News Channel Life By Keith Newman, ChannelMedia Editor

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Special Note to our Readers: ChannelMedia is looking for companies for our newsletter that attended VARVision and System Builder Summit. Feel free to email us to schedule time or send us appropriate information. Thanks, Keith (kanewman@sbcglobal.net) or www.channel-media.com.

In most corners of the IT Channel Universe, demand is softening, margins are declining and the general mood is dour. Big surprise. After many years of growth it’s hard to change gears to fit this negative and sluggish market environment. But we are all suffering through delayed decisions, procrastination and the like.

The better idea would be to do some business operation tune-ups and one area I would suggest needs some focus is the area of MDF spending. I’m constantly amazed at how many vendors don’t know who their largest partners are and who are their most profitable partners. To support that point, I’ve been interviewing channel players from several of the thought leaders from the vendor and reseller side of the house to review goals, strategies, priorities and administrative processes for managing promotional spending. Guess what? Correct you are. There are so many that either don’t know what they spend with these partners, what their competition is spending and what they are getting in return on their investment. Folks, now is the time to take control of this under-leveraged and poorly strategized chunk of your business and turn it around.

The reasons are simple:

• In a down market you have to work harder to stay even
• Budgets are scrutinized more closely
• Spending without a specific goal or measurability is more likely to be cut.
  

Here are some very basic steps that can move forward:

• Set a goal and then get into some homework
• Create a list of your key partners.
• Look at how much they provide and how much you spend with each of them.
• Look at the total ROI.
• And then ask if you are getting an adequate return and, more importantly, how can you increase the effectiveness of this partnership.

This is just a simple validation step, to overhaul the entire effort takes a lot of time to collect information but then get the support of all stakeholders (internal and external). But in between those long sales cycles this is the perfect time to get yourself out of the “black hole” and retake control of your spending and budgets.

To put it another way: NOW is the time to fine tune your business before someone tunes it for you.

Keith Newman is the Editor of ChannelMedia and has more than 12 years studying IT and Channel-related issues. Any comments, thoughts and suggestions should be sent directly to kanewman@sbcglobal.net. Contributions are welcome. Subscriptions are free. You can also set up meeting requests at VARVision by sending an email to the same address.

NEWS

Channel Digest
by ChannelMedia Staff

Salesforce.com and PricewaterhouseCoopers announced a strategic alliance designed to integrate their combined CRM technology and expertise. As part of its Customer Value Improvement Program, PricewaterhouseCoopers has trained and certified a team of salesforce.com technology experts who work closely with salesforce.com's CRM process and best practices consultants to help clients increase sales, improve customer profitability, retention and service, and expand their customer base.

"Salesforce.com's technology platform has strong enterprise capabilities and its application utility model focuses on business improvement rather than IT infrastructure," said Paul Gulbin, a director at PricewaterhouseCoopers. "We can implement salesforce.com in 30 days or less, including work on process performance. The value proposition of salesforce.com complements ours perfectly -- we are going to market with a practical offering that delivers measurable ROI in a specific timeframe."

VMC Consulting Corp., a wholly owned subsidiary of Volt Information Sciences and a leading provider of turnkey outsource solutions for software vendors and corporate IT organizations, announced a merger with Volt Integrated Solutions Group (VISG), a global IT consulting division of Volt, forming a new consolidated entity focused on delivering innovative outsourced services and consulting to customers across multiple industries. With the merger, the new VMC Consulting organization extends its capabilities to serve customers either on-premise or at VMC's four technology centers. The Company's expanded outsource and consulting services will include: software testing, quality assurance and development; hardware/firmware testing; OEM solutions; asset and logistics management; clinical research; system integration; technical sales and support; technical communications; and IT consulting. Volt expects the merger to strengthen VMC Consulting's market position as a leading provider of cost-effective, flexible solutions for managing and expediting project-based services for businesses and government agencies.

"This combination provides us with additional resources and synergies to enhance our service capabilities for our existing and future clients, including becoming a recognized provider in the systems integration market," said Glenn Hoogerwerf, General Manager of VMC Consulting, in announcing the consolidation. "We look forward to continuing and expanding professional relationships with our industry-leading clients, both in the U.S. and across the globe."

Imperial Technology, the company accelerating application performance, announced today the MegaRam-10000, its newest solid state accelerator featuring up to one terabyte of zero latency solid state storage capacity. "Several years ago, the thought of deploying a Terabyte of solid state storage was incomprehensible but so was having a Petabyte of rotating storage yet today, enterprises have both² said Robert David, CEO and President, Imperial Technology. It¹s really just a matter of increased scale. The relative proportions haven¹t changed nor have the compelling business reasons for deploying zero latency storage solutions like the MegaRam-10000. The MegaRam-10000 sets a new standard for a multi-location and enterprise-wide storage resource. Geared for the most transaction-intensive and mission critical environments, the MegaRam-10000¹s massively scalable architecture is targeted to grid computing, life science and biomedical research, large-scale engineering, and time-sensitive geophysical applications as well as traditional OLTP environments. The MegaRam-10000 responds to a growing awareness by transaction-oriented enterprises that relying upon traditional cached arrays to meet transaction levels is increasingly costly when utilization and management costs are taken into account. Today¹s large-capacity-per-spindle drives deliver phenomenal $/MB but performance per spindle measured in terms of data access throughput has dropped correspondingly. Enterprises have attempted to compensate by buying more spindles per subsystem which has resulted in lower capacity utilization and increased management costs. ³Adding more drives to a cached array is like adding more gas to the tank of your car so that the car will go faster. What you really need is not more gas but a car specifically designed to go faster,² adds David.

³Significant decreases in memory chips have allowed Imperial to lower the selling price of solid state storage by up to 90% compared to three years ago a phenomenal decrease,² said Marlin Kovaleski, Vice President Sales, Imperial Technology. ³That price decrease and the resultant upswing in large capacity system demand has clearly demonstrated to us that users do need high capacity solutions as evidenced by 100GB+ orders at eBay, AT&T, Logitech, Raytheon and others. It¹s now practical to put an entire database in solid state memory. The MegaRam-10000 is available immediately starting at $350,000. A fully configured 1TB subsystem with 48 fibre channel ports lists at $2 million.

The Support Net Division of Arrow Electronics, one of the largest value-added distributors of IBM enterprise products and integration services, introduced its "extreme support" theme at the PartnerWorld 2003 Conference to showcase the many ways Support Net helps its customers bolster sales of IBM midrange and enterprise products. "The `extreme support' theme is about proving to resellers that Arrow is as focused on growing their business and revenue opportunities as they are," said Eric Williams, executive vice president, Support Net Division. "We see our role as the partner who brings together all the support and infrastructure our customers need to run - and grow - their business. This approach goes far beyond the typical sales-oriented focus you'll see throughout the rest of our industry." The Support Net Division and several of its Business Partners and independent software vendors (ISVs) will be hosting the exhibit in the Solution Center at PartnerWorld. The collaborative nature of the booth serves as an example of the cooperation that exists year-round between the distributor, IBM and their mutual reseller customers. Support Net and its partners have aligned on many new initiatives during 2002 that will be built upon in 2003.

IBM plans to offer it PowerPC chips to interested third parties under a new licensing plan dubbed the open PowerPC licensing program with the hope that it would help IBM establish its PowerPC processor more firmly in the marketplace. Additionally, the program is tied to IBM’s new chip foundry initiative in which the company offers to manufacture chips for licensees at its facilities or elsewhere at the licensees’ prerogative, and offers its manufacturing techniques, facilities and engineers to third-party chip companies that do not maintain their own manufacturing facilities. Initially, IBM plans to limit the program to its PowerPC 400 series processor cores, which include a processor core, memory, and other elements needed to power a device. These are not typically used in desktops or servers, but are used in PDAs and set-top boxes.

Samsung SDS America, has partnered with cSoftGroup, a specialty software and consultancy firm, to collaboratively produce a PDA-based warehouse/shipping software for its ERP solution- Bizentro. This new software will permit use of the iPAQ handheld PDA for goods receipt, warehouse goods movements, and shipping functions. The data gathered through the handheld can then be transferred to and stored within Bizentro databases with offline docking for upload/download through the cSoftGroup software systems. "This product extension preserves our application focus while providing the best in integration architecture," said Jacksy Verghese, Technical Manager for Samsung SDS America. "The modular design and API-driven interfaces provided by cSoftGroup complement both our technical environment and the way our customers implement and use our software." Kumar Vidadala of cSoftGroup stated, "We look forward to the prospect of implementing several types of API's and integration methods for Samsung SDS. Our quick-study, modular approach with advanced testing will help us keep up with this technology leader." Implementation of the new software at the first joint customer is planned during first quarter 2003. Subsequent clients and new applications are planned for second quarter and beyond.

NEWS SMB Infrastructures Take a Step Toward Mobility in 2003 By James Browning

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Demand from customers and business partners, coupled with price decreases in key technologies, will drive small and midsize business IT spending in the areas of application servers and mobility.

What you need to know: As SMBs increase their adoption of the Internet and enhance their application portfolios by implementing customer relationship management and other business solutions, application servers will find their way into their SMB data centers — whether planned or unplanned. By 2005, more than 70 percent of midsize businesses will have acquired application server technology and at least 35 percent of midsize businesses will have application servers from more than one vendor (0.7 probability).

Mobile PC growth (in units) worldwide for SMBs will increase by 17 percent year over year in 2003 and 2004. Today, low price drives the trend in the SMB market toward mobile PCs. The majority of the growth in mobile PCs will come from established users replacing deskbound PCs, rather than new users entering the market. When purchasing mobile PCs, SMBs must consider more than just the attractive price point. Understanding the additional support needed for a mobile PC compared with a desktop PC is a key factor.

WLAN technology is now a viable option for SMBs. Sixty percent of midsize businesses will deploy WLANs within their premises by year-end 2003 (0.7 probability). The increase in SMB mobile PC users will increase investments in wireless solutions as major PC vendors are packaging wireless capability in their products. Some PC vendors have already started offering a WLAN solution package to SMBs.

Analysis:
In 2002, small and midsize businesses (SMBs) focused much of their IT spending on improving the service levels and total cost of ownership (TCO) of their established infrastructures. We expect this pattern to continue through 2003. SMBs will continue to defer IT technology purchases until they see signs of sustained profitability in their own businesses. IT infrastructure purchases also will be scrutinized for their contribution to business value and the bottom line. Where possible, SMBs will delay purchases as a tactical cost-saving measure. However, to remain competitive, every enterprise needs a steady diet of new development and enhancements to their infrastructures. Some of the key areas in which SMBs will invest in 2003 will be:

• Hardware upgrades
• Mobility
• Application extension and integration

Prediction: SMBs will convert 15 percent of their desktops to mobile PCs through 2005.
The decreasing price difference between desktop and mobile PCs, combined with extremely low price points for notebooks, have encouraged some classes of users within SMBs to switch from desktop machines to notebooks. Although price and flexibility are the main drivers, SMBs will soon realize the business benefits of mobility. They will also realize the challenges of supporting a mobile environment.

Impact on 2003: Lower prices do not necessarily imply lower costs. Mobile PCs are more complex and difficult to manage than desktops. They require more technical support and services, and have shorter life spans than desktop PCs. The TCO is higher for mobile PCs than it is for desktop PCs. Broader support and warranties (national coverage) will be required as these devices travel outside locations where desktop PCs are normally used. SMB help desks and support personnel won't be prepared for users' changing needs if they don't plan accordingly. Mobility is not the major driver in the decision by SMBs to increase their adoption of mobile PCs today. However, the awareness that they can go mobile when they are ready strengthens the justification to invest in mobile PCs. As mobile PCs continue to gain traction, user knowledge and expectations will mature, with the following effects:

• Robust mobile service will be demanded by many users.
• Wireless LANs (WLANs) will become critical components for SMBs seeking to improve business efficiencies in a wide variety of processes, including inventory, shipping and manufacturing.
• SMB business units will systematically investigate their internal and external business processes to determine where they can be improved by mobility.

Reacting in 2003: SMBs must understand and plan for the additional support needed for mobile PCs. The increase in mobile PCs will require SMBs to update their networking infrastructures (that is, dial-up access, broadband, virtual private network, help desk support and so on) to support roving users. Asset management becomes more difficult. Theft and security become bigger issues. Asset disposition for old PCs becomes a concern. SMBs need to evaluate the total impact that mobile PCs will have on their IT infrastructures, business processes, and end-user culture. If these increased demands fall outside the reach of their support resources, SMBs will need outside help. For example, Verizon IT offers a mobile device management service that can help with the assessment of mobile strategies and end-user requirements, and the ongoing technical support and administration of the new infrastructure layer. Branded notebook vendors should look closely at the feasibility of creating specific offerings for the white-box channel to extend their reach into the SMB space.

Prediction: More than half of midsize businesses will invest in wireless LANs by 2005.The SMB market will be more than one-third of the WLAN market by value by 2006. WLAN technology is now a viable option for SMBs. Lower operating costs and solid performance make WLANs a networking answer in several SMB environments. WLAN offers businesses in-building or campus-wide communication for mobile and roaming users, and a lower-cost alternative to installing a new wired network. While 60 percent of SMBs will invest in WLANs in 2003, those that don't, won't see the "business need" for WLANs in their enterprises. This most likely can be attributed to the immaturity of public hotspots and the lack of industry-specific business requirements.

Impact on 2003: Sixty percent of midsize businesses will deploy WLANs within their premises by year-end 2003 (0.7 probability). Although Gartner Research shows that the TCO of a WLAN can be less than the TCO of a wired system, the first year of a WLAN deployment carries some of the heaviest costs because enterprises must make a large technology investment in the following:

• Necessary equipment such as access points and network interface cards
• Needed infrastructure for power
• Hubs and switches
• Cabling and spare parts
• New skills

The increase in SMB mobile PC users will also drive investments in WLAN solutions, as they become aware of the inherent flexibility and benefits of mobility. Most major PC vendors are packaging wireless capability in their mobile PCs.

Reacting in 2003: Given the maturity and flexibility of WLAN technology, most business and IT managers in SMBs need to plan for adoption of WLANs in 2003 and through 2006. Such planning will include:

• Preparing to support WLAN technology and understanding its impact on other technologies, such as PCs, bandwidth and security. Because wireless skills aren't prevalent in many SMBs, they must alter their staffing and training plans to accommodate ongoing maintenance support of WLAN technology or consider outsourcing the task entirely — or at least the initial installation and site surveys. Many system integrators can provide such services.
• Securing their WLANs by adding on extra network security options. WLANs will also have a direct impact on the service and support requirements of end user PCs. A mobile PC with a WLAN card will be more complex to support than a wire-connected desktop device.

SMBs that have invested in WLAN technology to explore its flexibility and to reduce operating costs, will experience some soft benefits and will probably break even on their investment in two or three years. However, there is a bigger opportunity to improve return on investment (ROI) by linking WLANs with the appropriate enterprise applications (enterprise resource planning, supply chain management, customer relationship management). Through 2004, more than 60 percent of all WLAN implementations will include some type of extension to vertical applications (0.7 probability).

Prediction: Midsize businesses increasingly will adopt application servers — knowingly or not.
The midmarket will be the next battleground for application server vendors. Historically, this technology was perceived to be too expensive and complex. However, major vendors are announcing products that are expected to be affordable and manageable by SMBs. By 2005, more than 70 percent of midsize businesses will have acquired application server technology (0.7 probability).

Impact on 2003: By 2005, at least 35 percent of midsize businesses will have multiple application servers from more than one vendor (0.7 probability). These servers will creep into midsize businesses in a variety of ways. For example:

• Packaged application vendors will recommend (and sometimes require) that midsize businesses purchase a recommended application server.
• Key business partners might insist that they acquire a particular application that requires or embeds a specific application server.
• Application server technology will be embedded in other products (portals, integration platforms and development tools often embed application servers as their runtime platforms), especially in the operating systems delivered with hardware platforms.

The adoption of application servers will pose new technology and management challenges for SMBs.

Reacting in 2003: Midsize businesses must develop an understanding of application server technology and define a strategy to avoid escalating IT operations and management costs, as well as to minimize risks. They should not simply accept the technology choices recommended by their software or hardware providers. Midsize businesses should:

• Understand application server technology sufficiently to define their own technology needs
• Focus on systems that support industry standards vs. systems that are based on proprietary architectures
• Resist pressure from vendors to acquire products that have too much overhead (features that they don't need)
• Purchase only what they need and ensure that they can upgrade in the future if and when required
• Impose discipline in their purchasing policies to standardize on a minimal set of approved application servers (ideally, just one) to minimize management, maintenance and support costs

Both Java and .NET will remain popular and viable platforms through 2007. For many SMBs, Microsoft will continue to offer the most attractive option between the two platforms, balancing productivity, cost of entry and vendor support. However, Java-based solutions will remain a viable alternative. SMBs concerned with the migration risks, costs and vendor lock-in associated with .NET should explore Java-based options. This is particularly relevant to organizations with a stronger emphasis on flexibility (for example, vendor selection, cross-platform and so on) over productivity (for example, single-vendor suite, RAD tools and so on).

Key Issue
How will IT architectures evolve for small and midsize businesses in the next three years?

Many Software Licenses Go Unused, According to Recent Gartner Survey

Although lowering costs is the most common benefit cited by businesses for implementing CRM applications, a recent Gartner, Inc. (NYSE: IT and ITB) survey revealed that 41.9 percent of the total number of software licenses bought by businesses go unused.

"Buying more software licenses than needed may seem like a wise investment in the short term, but over time it costs more," said Beth Eisenfeld, research director for Gartner. "Through 2005, businesses that continue to buy more CRM software licenses than they need -- and those that deploy less than they purchase -- will incur a 20 percent to 30 percent increase in total cost of ownership compared to businesses that carefully plan their CRM software license purchases."

More often than not, businesses purchase more licenses than they need for one of three reasons, according to Gartner.

One reason is that the software vendor offers a larger discount if the business increases its initial purchase. Another reason is that the software vendor may want to position new modules in the market and offers a reduced license fee to businesses that take additional licenses, and may include free or heavily discounted modules.

"Although the business may not need additional licenses for its planned implementation, it may believe the modules could be used in the future, so it accepts the offer not understanding the costly result," said Eisenfeld.

The third reason is that the software vendor entices the buyer by stating that it is less expensive to buy now than to add on later when the business will need additional software.

"Assuming that a business will need more licenses in the future also assumes that the business will continue to grow and require the additional licenses," said Eisenfeld. "Unfortunately, that may be more of an optimistic rather than a realistic way of purchasing."

According to Gartner, all CRM applications do not produce the same level of benefits, so businesses pursuing the advantages of a customer relationship management (CRM) strategy should target specific CRM tools.

"Businesses that carefully select the most-appropriate CRM applications, match them to the benefits they are seeking, and purchase the correct number of licenses will experience a faster payback on their CRM investments than businesses that blindly implement CRM applications," said Eisenfeld.

Timo Allison has over 8 years of channel marketing experience and has been instrumental in structuring NVIDIA's channel programs for the past 2 years. Last week we caught up with Mr. Allison and dug into their business, products and channel strategies.

Q: Give us an update on business at NVIDIA
A: NVIDIA continues to grow its core GeForce graphics business while expanding into new areas such as mobile with GeForce FX Go, workstation with Quadro and core logic with nForce. We are currently the market leader for desktop and work station graphics and have increased our mobile graphics share to 25%. Over the last 10 years NVIDIA has shipped well over 200 million processors and estimate that 1 out of 3 computers are built with NVIDIA technology. Financially we are in a very strong position and reported solid earnings for our fourth quarter.

Q: New and aggressive form the product group.
A: NVIDIA has just launched the NVIDIA GeForce FX 5200, the industry's first value DirectX(r) 9.0-class graphics processing units (GPUs), and the NVIDIA GeForce FX 5600, the industry's highest performing DirectX 9.0-class GPU for the mainstream market. These products complete the top-to-bottom family of NVIDIA(r) GeForce(tm) FX, designed to bring cinematic computing to all desktop PCs. With aggressive pricing, that will enable solutions as low as $79, the GeForce FX family gives every consumer and PC gamer a platform for experiencing cinematic graphics the way it's meant to be played. We are expecting to ramp up production quickly with more than 1.5 million GeForce FX GPUs planned to be available by the end of April.

Q: Specifically, what should get the channel (system builders, VARs, etc.)
A: The availability of DirectX 9.0 GPUs at prices enable solutions from $79 to $399 will allow our channel partners the flexibility to build systems targeted for a range of price points without compromising on graphics. We have also recently improved our Select Builder program by increasing the amount of marketing and sales support available to help grow our partner's business.

Q: Finally, what is different working with a component technology that inside the product but still wants to brand itself vs. working with a brand that is outside the box or product.
A: The biggest difference is our model is that we do not sell anything directly to the end user. Our goal is to build brand preference and demand for NVIDIA technology with our channel partners effecting the sale. This is beneficial to everyone as we are never competing with the channel and we can work together with our partners to help everyone succeed.

ACP - There's $$$ For You in Refurbished Products
Since 1976 Advanced Computer Products (ACP) has created new markets for excess, class B-goods and refurbished inventory. ACP has the ability to remarket your products into 3rd tier and offshore markets thereby protecting the integrity of your present distribution channels. Give us an opportunity to show you how we can solve your inventory problems. Whether finished goods, work in process or component parts we can help. ACP has all the inventory solutions! So when your inventory problems arise give ACP a call.

Contact us: (714) 558-8822 or email David Freeman dfreeman@acpsuperstore.com.

More Margins and More Deals with More Services by John Addison

Services are the key to the business success of every solution provider and technology reseller. Midsized businesses are great customers for services. Midsized customers run lean; therefore they need more outside help. It is tougher for them to provide their own 24x7 services. They need your help to cover remote locations, and support their mobile workers.

Vendor Services

Vendors provide us with an array of services that fatten the thin margins of product sales. Customers welcome upgrading warranty service to onsite service. They want to make sure that service will be there for the next three years. After what they went through to get approval to buy from you, they do not want to go through that again for next year’s service. Let them buy multiple years of onsite service now.

Vendor partner websites are often rich with tools to sell services: brochures, boilerplate details, whitepapers, PowerPoint presentations, service upgrade programs. Use the tools. Discuss the options with your customers. Customers may only want bronze coverage for desktops, but silver for edge servers, and gold for mission-critical storage.

Financial Services

Lots of deals are stalled. Let’s face it, times are tight. Discuss leasing with every potential customer sitting on a stalled deal. A lease may be approved at a lower level. It may take the CFO, CEO, or board of directors to approve any capital expenditure. Involve your favorite leasing specialist in meeting with customers, or participating on a conference call. A government deal may need special terms about future fiscal years. A seasonal manufacturer or retailer may need the ability to skip certain months. If ten competitors are going after the business, and you are the only one with a creative financial solution, you win.

Customer support and professional services can be included in many leases. Three years of service can be included in a three year lease. The customer gets everything in one monthly payment. You get a nice improvement in margins.

Support Services

Installations can be critical. Firewalls need to be configured properly. Database performance must be optimized. Switches may need prioritization of policy-based routing. Your organization offers a variety of installation services. Vendors may offer additional specialized installations. Vendor offerings can often fit what is needed in remote locations.

Professional Services

Solution integrators and regional VARs now see most of their profits from providing professional services. Do a great job for clients, and you are rewarded with reoccurring work. Great work is the result of hiring and keeping talented people. These people need certification training, defined practices, methodologies, and project management.

Sales people are effective at selling professional services is they are provided with sales and marketing tools. Sales people need PS brochures and proposal libraries. They need entry-level engagements which are well-defined, priced, and can be sold without a major delay in getting approvals from PS management. It helps when a firm showcases its PS talent in speeches, seminars, webinars, and executive meetings. Some of these seminars can be money-makers that convert prospects into new clients.

Service Provider

Websites are normally hosted with service providers. For business continuity redundant mission-critical systems are hosted. Build your partnership with network and hosting providers.

Software is increasingly provided as subscription services that bundle software, enhancements, and support. SMB customers are early adopters of application service providers. Customer relationship management (CRM) is a hot area for ASPs. Salesforce.com is claiming more seats than Siebel. By establishing relationships with ASPs, you serve customers, become eligible for commissions from the ASPs, and gain opportunities for application integration.

Discussing customer’s service needs, can also shift the discussion for bidding on separate line items, to the need for implementing an integrated solution. Meeting some of your technical talent can persuade the customer that they need to sole source the project to your firm. Midsized businesses have more flexibility to make the right decision, rather than follow a policy of getting “x” number of bids.

John Addison, as president of OPTIMARK, has devoted the last 10 years to helping solution integrators, VARs, hardware, and software firms. Mr. Addison's workshops and speeches are popular in the Americas, Europe and Asia. Prior to consulting and workshops, Mr. Addison was an area channel manager for Sun Microsystems. In 3 years he led a sales team to 300% annual growth from $4 to $110 million. John Addison is the author of Revenue Rocket, which will be published by ProStar Publications in March. A free 14-page summary of the book is available at www.optimarkworks.com/books.

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Channel Media is licensed to publish the above article. The article is © John Addison. All or part of the content may be used by John Addison

Anywhere Computing Opens Endless Possibilities … Possibilities to Data Loss
By David Yao
Executive Vice President, NewTech Infosystems Inc., davidyao@ntius.com

The same open spirit that started the original Internet more than 10 years ago is rapidly building out the nation’s Wi-Fi network. User groups, companies, retailers (theaters, coffee shops, restaurants, malls) as well as governmental and educational agencies are adding nodes in stores, parks, public buildings.

The fact that the gratis sites are as open to you as to anyone else means it can be relatively easy for less than scrupulous individuals to “borrow” your passwords, credit card information and other vital data. For the majority of your work or activity, this is of little concern. When it is, tap into one of the subscription services that deliver some level of security (it is getting better). New virtual private network (VPN) software encrypts your communications, making it difficult to hack as it mixes with the other traffic on the Web.

The problem is that with higher-performance CPUs and larger storage capacities, laptop and notebook computers are rapidly becoming users' primary computer, rather than just their on-the-road supplement. This means users can have instant access to the most current information, regardless of their location – in the office, in the conference room, at home, in the airport, in their hotel room or in a client’s office.

The problem – and the operative words are, "current information."

Added Care, Protection
Users need to understand that these mobile systems aren’t invisible, nor are they invincible. While it is impossible, we would almost recommend that anyone who receives a portable computer also receives an orientation on how and why they need to protect the corporate data they will be carrying with them around the country and the globe. Any portable PC can be configured to require a password before the user can access any data on the system. This ensures at least some data protection.

While these steps do protect the systems from outside theft or attack, they do not protect the individual's and the organization's most valuable asset – the data. There's simply no substitute for an economical and reliable backup and disaster recovery solution that will protect the individual’s and organization’s most valuable asset and is easy to use!

Tailor Protection
Only full, incremental and differential backup scheduling can protect vital information from the top mobile PC disasters.

Top Mobile PC Disasters

New automated backup solutions such as NTI’s Backup NOW! are available that provide both drive image and file backup. With convenient features such as the ability to exclude and include files, users can bypass or select specific file types from multiple folders for backup.

The advanced solutions also incorporate the ability to produce a bootable disc for fast, reliable disaster recovery.

Since CD writers are generic to almost every notebook and laptop computer (internal or external), and the media is almost as economical as paper, CDs provide an excellent backup and recovery medium for mobile users.

For best protection, incremental or differential backups backup should be carried out on a daily basis and full backups should be made at least every other week.

Once you have made your latest CD full backup, put these discs in your suitcase when you travel (obviously, the backup in the bag with your portable PC is of little assistance if the bag is stolen). Data recovery specialists often recommend that you keep 2-3 sets of your backups with you. The newest in the suitcase with your clothes, the next older in another safe travel location and the oldest with your computer.

Rapid Mobile Growth
Wi-Fi usage is becoming increasingly popular (Gartner Group estimates that usage will grow to more than 1.9 million in 2003, up from 700,000 in 2002) as hot spots triple across the country. Today, there are about 3,300 nodes in the U.S. Individual and corporate users will find it even more attractive as next-generation 54G versions (54 Mbps, 5X faster than current Wi-Fi speeds) become more widely available and the set up for each new location becomes faster and easier.

As people increasingly extend their working environment to parks, coffee shops and airport lounges; IT management will have to focus more of their attention on helping people understand that they are carrying the company’s most valuable resource with them. Mobile users need provide the same level of protection to the notebook-stored data that they would give a company-private file folders they would lock in their desk drawer.

# # #

Sidebar

Areas of Concern
Contingency Planning Research points out the obvious:

• There has been a dramatic increase in the volume of data stored on PCs (even in the corporate office environment). Because of the extremely low cost, storage capacity has increased 80 percent over the past 12 months and will increase more than 50 percent in the coming 12 months.
• Corporate users have traditionally resisted hierarchical storage management (HSM), preferring to retain “their” data on their systems. Forty percent of corporate users resist or circumvent centralized storage.
• Less than 30 percent of all PC users backup their data
• The Internet has opened systems to the world, meaning that any and all data is available to others.
• Thirty-one percent of users are susceptible to virus attacks and 56 percent are vulnerable to exposing private data online.
• Even users that utilize virus protection software are only protected from existing viruses. There is no protection for new viruses which usually require 2-3 days for antivirus firms to research and block.

If you feel this is discouraging, consider the notebook or laptop computer user:

• Notebook and laptop computers are five times more likely to be stolen than desktop systems. The IRS lost or misplaced more than 2300 laptop computers over the last three years.
• Fifteen percent of all laptops are stolen every year.
• Because of heightened airport security, the number of laptop and notebook computers lost, misplaced, stolen or forgotten at airports has increased more than 80 percent in the past 12 months.
• Notebook hard drives are 10 times more likely to crash than desktop systems.
• Today, an organization’s most current customer data is in the field – not in the office – the cost of manual recovery is prohibitive.
  

A Method for Improving Website Performance
Steve Kangas, CTO, NetConversions

As more people make purchasing decisions online, it becomes increasingly important to get the best possible performance from your website. Your business goals can be diverse - increase sales, get more customer contacts, encourage visitors to return to the website, and so forth. So you try to optimize the website, but the results may not coincide with the effort that was put in.

It’s relatively easy to make changes to a website, but little has been written that tells you how to go about making these changes in a systematic and general way that can improve bottom-line results. I’m going to share with you a website optimization method – called “dissect and convert” – that we have used to guide improvements for our own clients.

The basic idea is to intelligently dissect the website into natural pieces, which allow you to see where changes are needed the most. Calculating success rates at each piece and making changes that increase the flow between the pieces can ultimately result in a greater flow toward success. Let me explain.
Set a clear objective

To begin, we need clearly defined goals. Your goal may be to “make the site better”, but it has to be expressed in more definite terms such as “get more visitors to buy” or “increase the number of views of a promotion”.

One way to make vague goals more definite is to use the concept of “conversion rate”. The conversion rate is the ratio of successes to potential successes. For example, if your goal were to increase the number of sales, then the relevant conversion rate would be the ratio of buyers to visitors (the number of visitors who buy something divided by the total number of visitors).

From objective to measurable success criterion
In order to be able to tell if you are reaching your goal, you need to find a way to measure how well you are succeeding. This means counting how often visitors do something. In our own practice we have the technology to count how often visitors generate a particular event – clicking on a link or hitting a button, for instance. Without our technology, the easiest thing to count is the number of visits to a particular page and this number is good enough for many purposes, so I’ll assume that this is the kind of metric you are using.

Next, you will need to translate your goal into a quantifiable number of visits to a “success page”. For example, if your website goal is to increase the number of buyers, then we would measure this by equating “successes” with the number of visitors who reach, say, an order confirmation page (this is the page at the end of a shopping cart process that says something like “Thank you, your order has been accepted” – the visitor can only reach this page by buying a product). We could calculate the conversion rate using this number. With this in mind, our method of website optimization leads us to meaningfully dissect the website into pieces as described below.

Start with success
Locate the “success page” – the web page that, if visited, constitutes success. We’re going to mentally label this page the “Level 0” page.

Work backward from success
Think of the success page as a “center” and move outward in concentric rings. That is, group together all the pages that contain a link to the success page and label these as “Level 1” pages. Then group together all the remaining pages that contain a link to the Level 1 pages and label these as “Level 2” pages. And so on. When you have finished labeling you will have divided all the pages into distinct groups, one for each level. (See Figure 1)

The resulting groups may or may not match other ways of mentally categorizing the pages, but the advantage of grouping pages this way is that there is a natural way to describe the conversion rate of the whole website in terms of the conversion rates between levels. For example, the conversion rate between Level 1 and Level 0 is the number of visitors that reach Level 0 divided by the number of visitors that reach Level 1. For the highest level, the conversion rate is the number of visitors who reach that level divided by the total number of visitors. Then the conversion rate for the whole website can be found by multiplying all the conversion rates between levels. (See Figure 2)

Since the conversion rate for the whole website is just the product of the conversion rates between levels, you can increase the conversion rate for the whole website by increasing any of the conversion rates between levels. By measuring the conversion rates between levels you can also see where the website may need to be changed the most; the level that leads to the lowest conversion rate is the one where optimization may create the greatest improvement.

Accentuate the positive, eliminate the negative
To increase the conversion rate between two levels, find the features that are used the most that lead to success and enhance them. Eliminate or improve the features that lead to failure. Here, “failure” means that the visitor did not progress to the next level.

The tactics for doing this vary from situation to situation, but here are a few broad suggestions. To accentuate success, make it easy to progress from level to the next. Some suggestions:

• Accentuate links that lead to the next level with style changes. That is, modify the placement of the link (by, say, putting it in the upper left) or the color (to increase visual contrast with the page) or the font size (make the link bigger).
• Use redundancy. Links that lead to the next level should appear in more than one place on the page to make it easier for the visitor to find them.
• Add shortcuts. Use drop-down menus or other means to allow the visitor to quickly get to a deeper level.

To eliminate failure, we generally want to reduce the number of paths the visitor takes that lead away from success. So links that lead from a level to the same level or to an outer level should be examined carefully. Some suggestions:

• Subtract unused features. A large number of links can overwhelm the visitor, making it difficult to see where to go next. You can make it easier for the visitor by removing links that are seldom used or provide little value to your business.
• Condense pages on the same level. If two pages on the same level both tend to be visited, consider joining the information from the two pages into one page. This reduces the mental workload associated with navigating from one page to another.
• Eliminate the need to refer back. If the visitor has entered data at one step, he shouldn’t have to back up to consult that data; the website should reprint the data as the visitor moves along. A good example where this sort of thing is done is Amazon.com’s “Page You Made” feature, which lists the particular products that you’ve chosen to view during your visit.

An Example
We worked for Kelley Blue Book (an automotive pricing resource). For them the success criterion was a click-through on a revenue partner link. (So the success page was actually on their partner’s website, but you could still measure this as a success page on your own website by sending visitors through a redirection page before they move on to the partner’s website. For us, we used our own technology to measure clicks on the links.) There were 8 steps to success and we found the lowest conversion rate between the level of the homepage and the next level. We recommended that they add a drop-down menu at the top of the homepage to allow shortcuts to the next level. This dramatically increased the conversion rate between these levels and improved the overall success rate of the website.

You can see the “before and after” versions of the homepage here:
Before: http://web.archive.org/web/20011205053221/http://www.kbb.com/index.html
After: http://web.archive.org/web/20020524090814/http://www.kbb.com/

Conclusion
Dissect and convert works! Look at your own website, dissect it into levels, and think about what you might do to improve the conversion rate between those levels. You should end up with a more successful and optimized website!

Steve Kangas, Ph.D.
Steve is the Chief Technology Officer at NetConversions, Inc., the leader in data-driven, website usability. With NetConversions True Usability™, clients use fact-based recommendations that improve user experiences and increases bottom-line results. Large Fortune 500 companies to small and medium-sized companies see the bottom-line results from NetConversions True Usability™, including a 214.2% increase in customer acquisitions, 62% increase in online advertising impressions, and a doubling of sales for an e-commerce retailer. Simply put by one client, "The study completed by NetConversions has been the single most powerful tool available to us to improve customer experience and increase bottom line results. The analysis and action steps are highly actionable and targeted." For more information, please visit http://www.netconversions.com. You can contact Steve at info@netconversions.com

FROM THE COMMUNITY Changing Channels: Your Vendor’s Life, how it works By Steve Cross

It’s important to think about the challenges faced by your partners in the channels. First, it makes you a more effective partner. Second, it allows you and your company to manage the relationships more effectively. The third benefit is a little nebulous, however, as more knowledge of the challenges faced by your channel partners makes you more empathic, and potentially more compassionate. That’s been a topic of mine for a while, as I am of the belief that we are all in this together.

Once a company decides to choose two-tier distribution to access potential or current resellers and VARs, a number of other decisions must be made. Everything the vendor does from this point on triggers other decisions on corporate infrastructure, receivables, channel relationships, internal politics, marketing budgets, sales compensation, etc. We’ll briefly review some of these.

Let’s start with some sales infrastructure issues and proceed to operations and finance. First, vendors decide how to manage their distributors. On the infrastructure level, the vendor can place account managers in charge of their respective distributors, or hire new people who already have a relationship with the proposed distributor. Other approaches are possible, but these are the most common. And these may entail hiring, staffing, support staffing, training, etc prior to calling on one distributor. The company must also decide some sales compensation issues in advance. Does it compensate out-of-territory sales reps for sales by the distributor into their geography? Does the company switch all compensation to “named accounts” models? These are fairly important and will determine the direction of the sales organization for a long time, possibly years.

When changes are introduced into sales structure, there are triggers that pull suddenly: conflicts with direct selling folks. It is a really good idea to have a plan for adjudication of disputes regarding customer ownership. A small item, but important downstream is for senior management to be clear on how leads are disbursed, so the direct side of the house doesn’t “cream” all the trade show and marketing leads. Protecting against turf wars is best accomplished in advance.

Operations may have some problems. The shipping department now may start working with pallets instead of single boxes. Possibly they used to send two or three items at a time, and now need to send box quantities only. Sales and operations must discuss this advance.

Adding a tier has a huge impact on aging of receivables. Lots of distributors have special payment terms with their resellers, and that affects net payments to vendors. Sales must negotiate in advance with the CFO or the finance department on the payment schedules with the Distributors. They must gather support from the internal pricing committee, and from accounting/finance. Much of good channel management is simply educating internal partners about the channel in advance. Channels will operate more smoothly if internal support is established.

Some vendors walk into a contract negotiation with a potential distribution partner without knowing how their CFO feels about opening orders, volume commitments, volume incentive rebates, and the like. That’s one reason that deals blow up after the sales people leave the distributor’s office. In fact, you better chat about revenue recognition and its impact post-Enron, no matter what side of the house you’re on. A channel partner must be aware of revenue recognition issues prior to cutting a deal. An old friend of mine had to pay a fine to the SEC over this stuff. If you are dealing with a public company, you must be very clear on how they treat orders, payments, stock rotations, and especially returns. The best vendors will circulate copies of proposed contracts in advance to legal, accounting, finance, and executive management. It just makes things so much easier downstream. If you’re on the channel partner side, ask if the vendor has buy-in on these issues. If they don’t, you’re just going through an exercise.

The vendor also has to think about reseller/channel marketing. Are they slicing budget dollars away from other items, or creating a new line item called Channel Marketing? Better ask. It’s really tough when the vendor has to go to the well every single time you need/want to run a campaign. Look out a couple quarters at least. You should have a good idea about when during the year promotional programs will be taking place. For example, if you plan some promotional activities prior to trade shows, plan way in advance. You already have trade shows on your annual schedule. This is easy. That way you have the budget issues behind you long before the event happens.

Folks, all this stuff is going to come up. By understanding the environment of your channel partners, you head off a lot of potential problems. Plan for it in advance, or it becomes a terrible problem. Good planning, open communication, and enrolling the whole company in a two-tier program is the way good vendors make it work.

Steve Cross is Director of Channel Sales for iVAST, Inc., the world leader in end-to-end MPEG4 solutions. scross@ivast.com 702-492-7472

FROM THE COMMUNITY

Influence in a World of Limited Budgets
By Stephen England

Every day a new name appears on the influencer landscape – driven by downsizing by the big analyst firms and the ease of becoming a “publisher” on the Internet.

But, it is still very possible to build a cost effective Analyst Relations (AR) program by careful up-front targeting of the right analysts. Particularly if done at the “initiative” level – to mirror the sales force organization and prioritization.

So – how does that help you face up to a world of limited resources? And how does it relate to the lower than ever headcount and expenditure budgets you are almost certainly dealing with?

Here are the five rules of survival for AR programs:

1. Check your ratios

If your average deal size is over $50K, you should be spending more money on AR than PR. More money in terms of

a) headcount internally (even if the total headcount for AR and PR is one – allocation of time is important)
b) outsourced consultancy (including your PR firm)
c) tours and events (press vs. analysts)

The exact ratio (AR $’s:PR $’s) should increase as the average deal size for your products increases. If the deals are over $1MM the ratio should be about 10:1.

Be mindful of “inbound” or research AR needs but don’t let them drive the program. If you build the right influencer program you will almost always get access to all the research you can ever need!

2. Dissect your organization

Think of your organization in terms of discernible business units – even if they don’t formally exist. Only by thinking in terms of your sales organization as units of ground forces and the AR program as close air support for those forces can you hope to identify the real “initiatives” that will drive your AR plan – whatever size it is.

Key things to look for are vertical market sales forces and geographical units – Europe/EMEA and Asia Pacific, for example.

3. Rank your opportunities

If you’re faced with the usual budget crunch, do the hard prioritizations first. Working with your management team, decide which business units, markets and geographies can afford (time and money) a substantive AR program. Allocate your time and budget accordingly.

4. Target the influencers

Now you can start the real process of identifying which individual influencers are part of your prospects buying process and ranking them in terms of their relevance to your products and markets, their exposure in your target market and – above all else – the power of their influence.

Doing this at the detailed level and then rolling up the results gives you not just a clear measure of where you spend your money and time, but also an excellent picture of exactly what you need - as you negotiate your analyst contract.

This as also a good time to renegotiate the term of your contracts – there are many advantages to having all your analyst contracts synchronized – with each other and with your financial year.

5. Assign responsibility

No strategic, proactive AR program is going to work unless it has clear ownership. Each initiative needs a clear owner of the program and a clearly defined set of “interactors” who can then be trained to produce tight, meaningful presentations and deliver in good two-way interactions with the analysts and other influencers.

Whether your AR “team” is 45 people or 45% of a person the process and routine are the same – only the “scale” varies.

There are only a few simple steps to getting out of “reactive” mode and building a proactive program – which incidentally will cost little extra in terms of time or money. But it will deliver a lot more measurable results to your sales organization.

Stephen England is a partner at The Knowledge Capital Group (KCG) and can be reached at england@knowledegcap.com. KCG is the leading Analyst Relations Strategy consultancy with extensive domain expertise in Telecommunications, Enterprise Software, Hardware and Networking. KCG helps technology vendors leverage the industry analyst's influence with end user customers and prospects to increase sales. KCG helps technology buyers maximize the value of their investment in analyst research.

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