The 10 Biggest Channel Stories Of 2014

The Year That Was In The Channel

The channel sure does know how to keep things interesting. From major security breaches, to partner program overhauls and new technologies shaking up the industry, there was no shortage of change and turmoil for solution providers in 2014.

Here are the ten biggest channel stories of the year.

10. The Rebirth Of The PC

After years of writing its obituary, the channel sang a different tune in 2014 for the PC. Vendors, distributors and VARs alike agreed they saw a boost this year from rising PC sales, driven in large part by a refresh cycle due to the end of support for XP in April. VARs said that they had seen sales soar more than 40 percent due to the end of XP support. Partners also cheered as chip-maker Intel raised revenue estimates from $12.5 billion to $13.5 billion on the promise of better PC sales due to the end of support for XP. As 2014 comes to a close, most channel companies are saying that the tailwinds from the boost are coming to a close, but they expect PC sales to remain strong going forward.

9. Managed Services

It's not new news to the channel, but the market's transition to managed services was still a major part of 2014. What is different is that managed service providers are recognizing the importance of depth over breadth, picking up specialties in verticals or technologies. VARs have taken different approaches to the transition, from a slow transition to a big acquisition or even starting from scratch, but for everybody it has meant a big change and certainly a big investment over the past year. While many businesses are getting there, the story for the industry as a whole isn't over yet as 2014 comes to a close.

8. Executive Shakeups At Juniper

It's been a busy year for executive shakeups at Juniper. Over the past 18 months, Juniper has lost its CEO Shaygan Kheradpir and numerous channel executives, most recently of which was worldwide channel chief David Helfer. On top of that, partners said they have seen significant turnover in channel account managers and channel SEs. The result has been a lack of clarity for Juniper's vision for products and its channel program, partners said.

"We have a lot invested in Juniper and we are clearly rooting for their success and continued growth," one partner told CRN. "But I think it's really important to have a consistent vision and messaging so that customers understand things, and I can't tell you I totally know their direction."

7. FUD Wars

As IBM made waves this year with its x86 sale to Lenovo, HP didn't waste time moving in on its partners. The campaign, which HP dubbed the "Smart Choice" campaign, targeted IBM partners feeling uncertainty after the acquisition. They didn't try to keep it quiet, either, taking out a full-page advertisement in The New York Times, questioning IBM and pushing IBM customers toward 48 of HP's top Platinum partners.

The campaign paid off, said Antonio Neri, senior vice president and general manager for HP Servers and HP Networking, with a steadily rising server sales pipeline.

Later in the year, Dell CEO Michael Dell turned the tables on HP and used news of the company's impending split to stir up channel sentiment against it.

In the end, it means channel partners are in demand.

6. The Rise And Fall Of Torrey Point

The rise and fall of Torrey Point, a star Juniper partner, illustrated how far some vendors and VARs will go to get ahead in the channel. A series of lawsuits alleged that Torrey Point, a rapidly growing solution provider and Juniper's 2011 Partner Of The Year for the Americas, was generating extra revenue by secretly selling Juniper equipment to rival Cisco, ultimately leading to its deauthorization as a Juniper partner. However, former employees told CRN that this was part of a larger program by Cisco for the purpose of deconstructing and analyzing competitive products. Documents also showed similar practices occurring with Alcatel-Lucent. Cisco denied the practice, saying it only bought competitors' equipment to make sure its own IP was being protected.

5. Microsoft Cutting Cloud Commissions

Microsoft had partners up in arms earlier this year as it announced fee cuts for Office 365, Exchange Online and other cloud services, starting Jan. 25. The effects were felt by partners small and large, with major solution providers such as Insight posting expected earnings to drop by $15 to $20 million, a number that was later lowered to $10 to $15 million. Partners said at the time that the changes were having them reevaluate their portfolios and possibly offer more Google services.

"Microsoft is [screwing] its partners," said the CEO for one Microsoft cloud services partner at the time. "It's total [crap]. I am not happy about this."

4. Big Vendors Head To Splitsville

Within days of one another, both Hewlett-Packard and Symantec announced they would each be splitting in half, causing waves across the channel. HP announced it would be splitting into two $56 billion publicly traded companies, one focused on PCs and Printing and the other on enterprise computing. For its part, Symantec announced that it would split into separate security and storage companies. Both moves left partners scrambling to figure out what it meant for them, with both HP and Symantec assuring partners that it meant growth for the channel.

3. Acquisition Overload

Acquisitions have been happening left and right in the channel. Throughout the year, blockbuster acquisitions such as Lenovo acquiring the IBM x86 server business and Google's Motorola business, FireEye acquiring Mandiant, Fishnet acquiring Accuvant, VMware acquiring Airwatch and Cisco acquiring Metacloud have kept solution providers on their toes. However, solution providers themselves have also been making some big buys, including Dimension Data's acquisition of Nexus, to expand into new verticals and markets.

2. Lenovo Gets Massive Channel Partner Influx

With two blockbuster acquisitions this year, Lenovo has seen a massive influx of new channel partners. At the beginning of October, Lenovo closed its $2.1 billion acquisition of the IBM x86 server business, bringing it head-to-head with Dell and HP as the third largest commodity x86 server maker. At the end of the same month, Lenovo closed its $2.9 billion acquisition of Motorola Mobility from Google, positioning it as the third largest smartphone vendor in the world. Lenovo assured partners at the time that the transitions would be smooth for partners and would open up new opportunities across the Lenovo portfolio.

1. Security Breaches

Security has been top of mind for customers and solution providers this year with a number of high profile breaches. Major retailers such as Target, eBay and Home Depot made headlines as they were hit by breaches that stole millions of customers' credit card data. Most recently, Sony revealed it had been hacked by a group calling itself the Guardians of Peace. The attacks put increased emphasis on PCI compliance, encryption and prompted a new level of security awareness across all industries.