Al Senia: March 2008 Archives

If there's any doubt the outsourcing market is alive and well, it was put to rest today when Rotal Dutch Shell decided to spend $4 billion during the next five years to improve its worldwide IT and telecom support. The oil giant signed a $1 billion deal with systems integrator EDS to manage end-user computing. Other agreements went to service providers AT&T and a unit of Deutsche Telecom.

There's a superb, must-read article published today by John Dvorak on Marketwatch raising the question of whether the U.S. government's relentless, warrantless (and maybe illegal?) spying practices are wreaking havoc with Web collaborative tools such as SaaS and managed services. The point being, will companies stop using tools that rely on remote databases, given the current U.S. regime's assertion of unconstrained spying authority?

Virtualization is becoming big business to the channel. This fact became even more clear when mainstream distributor Tech Data Corp. announced an exclusive agreement to distribute Parallels Virtuozzo Solution server virtualization software.

Worldwide PC growth is slowing a bit, according to the latest numbers from research firm Gartner, but that should provide a real opportunity for the channel to capitalize on its strength in partnering. Gartner predicts a 10.9 percent growth rate this year, which is hardly shabby.

Dell, which is still making XP available as an operating system of choice for some systems on its Web site, has decided to help ease the path to Vista.

Service providers seem to be throwing in the towel on Wi-Fi (or at least the municipal flavor of it). That's one reason why Google deserves some praise for its new "white-space airwaves" plan to broadcast wireless services over former television spectrum.   

Microsoft's long-awaited Vista SP1 update has now gone public. As is typical in such cases, some are finding that the update process isn't all it should be. But what's really interesting it that there are widely different takes developing about the issue. Our sister Web site, InternetNews, has an interesting piece about how there are relatively few problems -- and Microsoft provided warnings about those beforehand. The article notes that so far it hasn't been the debacle that users experienced with earlier updates for XP.

However, CMP's Channel Web has quite a different story that highlights user "rage" against the Vista SP 1 update. Wow, are we talking about the same product here? Is there actual rage flowing in the channel's streets over this update? None of the other technology news sites seem to carrying much about this so far, so maybe there's more drama than substance here? Let me know what kind of Vista experience you are having.

Here's some interesting news from research firm M:Metrics: Apple's iPhone has become the most popular device for accessing news and information on the mobile Web; some 85 percent of iPhone users used the device to access news in January. Nearly one-third of users watch mobile TV, and close to one- half use it as a social networking tool. This is happening at a time when Apple has opened up the iPhone to third-party developers.

In fact, it isn't just the iPhone that's attracting dramatic interest. As mobile devices tranform into small personal computers, Nokia devices and the BlackBerry are also igniting mobile access. Executives at Google Mobile report they are seeing a surge in mobile Web use. Many of these devices already have a place in the enterprise market. Clearly, channel partners ignore the potential of smartphones at their own peril. There's plenty of development opportunities here, as well as the potential to package these devices as part of a mobile sales force solution in both the enterprise and SMB spaces, especially in vertical markets such as real estate and insurance.

Now that the proposed Microsoft deal for Yahoo seems more likely to happen, attention is turning to the potential impact it would have on the Web. Eric Schmidt, the CEO of chief rival Google, is quoted today as saying such a merger "would be bad for the Internet" because it would threaten openness and innovation. This argument seems a bit far-fetched, since a combined entity would pose more competition for Web giant Google than Yahoo would alone, and that should foster a more competitive environment. Nevertheless, the issue is attracting worldwide attention because Schmidt's remarks were made at a Beijing gathering.

Seems to me the real issue here is whether Microsoft is going to wind up overpaying for a battered brand (think Time Warner buying AOL). The channel has a stake in the outcome: Microsoft has been a lot more dedicated to the channel than has Google, and any resultant Web-centric strategy that Microsoft develops is more likely to include the channel as a partner.

Microsoft Chairman Bill Gates predicts a bright future for speech recognition, integrated touch-screen technology and tablet computers, all areas that could wind up becoming more important for VARs down the road. It's always interesting when industry mavens like Gates decide to look ahead and go public with their thoughts. He's just given a speech in northern Virgina, where he outlined the tech changes being driven by the corporate and academic sectors (although I always find it a lot more intriguing to see what military research agencies like DARPA are up to because they really think outside the box.)

Gates also predicts that more software services are going to be delivered over the Internet, which sure seems to validate the channel's growing obsession with SaaS. Also on the horizon: More collaborative technologies; the marriage of the Web and television; and the rise of 3-D computing (VARs should love that one.) There's a lot to chew on here, but one thing is certainly clear: Despite worries of economic slowdowns, there's plenty of new opportunity ahead for channel players.

Just a few months ago, the telecom blogosphere was abuzz with breathless reports that Google would set the mobile phone industry ablaze with new products that would blow away Apple's iPhone and other competitors. The reports got pretty tantalizing, and bets were placed on just which vendors and carriers Google would buddy up with. Well, as is so often the case in the blogosphere, the buzz turned out to be a bomb: Google's play was really software, not hardware, and the GooglePhone never materialized.

Now it's the channel's turn to be tantalized. Is Google headed in this direction? Ziff's Channel Insider has an interesting package of articles about what may (or may not) be Google's Secret Channel Plans bandied about at an Ingram channel event in New Orleans. Interesting reading, for sure, but you be the judge of whether is poised to disrupt or dismay the current channel hierarchy. I've got my doubts.

Interesting channel news developing today. Oracle has another shake-up in its executive channel ranks. The company has named Judson Althoff to head its channel operation. There has been instability in Oracle's channel program all this year; the company has named two new channel chiefs in the past two months. Ziff's Channel Insider site has an interesting news package about Oracle's channel woes.

Over at HP, which we note has been helped greatly by the channel in its market-share battle with Dell, there are new if vague pledges of channel support. HP Veep Adrian Jones tells channel partners in LA that there is more support coming in the way of MDF, training and marketing areas. But the report on CMP's Channel Web is mighty vague about precisely how much or when or when. Well, promises are better than nothing...

Sales into the SMB space have always been critical to channel partners. Enterprise investment tends to lag behind small business, which tends to stay more vibrant, diverse and flexible during a downtown. Tech Data's latest numbers appear to support this. Ziff's Channel Insider site has an interesting interview with Tech Data's CEO  Bob Dutkowsky that underscores this. Do other channel players see the same trend?.

Channel distribution giant Tech Data Corp. reports its quarterly profit rose 39 percent, thanks to gross margin improvements and a boost in worldwide sales. Good news, but can the flush times continue? Companies like Tech Data are doing a good job of improving their inventory management and driving down costs, but they still can be overwhelmed by the sliding economy, especially if it impacts IT products and services.

Looking ahead, CEO Robert Dutkowsky says in a statement that the broader economic environment "remains an important consideration, but we remain cautiously optimistic." Sales and profits beat quarterly Wall Street estimates this time around. Looking forward, the company projects $5.65 to $5.8 billion in sales, smack in the middle of consensus estimates. Tech Data's numbers show that at least for the moment, it's still good for the channel.

Channel sites are abuzz today with news from Microsoft at Germany's Cebit show.

Apparently, the vendor is now going to make available to all customers beta versions of SharePoint and Microsoft Exchange. Previously, Microsoft had sold these directly to enterprise users, but cut the channel in on SMB sales. It's difficult to know what Microsoft is thinking here (except that it sees a great opportunity to take more business direct via the Web).This could set the stage for some serious channel conflict. Our InternetNews sister site has the Reuters report here.

See Ziff's take on this surprise here. CMP's ChannelWeb comment on the issue (buried at the story's end) is here. InfoWorld, meanwhile, reports that Bill Gates is busy crowing about SharePoint's growing success (probably not with the channel, I bet) at a Microsoft conference in Seattle. All, in all, a strange assortment of news from Microsoft.