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Newsletter Home > May, 2009
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Westcon Launches Program to Help Partners Navigate the Stim
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Specialty distributor Westcon has launched a series of webinars and online resources aimed at helping allied channel partners pursue IT projects within the $787 billion federal Stimulus Act.
More than 700 partners attended the first four online events, according to Ron Sheps, vertical markets manager at Westcon North America, who describes the campaign as an effort to bring together the resources, spotlight the projects, and identify the contact points.
"Most of the projects have IT ramifications," he said. "For example, that construction project has wireless communication needs. And with that wireless comes the need for security and all the different product sets associated with that project. We dissect the IT component, pull it all together, try to produce a diagram describing it, show some add-on options that might have a higher margin and we literally walk them through the sales process."
With his focus on vertical markets, Sheps noted that he has assembled quite an array of resources that help him to track down the opportunities, find the right people and decipher the language of the federal government into something relatively concise. "Mostly it's a matter of following the money," he said.
In addition to the webinars that provide the necessary foundation, Westcon provides the partners with various online resources offering grant information, project leads, white papers, etc. Partners proactively find the leads online, as opposed to having them pushed to them, as a means of preserving an even playing field. A deal registration program is available.
Since the initiative is still in start-up mode, Westcon has not had any issues with channel conflict, or much to report in the way of finalized engagements, but Sheps says they are engaged in dozens of ongoing deals.
The same web site offers similar resources for health care and selected other verticals. Overall access is limited to registered partners who are approved by the distributor based on their current or potential business relationship.
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Brocade Strikes OEM Deal with IBM; Revamps Channel Program
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IBM will re-brand and sell Brocade's enterprise network products through a new OEM deal. The agreement, announced April 28th, extends the storage area networking alliance that was already in place between the two companies and will be delivered through IBM's direct sales force and indirect channel partners.
The products, which were brought to Brocade through last year's acquisition of Foundry Networks, will be re-flagged with m-, c-, s-, and g-series designations, replacing FastIron designations using the same respective letters.
Brocade is also in the process of redesigning its channel program to meet the needs of both its storage channels and its legacy Foundry channels, about 200 of whom were briefed on the plans at last month's Brocade Partner Summit in Las Vegas.
"There are a lot of gigantic companies that are angry with each other, and we are in position to be the beneficiaries." CEO Mike Klayko told the gathering. One can surmise that Cisco's Unified Computing System strategy figures heavily into that statement, and is also the likely catalyst in the OEM agreement with IBM.
Klayko also told the conference that there is a strong opportunity for the sale of networking and storage products despite the economic downturn. He cited statistics that bandwidth consumption is growing 65% compounded annually while IT budgets are flat, adding that Brocade is targeting customers where his company can drive at least 30% out of their IT costs.
The forthcoming channel program is expected to include the full range of components, including deal registration, marketing/sales support, demo gear, marketing tools, and market development funds and the standard three levels of partner certification plus distribution. More details are expected by the end of May.
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Cisco Offers Partners a Bigger Bite at the Core
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Cisco has rolled out new incentives aimed at encouraging channel partners to more actively hunt routing and switching sales opportunities.
"We have an installed base of about 23 billion dollars in network core products that are more than five years old and ready to be upgraded," explained Cisco senior director John Growdon. "The problem has been that there's often not enough margin attached to these upgrades to justify the amount of work it takes to do it. So we're providing a series of initiatives to turn this around."
The initiatives are based on Cisco's "Navigate2Accelerate" strategy, which was announced last fall as a means of helping partners survive the economic downturn and also be well-positioned to capitalize on the eventual upturn, whenever that might occur. As part of last year's campaign, the company rolled out a 10% back-end rebate on switches and a 5% back-end rebate on routers. This incentive continues to be administered through Cisco's Opportunity Incentive Program (OIP), which would fall under the general category of deal registration programs.
Through their most recent announcement, Cisco has expanded this program beyond its former North American borders and is now being offered globally. The company has also upped the ante by increasing the rebate for switches from 10% to 15%.
Other adjustments include lower-priced bundles on switches and the expansion of the limited lifetime warranty on the Catalyst portfolio to include all of the 2000 and 3000 series and roughly half of the 4000 series. Similar consistency was added to Cisco's policy for software.
"This is a really strong lever that will help the partner to find these customers who need to upgrade and update their networks in order to support both current and future enhancements," summarized Growdon. This program fundamentally transforms their incentive structure in order to make that happen."
The move comes at virtually the same time that Cisco reported a profit of $1.35 billion on revenues of 8.16 billion for Fiscal Q3, which was roughly one-fourth lower than the year-ago quarter. CEO John Chambers told analysts that customers are sensing a leveling off of the economy; a necessary prelude to an upturn.
Such news might help to establish the frame of mind that customers would need in order to invest in core infrastructure refresh, particularly if the gear currently in place continues to be serviceable, if not state-of-the-art.
Microsoft Adds Heavy Hitters to Online Services Partner Base
Accenture, Avanade and EDS, an HP company, have each signed agreements related to Microsoft Online Services. EDS has signed both a reseller agreement and a go-to-market agreement for the Business Productivity Online Suite, which includes Microsoft Exchange Online, SharePoint Online, Office Communications Online and Office Live Meeting. With this agreement, EDS becomes Microsoft's largest channel partner for the Business Productivity Online Suite.
Accenture and Avanade are the first Microsoft partners to sign the Microsoft Online Services Partner Advisor agreement for large enterprises. As a part of this agreement, Accenture and Avanade will offer IT services for customers looking to migrate from on-premises solutions to the Business Productivity Online Suite. These value-added services include cloud strategy and assessment, migration services, enterprise application integration, user communications and training, and other IT outsourcing services.
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On The Other Hand - When the Elephants Dance
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By: Ken Presti
Certain things in life signal profound and irrevocable change. That change can be good, perhaps even better than the status quo, but things certainly won't remain the same. For some of us, that might be the arrival of our first-born child. For me, it was the first time an attractive, young woman called me "sir." I looked over my shoulder to see the old man who must have been standing behind me, but there was no one there. In both cases, the new father or the newly middle-aged man, it is clear that we had moved from one realm to another. Things had changed.
Sometimes it works the same way for large corporations.
When Cisco Systems announced its Unified Computing System strategy weeks ago, it kicked off a new phase in the IT world. Long-standing relationships with IBM and HP were suddenly "on the table", to say the least. Competitors who had been previously bouncing against walls trying to make some impact within the dominant paradigm suddenly heard a window slide open. Channel partners stared at the prospect of needing to make some hard choices down the road. Regardless of how things unfold, some folks will be happy with the outcome, other folks, not so much. But however it turns out, things will indeed be different.
From some points of view, the UCS announcement is nothing short of the gauntlet thrown down. From Cisco's point of view I think it's not only a matter of moving into a new market in hopes of keeping Wall Street's appetites fed, I believe it's ultimately a drive to protect its relevance if cloud computing lives up to its billing. The primary complexity and the opportunity for differentiation must lie within their product sets in order for them to retain their current industry position. There would be nothing worse than becoming purveyors of fat, dumb pipes, from Cisco's perspective. They haven't let that happen before, and they're certainly working to prevent it now.
How well the UCS strategy works will ultimately depend on a multitude of factors. One of the bigger factors will be about who can win the hearts and minds of the high-end channel in the near-term and also the mid-range channel over the long term. If "hearts and minds" is a bit too intangible, then let's drop that term and say that this portion of success will be driven by whomever can put the best value proposition on the table for those channel partners, both in terms of compensation and also the ability to open doors for those partners that aren't being opened by anyone else. This month's article about Westcon's campaign to help channel partners earn stimulus dollars is an outstanding example of finding creative ways to help partners raise their businesses to higher levels.
In addition to the carrot, there is also the stick. As the large vendors become increasingly polarized, some may become punitive if they see partners taking deals in one direction as opposed to another. This tactic will be even more dangerous than usual, because in this case there are other large vendors vying for partner influence. And whoever can best influence those routes to the customer will have a huge advantage over those who alienate those routes to the customer. Thus, the channel as an aggregated force will have a huge influence on who wins and who comes up short.
It's a totally different perspective when you turn the telescope around. While the partners have enormous impact when considered as an aggregated group, individual partners are still…well… individual partners, limited in strength and often in competition with one another. They will no doubt tread carefully to avoid alienating key vendors. On the other hand, alienating one might also strengthen their position with another. So the channel's ultimate situation become's a virtual Rubik's Cube of risk and opportunity.
Let the games begin.
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