benefits for Arrow, wrote Brian Alexander, senior vice president of equity research at Raymond James and Associates, in a report on the deal.

"In addition, we believe that Alternative's market has a higher growth profile than the current ECS division," he said.

Arrow has 11,400 workers and posted 2005 sales of $11.16 billion. It said the deal will close within the next 60 days.

Former Hewlett-Packard chairman Patricia Dunn surrendered at a Silicon Valley courthouse last Thursday afternoon on felony charges for spying on reporters and company directors.

Superior Court Judge Alfonso Fernandez released Dunn, who is due to start treatment for ovarian cancer, on her own recognizance after a three-minute hearing.

Dunn sat quietly in the courtroom after arriving about 20 minutes early, speaking a single word, "Yes," when asked if she agreed to return for arraignment on Nov. 17.

In HP's probes, investigators impersonated company board members, employees and journalists to get their private telephone records.

Dunn, who resigned last month and appeared before Congress to testify about the investigation, has said she regrets the way the probe was handled, but does not accept personal responsibility for any deceptive tactics used.

California Attorney General Bill Lockyer filed charges last Wednesday against Dunn and four other defendants because of tactics used in HP's effort in 2005 and 2006 to find the source of leaks to the media.

All five defendants named face four felony charges: conspiracy; fraudulent use of wire, radio or television transmissions; taking, copying and using computer data; and using personal identifying information without authorization.

Also charged were former HP ethics officer Kevin Hunsaker and investigators Bryan Wagner, Ronald Delia and Matthew DePante of information supplier Action Research Group.

Bell Microproducts acquired an interest in solution provider ProSys Information Systems, the largest company in this year's CRN Fast Growth 100.

ProSys, a privately held company with about $400 million in revenue last year, provides storage, server and IT infrastructure solutions and consulting. Its top vendor partners include Hewlett-Packard, IBM, Cisco Systems, Panasonic and Network Appliance.

Bell Micro will pay $41 million in cash and stock for 48 percent of ProSys. Additional payouts are possible if certain financial performance levels are achieved, according to the company. ProSys will continue to be run by Michelle Clery, one of the solution provider's founders.

In addition, Bell Micro will acquire certain assets to establish a wholly owned subsidiary called ProSys Information Solutions, which will focus on small and midsize businesses. The new subsidiary will include Biz-X-Change, an IT procurement application, and be led by Bruce Keenan, one of the original founders of ProSys.

Bell Micro entered the solution provider business in 2001 when it purchased TotalTec. That business, combined with ProSys, will generate about $500 million in annual revenue, and its geographic reach spans from New England to Florida and as far west as Texas.

"We are hoping to grow that business to $1 billion by the middle of 2008. We're looking at more acquisitions on the West Coast and in the Midwest. We hope to do it earlier, but we don't want to jump into something for the sake of doing it," said Don Bell, chairman, CEO and president of Bell Micro.

IBM's new global channel chief said he expects no immediate changes to IBM's channel programs or strategy, but vowed to re-engage smaller VARs that may have lost touch with IBM following the sale of its PC business to Lenovo.

"A clear set of priorities were put in place in the business partner organization under Donn [Atkins] and those priorities have resulted in moving us in the right trajectory," said Ravindra Marwaha, who is replacing Atkins as IBM's general manager, Global Business Partners. "At the moment my focus is to make sure those priorities continue and are reinforced."

Still, going after Lenovo VARs whose previous relationship with IBM was primarily through its PC business will be a top priority, Marwaha said. IBM currently has a plan to recruit as many as 5,000 new global channel partners, including many former partners that primarily had a relationship with IBM through its PC business.

"If any of the partners feel that their relationship has gotten weaker, it is something that we should immediately step up and address," Marwaha said. Atkins said the Lenovo channel is a partner set that Marwaha knows "better than any of us, and he can only help our initiative."

Marwaha was most recently president of Asia- Pacific and senior vice president of Lenovo Group. He was responsible for sales, marketing, operations and service and support, in addition to full profit and loss responsibility.

Atkins, who retired last Thursday after 30 years at IBM, meanwhile, did not rule out resurfacing at some point in the IT industry.