Eye On Innovation

That's the verdict of VARBusiness' 2004 Annual Report Card (ARC), where product innovation is hailed in categories as diverse as servers, enterprise storage management software and security appliances.

Clearly, Samsung is pushing the envelope. Honored for its SyncMaster display line, it garnered the single highest overall score for product innovation (scoring an 89) among all winners across 18 separate ARC product categories for the second year in a row.

But other vendors weren't slouches either. Intel scored an 87 on product innovation for its desktop and server processors. And Xerox's Phaser family of network color printers ran neck and neck with NEC/Mitsubishi's MultiSync, Diamond Pro and related families of displays (both companies tallied an 81). IBM's iSeries of midrange servers rounded out the top five with a score of 80.

This year's scores delve into more than just surface innovation. VARs were surveyed to take their measure of four key criteria of product innovation: quality/reliability, richness of features/functionality, technical innovation, and compatibility and ease of integration.

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The results reveal that flash-in-the-pan technologies can't keep pace with products that have been put through their paces and refined to perfection over many engineering cycles.

Indeed, a big reason Samsung held onto the top slot is engineering smarts, which has enabled it to deliver on the seemingly contradictory goals of maintaining quality while continually adding cutting-edge technology to its displays.

For example, in stretching to build the 57-inch flat panel it will field next year, Samsung has pioneered the creation of large-screen substrates that have the same level of quality as smaller screens. (In contrast, many other vendors have to literally "seam" together two midsize panels to make a larger unit.)

Another advantage is that Samsung is a vertically integrated manufacturer, producing all elements of its displays. "As we mature in the process of producing our LCD panels, we reduce our defect rate," explains Jim Muta, Samsung's engineering manager for displays. "This allows us to make improvements to the cell structure of the panels. For example, we recently boosted the contrast ratio to 1,000-to-1."

But when it comes to innovation, none are more intense than those at dueling systems vendors Hewlett-Packard and IBM. The two computer giants fought a pitched battle in multiple categories in this year's ARC awards. HP and IBM tied in innovation (both scoring 74) for entry-level servers and for mobile computers. IBM (scoring a 74) out-innovated HP (with a 71) in the advanced desktops and workstations category. And the two were closely grouped in midrange servers, with IBM's iSeries and pSeries (scores of 80 and 79) followed by HP ProLiant and RISC servers (scores of 75 and 69).

Grace Under Pressure
Because everyday reliability is a given, VARs keep an eye on how vendors respond to problems when they do crop up. "No one can make a machine that's 100 percent fail-safe," says Jeff Wohlfahrt, president of Advanced Concepts, a VAR in Milwaukee, Wis. "The real issue is, how are problems resolved? What's the infrastructure that's in place when you have a problem?"

Wohlfahrt describes an experience that convinced him HP can deliver the goods. "We had a client who had a hot-swappable drive [on its server] go down," he relates. "We called HP, and a replacement was there the next day. I'm happy, and my client's happy."

HP is grateful for such kudos, but it would also feel better if it could head off potential problems at the pass. "You can do predictive support on the hardware to avoid failure up front," explains Brian Cox, worldwide product line manager for HP's enterprise servers. "We do this on our servers, where we'll monitor temperature, the usage of disk capacity and other parameters. Before something actually reaches a failure condition, we'll phone and tell [the customer] to either expand capacity or to replace the component before it goes down."

Another hallmark of innovation is richness of features/functionality, a metric in which IBM's midrange servers achieved high marks (scoring 79 for its iSeries, 80 for the pSeries). Rod Adkins, IBM's vice president of development for the systems and technology group, says his engineers are aiming at innovations that reach beyond the CPU. "It's more than just frequency scaling," he says. "It's much more of an end-to-end systems approach. We're looking at dual-core processors, system-on-chip technology and better integration of middleware with the applications layer."

Solid innovation also yields benefits in terms of product quality/reliability. Here, Cisco outpaced its competition in both the networking infrastructure solutions category and business-class wireless LANs (scoring 78 and 77, respectively).

"From a reliability standpoint, we are extremely happy," says John Freres, president of Meridian IT Solutions, a networking VAR in Schaumburg, Ill. "We do a lot of work in banking, dealing with a fairly conservative mindset. One of the reasons we support Cisco is there's a high relationship between the quality of its products and the reliability of a customer network."

For Cisco's part, there's a conscious focus on reliability during the product-design cycle. "We have undertaken a systems-based approach to quality," says Mario Mazzola, chief development officer for the company. "This means using an architecture focused on key elements, such as design, tools and processes."

Nowhere is such attention to technical detail more evident than in the category of desktop and server processors, where Intel and AMD have vied for two decades to outdesign and manufacture each other in the tough task of placing hundreds of millions of transistors on a tiny slice of silicon real estate.

AMD, which is riding high on the strength of its 64-bit Opteron, nevertheless, couldn't cut off Intel at the pass.

"Intel's boards have superior reliability," says Ed Stevens, general manager of Ace Computers, a systems builder in Arlington Heights, Ill., who says that in three years, he has seen a failure rate of less than 1 percent. "We haven't had that from Taiwanese motherboards. Intel platforms are tested very well--they're plug and play."

Like HP in servers, Intel believes it achieves high quality by innovating on the front end. "As we bring a product to market, we invest hundreds of millions of dollars in quality and reliability testing and validation," says Bill Leszinske, a marketing director at Intel.

Yet dangers can lurk beneath the surface of innovation. "If you always follow the conservative route and don't innovate, before long your platform is mature and your chances for running into new problems become very small," says Jerry Braun, Intel's product line manager for Xeon. "But this industry demands that you push the envelope all the time. So that puts a huge burden on the processes we have internally for validating new silicon and for validating systems as a whole so that memory and mass storage and the processor can work together."

The measure of a company like Intel is that it can maintain high-quality levels while pushing that innovation envelope. Such commitment was evident earlier this year when the company retooled its processor road map, pulling back on its planned "Tejas" CPU because it ran too hot and deciding instead to move quickly to multicore chips. The dual-core devices use two processors on a single semiconductor die to keep power dissipation down while delivering high throughput.

"Balancing the rate of technological progress with the need for quality and reliability has been our challenge," says Intel CEO Craig Barrett. "While complexities grow and the pace seems to quicken, there are no shortcuts. We must continue our investment in R&D and advanced manufacturing, and we must work with our customers and partners to make technology more useful."

But new features and high reliability don't tell the whole story. VARs want to be sure a product is built for use in real-world systems. In this regard, Intel's processors tied with Samsung's displays, both scoring 89s for compatibility and ease of integration. Seagate's Cheetah and Barracuda enterprise disk drives placed high in the ease-of-integration criterion (scoring 83).

Four other vendors were tightly clustered right below: NEC/Mitsubishi's MultiSync, Diamond Pro and related families of displays (82), Xerox's Phaser network color printers (82), Maxtor's MaXLine and Atlas enterprise disk drives (81), and ViewSonic's displays (81).

On the software side, innovation can be tougher to quantify, though VARs know it when they see it. In security management software, Computer Associates and Cisco tied for the overall ARC category. But in VARs' ratings of overall product innovation, Trend Micro's Control Manager edged out both CA's eTrust line and Cisco's Threat Response software (scores of 78, 76 and 72, respectively).

"To a large degree, they're all going to get you there," says Jeb Carter, president of DefenderSoft, a security VAR in Dallas, who is a CA advocate. "That being said, it's very easy to implement [CA's] software. It has got good reinstall/deinstall features, and the management features are built in."

In enterprise storage management software, the competitors were less closely stacked. There, Tivoli Storage Manager ranked decisively higher on innovation than EMC's ControlCenter line (scoring 78 vs. 70). In the Web infrastructure and software category, IBM's WebSphere Studio and VisualAge packages outpaced Microsoft's .Net family of tools (scoring 75 to 71). In data management software, the two vendors were more closely stacked on innovation, with IBM's DB2 (73) squeaking by Microsoft's SQL Server (72).

Numerical rankings aside, in the real world there's still one tried-and-true way to determine whether a product really cuts the mustard. "The ultimate test of product reliability is: How many phone calls do you get?" says Rick Fowler, product line manager for Novell's NetWare, which tied Microsoft for product innovation in server operating systems (both scoring 76). "When users can't log on, or can't print, that's when you have to fight fires."