News M&A Activity Brings Heat to Channel Vendors. Channel Life By ChannelMedia Editor Keith Newman kanewman@sbcglobal.net

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To some, consolidation is taken to mean maturation in the high-tech industry. To me, it means lower margins, lower prices, layoffs and fewer vendors. Fact is that of late, we’ve seen anything but maturation from the executives mixed up in the big M&A Season that is in full swing right now. Especially in the $5 billion takeover of PeopleSoft by Oracle or the buyout of J.D. Edwards by Peoplesoft for $1.75 billion. But as most of you know, the offer of to buy Peoplesoft has been rife with controversy. Oracle tries to break up the party and take Peoplesoft for an all cash offer but instead is told by his former protégé, Craig Conway, the CEO of Peoplesoft, that it will never happen and then turns around and sues Oracle. Larry of course is just trying to stir up trouble, raise the price of the deal and maybe get something thrown his way if he backs off of the deal. So, I wonder, does this sound like maturation?

How about Legato and EMC? That seems like a good fit on the technology side but culture, geography and channel strategies might not be in similar alignment. What are your thoughts about Palm and Handspring merger? Good Deal, right? The Handspring team goes over to run the wireless side of Palm’s business, the OS group is spun off and the “organizer” group remains Palm. To the pacifists of the tech world, this is a great fit but to those that believe both companies need a heckuva lot more help to compete with the likes of Microsoft, Nokia and AT&T, this was Much Ado about Nothing. Because I have friends at both companies (and they are pretty sharp executives too) I will continue to hope that the combination will work. But how many of these deals “shake out” is anyone’s guess. Cisco’s acquisition of NetGear – hey, we covered this last year but just a reminder of the networking space in SMB is HOT, HOT, HOT!!! So, how’s it going? Someone tell me?

And now, this just in….Spam is good? Well, Microsoft has announced its intention to acquire GeCad Software, a Romanian antivirus technology developer, in order to improve the security in its Windows platform. The deal, the financial terms of which were not disclosed, would add a team of antivirus experts to Microsoft's stable of developers and give the company the ability to offer antivirus systems across all its products, a representative said. Security experts from the 100-employee company will also work to make the Windows operating system work better with products from third-party antivirus vendors, Microsoft said. The move is likely to change the competitive landscape for antivirus vendors such as Network Associates and Symantec. Microsoft said that, although it was planning to acquireGeCad’s IP, it would not continue developing the company's products. Also, Intel sold ICP Vortex, a subsidiary that specializes in cards for controlling hard drives, to Adaptec recently as the chip giant continues to focus its energies on its core products. ICP's products are used inside servers to manage multiple hard drives and enable high-speed input-output connections. Adaptec is one of the larger companies in this market. Finally, Yahoo swooping up Overture to compete aggressively with Google might end up more significant than all of them.

But as of now, are these the sounds of an industry maturing or trying to figure it out or another reason to expect lower prices, margins and marketing dollars? We want your opinion. Similarly, what deal would you like to see done? Drop me a note? Would love to hear your thoughts? Email me at kanewman@sbcglobal.net.

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News System Builder Summit and VARVision Fall 2003: Focused Solutions for Channel Challenges By Eric Lesonsky Event Director, System Builder Summit and VARVision Fall 2003 September 21-24, 2003 Renaissance Hollywood Hotel Hollywood, California

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There is certainly no shortage of challenges for Resellers and Vendors in today’s IT channel. Technology spending remains flat, margins remain squeezed, and consolidation continues to alter the channel landscape. So how do you find and capitalize on channel opportunities that will give your company an edge? Where do you invest your time and marketing dollars?

According to Michael Haines, a Principal Analyst at Gartner, “In order for IT Vendors and Resellers to optimize their market opportunities, they must initiate focused channel programs and partner-to-partner collaboration.”

That’s why focused channel events are more critical than ever before. Just as today’s technologies must demonstrate a higher value proposition and deliver more measurable benefits to the business organization, so too must today’s technology events. Investing precious marketing dollars in horizontal, broad-based events is becoming harder and harder to justify. Both Vendors and Resellers need to deliver real ROI, real measurability, and a proven and cost-effective way to help build new partnerships that will lead to new revenue streams.

No channel events are more successful at focusing on and delivering measurable business results than System Builder Summit and VARVision Fall 2003 – taking place September 21-24 in Hollywood.

Focused Audience

The right focus starts with the right audience. The System Builder Summit and VARVision audience is by invitation only. This ensures that decision makers have significant buying power and sell into a cross-section of the most dynamic vertical markets. Furthermore, we make sure that Vendors know as much as possible about pre-registered attendees – company names, titles, purchase influence, level of buying power, markets served, and other key characteristics. This will help them plan on how to maximize their time, and schedule meetings with the Resellers they most want to see.

Focused Format

Vendors praise the Boardroom meetings for their extraordinary strategic value in putting them across from Resellers truly aligned with their channel strategies. System Builders and VARs also praise the focused Boardrooms and the uniquely productive One-on-Ones, both pre-scheduled and those arranged on-site. These focused meetings are complemented by World Premieres where Vendors broadcast a major product or program initiative to a large group of Resellers, and dynamic networking events that add a special dimension to the relationship-building.

No other industry event put such a premium on focused buyer-seller interaction. We believe it’s the most intelligent and successful matchmaking you’ll find at any IT forum, anywhere.

Focused Market Opportunities

Gartner analysts refer to them as “vertical market sweet spots.” You should think of them as windows of opportunity. Establishing or expanding market share in key vertical sectors is one of the primary ways for Vendors and Resellers to build business in a challenging environment. System Builder Summit and VARVision deliver an audience that sells across key vertical IT markets -- healthcare, government, education, consumer, wholesale, manufacturing and SMB. The message is simple: go where the growth is.

Another focus area is found in the Industry Insight sessions. We not only deliver top Gartner analysts covering the IT channel – we also give Vendors the opportunity to meet one-on-one with these analysts to discuss both market trends and their own specific objectives.

See You in Hollywood

This September in Hollywood, we’re ready to meet the market challenges of Vendors and Resellers with a focused channel program that puts a premium on ROI and results. We look forward to your participation.

If you’re interested in being part of System Builder Summit and VARVision Fall 2003, September 21-24 at the Renaissance Hollywood Hotel in Hollywood, California, please contact:

Mary Fogarty
603-471-4227
mary.fogarty@gartner.com

Michael McGoldrick
603-471-4225
michael.mcgoldrick@gartner.com

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NEWS

What’s Needed at AMD
By ChannelMedia Staff

A key factor in Advanced Micro Devices ability to gain support for its upcoming desktop version of its 64-bit chip technology could be IBM's acceptance of the technology for its servers. Emerging semiconductor technology has had a hard time in the past few years in gaining a foothold in the market, as the struggles of Transmeta's Crusoe processors has clearly demonstrated. Transmeta gained a number of major vendors for support initially, but they failed to move the technology into the US market and the two mainstream US manufacturers that had initially supported the technology, IBM and Compaq, backed out without ever releasing a product here.

AMD has also suffered a similar fate in the past, taking years to break into the top tier manufacturers with its chips, even though they were priced considerably lower than similar products from rival Intel. It still has yet to make any serious inroads in the lucrative business PC marketplace. To avoid that fate for its next generation products AMD has been striving to get mainstream adoption of the technology, and seems to have it in the form of Big Blue. IBM said that it plans to use the 64-bit Opteron processor in rack-mounted servers that it plans to release in the Fall. While there seems to be still some uncertainty about the release, it looks like the company may have scored a coup here because IBM also is selling its own Power4 architecture in the server market as well as Intel's Itanium. To support three different architectures shows that the company believes that all will have viable revenue streams to justify selling them. In addition, Sun Microsystems has been dropping very broad hints that it is prepared to abandon the entry-level server market to the Intel architecture but that the company would select AMD's technology to offer under the Sun logo. If businesses start to use the technology in their backrooms to run their operations on, why would they have concerns of using computers based on the same technology for the front end?

At least that has to be what AMD is planning on. So this leads up to the expected September 2003 release of both a desktop and notebook version of the chip, called the Athlon64 for desktops and the Athlon64 for notebooks. The difference between these and Intel's Pentium processors is their ability to run 64-bit and 32-bit applications. The Pentium can only run 32-bit applications. 64-bit applications can take advantage of larger amounts of memory, making them much better for use in large database applications as well as for manipulating large digital files. Hewlett-Packard has already said that it plans to support the Athlon64 line up in the Fall, but it is still unclear weather the system will be for business or consumer markets. The rapid acceptance of these technologies is very important to AMD, which continues to bleed red ink. The company has said that it expects to lose money again in the second quarter and analysts expect that AMD will have to go back to the financial community for an infusion of cash. The Athlon64 technology is almost two years late in getting to market, a failure attributed to design and manufacturing issues at AMD's facilities. It is hoping that its recent manufacturing relationship with IBM will help make those issues a problem of the past as IBM is one of the top two or three companies in terms of semiconductor manufacturing process. The speed and power of the chips is expected to be less than was originally touted by AMD two years ago. With the new nomenclature and designs that AMD uses it is hard to make direct comparisons to rival Intel parts but the chip is expected to operate at 1.8GHz, with the possibility of a 2GHz part also being available. The fastest chip in the Intel arsenal is a 3.2GHz Pentium 4 microprocessor, which could be the last in the Pentium 4 family as it prepares to move to a new, faster microarchitecture code-named Prescott. The first Prescott chip should be available sometime in the later half of 2003, roughly when the Athlon64 lineup appears.The rapid acceptance of these technologies is very important to AMD, which continues to bleed red ink. The company has said that it expects to lose money again in the second quarter and analysts expect that AMD will have to go back to the finacial community for an infusion of cash.

ACP - There's $$$ For You in Refurbished Products
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NEWS

Channel Digest
By ChannelMedia Staff

Sun Microsystems partnered with Red-Hat, resulting in Sun servers offering Red-Hat’s Linux and Sun’s Solarix operating systems on its servers. The collaboration is intended to provide businesses low-cost computing solutions including inexpensive servers and software, and assist organizations to streamline their computing infrastructure.

Acer recently announced a new channel program and partnerships with many industry leaders, including Advantec, D&H Distributing, Seneca Data, SYNNEX Information Technologies, Inc. and Tech Data. The new program helps indirect channel partners gain competitive business advantages and provides qualified resellers an important opportunity to create additional revenue streams and build long-term relationships within the end-user community. The Acer Authorized Reseller Program will offer programs, promotions, sales and marketing tools, training and support to profitably promote TravelMate® notebook and Tablet PCs, Veriton® and AcerPower™ desktops, Altos® servers, Acer monitors and optical drives. Now that the Acer Authorized Reseller Program is completely operational, we will continue to work closely with our channel partners to meet the demands of their customers, whether they are a small or medium-sized business, or enterprise environment," said Mark Hill, vice president U.S. Channel Sales at Acer America. "We will continue to drive success to our channel partners across all markets, including identified vertical markets, by delivering our award-winning family of PC solutions to customers around the country." Customers were equally enthusiastic about the changes. “Acer solutions have been garnering a large amount of industry-wide press recently and D&H is very pleased to promote and support the Acer Authorized Reseller Program,” said Dan Schwab, vice president of Marketing at D&H Distributing. “This program provides us with a greater incentive to partner with Acer to provide proven solutions that help meet customers’ needs in strategic markets. This is a tremendous opportunity for D&H and our reseller partners, as well as Acer America.”

IBM launched a portfolio of products and services designed and priced specifically for the small-and-medium-business (SMB) customer, particularly companies between 100 and 1,000 employees.The portfolio consists of new hardware, software, services, solutions and financing, delivered under the name "Express." The offerings within the portfolio were developed with input from IBM customers and Business Partners, and met requirements of ease of use, simple installation, and overall ease of ownership. The new Express portfolio enables IBM's network of 90,000 Business Partners to deliver complete solutions to SMBs and receive lead pass fees or other compensation. The new portfolio offerings consist of WebSphere Commerce Express for SMBs to create and manage e-commerce sites, WebSphere MQ - Express an application that enables business to share data across their IT infrastructure, IBM eServer Integrated Platform Express for Employee Workplace, Financing for IBM Express Solutions, IBM Personal Computing Division - Express Program that offers PC solutions for SMBs, and IBM Global Services - Express Solutions for Medium Business. To support the launch of the initiative, IBM announced an advertising campaign focused on industry trade journals. The SMB sector has become IBM's second-largest revenue source, following behind the customer sector. In the most recent quarter, the SMB sector represented 22 percent of total revenues, or $4.3 billion, an increase of 13 percent from the prior year.

Digi-Data announced the immediate availability of its new STORM(TM) Fibre Channel RAID storage systems. STORM delivers significant advancements in performance, scalability, availability, and manageability - offering medium and large enterprises greater flexibility and control over their storage with significantly lower total cost of ownership. STORM systems feature a modular design that improves scalability across every dimension, while nearly eliminating the traditional costs and complexity of deploying and managing enterprise RAID storage in SAN, NAS and DAS environments. According to Bill Tomeo, Digi-Data CEO, "Although there are a number of RAID storage systems on the market, few possess the versatility that resellers really need to compete in more situations and keep pace with changing customer needs for performance, reliability, and scalability. Perhaps more importantly, with our open systems architecture and embedded RAID manager, STORM is incredibly easy to deploy and manage."

One of the most compelling aspects of the STORM system is its configuration flexibility. Using an advanced modular design, STORM can be configured to optimize a wide variety of applications and environments. Dan Goodwin, director of systems architecture for Intelligent Solutions comments, "Because of its modular architecture, the greatest advantage STORM has over any other storage system is the ability to scale from cost-effective storage up to highly available storage within the same platform."

Whether direct attached to application servers or network attached to NAS servers or SAN switches, STORM offers more connectivity options to solveimportant technical and business issues such as eliminating host or disk bottlenecks, consolidating storage across heterogeneous servers, and improvingdata availability for critical applications. Martin Calderwood, executivevice president of Caen Engineering, Inc., adds, "STORM not only boasts the fastest Fibre to Fibre RAID architecture, it is also the only one that has a full eight channels and an embedded RAID manager. This provides greater control and flexibility over the lifetime use of the system. It is a better investment for us and our customers."

Icode recently announced the certification of its first 142 independent ERP representatives. The company launched its Icode Certified ERP Representative, or “ICER” distribution model on April 29, 2003 to help more small businesses benefit from its “mini-ERP” software through distribution and implementation services at a local level. Within two months of the program’s launch, ICERs have already made revenue contributions to Icode by selling Icode’s award-winning Everest® “mini-ERP” small business management software. Icode’s first graduating class participated in rigorous training on Icode’s product, market, competition, differentiation, and target customer profile, through Icode’s training facility for employees, partners and ICERs called “Icode University.” The typical ICER brings 27 years of professional experience including over 8 years in sales. Over half of Icode’s ICERs carry an MBA, master’s degree, CPA or networking certification, and nearly three quarters have first-hand experience with accounting software packages such as Intuit’s QuickBooks, Microsoft’s Great Plains and Solomon products, Best Software’s Peachtree and MAS Suite products, and Computer Associates’ Accpac product. “The quality, enthusiasm, and effectiveness of our first graduating class of ICERs has far exceeded our expectations,” said Nicolas Orolin, vice president of business development at Icode. “Having 142 knowledgeable and experienced ICERs helping small businesses understand the value and benefit of Icode’s award-winning “mini-ERP” software in a face-to-face environment is a major win for Icode, for ICERs, and for small business owners alike.” Icode’s next certification session starts in July, and Icode has begun qualifying additional candidates among its pool of over 3,500 applications received this quarter.

As a Business Partner, you are faced with the challenges of leading your company each day. Critical decisions such as hiring employees, marketing initiatives, compensation, and financial management are key to your success. Most importantly, you need to anticipate radical change in the IT industry.

Who can you turn to for support on making critical decisions? Where is your business heading & how will you get there?

One of the most powerful ways to find answers is through peer-to-peer collaboration. Our peer leadership program allows you to tap "Other Peoples Experiences" (OPE). Through OPE, you can avoid costly mistakes that can seriously impact your business. For the past 4 years, Let’s Talk Business has partnered with companies such as IBM, Avaya, Mitel and most recently Gartner’s VisionEvents, to create intimate environments where non-competing business partners meet to:

• Build trusting relationships with industry peers
• Feel less isolated in your role as leader
• Take your business to the “next level”
• Tackle obstacles such as managing growth, staying focused and goal setting
• Gain confidence through peer experience
• Encourage personal accountability
• Develop an informal advisory board
• Achieve work/life balance and,
• Feel energized and excited to return to your business to implement what you’ve learned

“We have probably all heard the statement; ‘It gets lonely at the top.’ Well it does! Let’s Talk Business affords me the opportunity to join with peers from various parts of the country to express issues dealing from business to family. In addition, I found that the bond that is created with the members of my group runs very deep.” Carl Tonjes - Compro

About the Program

Each group of 10-12 non-competitive Business Partners that will meet twice a year, prior to the System Builders Summit & VAR Vision event, for a day and a half session (beginning Saturday at 1:00 pm and ending by 3:00 pm on Sunday). During these sessions, you will set long term goals, short term goals, and participate in a variety of open discussions which will help you to resolve your current challenges and fulfill your long term objectives. Experienced facilitators from Let’s Talk Business moderate these peer-to-peer sessions to maximize your time and provide you with ideas to immediately apply in your business. Group sharing and learning continues between each session through monthly teleconferences, and quarterly educational teleclasses.

If you are ready to join a carefully assembled peer program that can make a real world difference in your business, please contact Michael Ringel at 212 742-1553 x208, or via email at Miker@LTBN.com. All of us at Gartner and Let’s Talk Business look forward to helping you grow your business!

Research Sponsored by:

A recent survey of 40 IT services companies reveals the methods and models used and the results realized from these initiatives.

Market Overview

Gartner Dataquest has observed an increase in activity over the past several years of IT services providers selling their service offerings to, through and with other IT services providers. Several catalysts exist for the increased sales activity among companies that are natural competitors. The first catalyst is the changing dynamics of customer demand. The pressure on companies to improve performance in the current business environment is enormous. This pressure results in customer requirements that are much more complex and urgent than a few years ago. In response, these customers are seeking IT solutions to address critical, complex requirements that will help them gain competitive position and realize operational improvements. In this environment, businesses have less available time and resources and therefore are less inclined to deal with a large number of IT services providers on a regular basis. This drives IT services companies to work together to deliver the required customer solution.

The second catalyst is that IT services providers are seeking methods to increase penetration into new markets, particularly the small and midsize business (SMB) market. These providers realize that a direct sales strategy that targets unfamiliar or diverse new markets can be ineffective. Therefore, they are looking to leverage other IT services companies that already have a presence in selected target markets for this growth.
The third catalyst is that many buyers suspect that IT solution providers cannot provide the entire solution with their offerings alone and must combine offering with other service providers to deliver comprehensive solutions. Fourth, as buyers focus higher up the value chain for IT services solutions, business processes and applications, IT services companies that do not play in the upper level of the value chain must partner with those that do play in that level to reach this segment of the market. The final reason is all about economics. During this period of extended economic stagnation, IT services providers want to expand their sales reach to identify all of the potential addressable market opportunities.

Gartner Dataquest recently conducted research via a comprehensive survey of sales and marketing executives through a representative sampling of 40 leading IT services companies. The intention of the survey was to determine the industry status of strategies and initiatives related to the selling of IT services offerings via (to, through and with) other IT services providers, and to assess plans in the industry in the near future. This set of participating companies represented all sizes and included many different types of services companies that take very different approaches to go-to-market strategies and to leveraging other IT services companies as a part of those strategies. These different types of companies are grouped under the following three categories:

• Manufacturers of IT products or developers of IT software that have a substantial services business (hereafter referred to as original equipment manufacturers, OEMs)
• Companies that focus exclusively on IT services, not on selling IT products (hereafter referred to as pure plays)
• Companies that combine products and services into solutions that are subsequently sold to customers, including value-added resellers (VARs) and solution providers

Because the survey responses provided a representative sampling by both size and type of company, this document presents findings and analysis for the aggregate data, as well as by size and type of company.
In addition, research was conducted on this topic in 2001 that enables valuable comparisons with this year's findings. This year's research also began to look at the topic of selling "for" other IT services providers.

Summary of Findings

Key findings from the survey are as follows:

• Eighty percent of the participating companies are selling their services offerings either to, through or with other IT services companies. By far, the primary reason cited for these efforts is to increase revenue.
• Channel-focused sell-through activity has increased over the past year, while sell-to and sell-with activity has decreased slightly. Both sell-to and sell-through activity are expected to increase during the next year, while sell-with activity will maintain its current level.
• Other IT services providers are expected to be a significant and important buying center for IT services but are not likely to become the predominant one in the near future. Nearly 26 percent of IT services are expected to be sold via other IT services providers this year, increasing to 29 percent next year. Gartner Dataquest predicts that this buying segment will account for 40 percent of IT services sales by 2006.
• Operational and support services offerings continue to be the most frequently sold via other service providers, but professional services offerings have gained in focus and frequency since the 2001 survey.
• The buyers within other IT services companies tend to be business unit managers and practice managers, not CIOs and other managers in the IT department.
• Dedicated sales and marketing resources and marketing budgets continue to lag the percentage of services revenue generated via other IT services providers.
• IT services providers are starting to realize improved cost efficiencies with their efforts to sell their services via other service companies.
• Only slightly more than half of the participating companies are conducting comarketing efforts. With those that are, the comarketing programs that are proving to be most effective are traditional programs such as co-operative selling, events and success stories. Technology-based comarketing programs, such as webcasts and e-marketing, have delivered unsatisfactory results.
• Slightly less than half of the participating companies are selling IT services for other IT services companies, and of those that are, only a small percentage of their services revenue is generated from these efforts.

Recommendations

Gartner Dataquest makes the following recommendations:

• IT services companies should continue sell-through efforts and consider increases to sell-to and sell-with efforts to take advantage of the expected rebound in the demand for IT services.
• IT services companies should structure services offerings and unique value propositions to take maximum advantage of the growing buyer segment of other IT services companies.
• OEMs sell 60 percent to 90 percent of their products through channels, but only 39 percent of their services are sold through other IT services companies (many of which also sell their products). Thus, OEMs should take a hard look at programs that can improve services attach rates to product sales made through channel partners as a means of growing services revenue and extending market reach.
• IT services companies that sell professional services offerings should evaluate their offerings to determine if any can be packaged or positioned for easier and broader sale via other IT services companies.
• IT services companies must develop clear value propositions for their offerings that will resonate with the business unit executives and practice managers who tend to be the predominant buyers within other IT services providers.
• IT services providers must allocate sales and marketing resources for these initiatives and allocate adequate marketing budgets to ensure that the strategy and objectives can be achieved.
• Technology-based comarketing programs should be used for lead generation efforts and in support of traditional comarketing elements.
  

RESEARCH

Channel Media Q&A With PC Treasures CEO Brian Austin

Q: PC Treasures has an interesting business model. How would you describe it?
A: We license software from leading software publishers at very aggressive price points and share these significant cost economies with our system builder customers in the form of truly amazing software bundle values.

Q: Do you target resellers and white box builders? What is the value you bring to each of them?
A: Our primary market focus is the smaller white box system builder and reseller. We provide these customers low-cost application software bundle alternatives vs. Microsoft offerings. System builders can dramatically profit-enhance a PC sale by bundling our PCWorks Suite Plus Edition, for instance, instead of the Microsoft Works Suite, and still provide their customers with an outstanding software bundle. They can also profit-enhance the PC transaction by up-selling our gaming and educational bundles. Savvy system builders are making an extra $20.00 - $50.00 profit on every PC sale up-selling PC Treasures bundles.

Q: And what is on tap for the back half of this year and early next year?
A: With regard to the system builder market, we plan to continue to broaden and improve our product offerings. We are still at the tip of the iceberg with regard to the available market and we will continue to aggressively market our company and products to the system builder community.

FROM THE COMMUNITY Changing Channels Picking a Partner By Steve Cross

If you’re on the VAR-Reseller-System Builder side of the table, you see vendor sales folks all the time. They all have a good pitch, or at least they should if they’re professionals. And all the products work. Or at least the sales folks say they do. But heck, how do they know. I’m one of those folks and I’ve sold over a Billion dollars worth stuff in the last 20 years in this industry, and I still can’t work most of it.

Anyway, the pitches are all good. They are practiced and all make sense. The materials they show you are all polished and look impressive. But here’s my point. How do you pick a vendor? Maybe you rely on previous relationships, or company reputation, or reseller kit, or even reseller programs and support. Nowadays, with too many software vendors whose Venture Capital firms haven’t pulled their life support plugs (yet), and the hardware consolidation taking place at every level, I think a realist has to add some more considerations to the list: positioning, PR plan, and go-to-market strategy.

Is their positioning clear? Do they understand who their customer is, who their competitors are, how they are perceived in the mind of the customer (where the only real battlefield is, by the way). If they don’t, just send this vendor back to the drawing board. It’s too tough to play “ready, fire, aim.” You’ll have more success if you pick partners that have focus, and a plan to deliver that focus to the market.

If the proposed vendor doesn’t have a clear go-to-market plan that makes sense to you, go running the other way. In this economic climate, they better know where they’re going, who the customer is, how they’re going to communicate with that customer, and how much they’re going to spend doing so, or you get to do those jobs on their behalf! And you know that isn’t at all what you want to do. Heck, I’m not sure you can do those jobs successfully at all, if the vendor is unprepared to do it properly.

And if they can’t (or don’t know how) to get their message across to the public and the IT buyer though editorial coverage, just how are they going to communicate with the broader market and the professionals we all serve? I suggest quizzing them on their PR plan. Does the vendor operate an in-house PR effort? Are the people involved PR professionals, or is the company trying to do PR on the cheap with rookies? Watch out on this one. It could bite them (and you) on the butt!

Ask who their PR firm is, and are they on retainer or project? Why’s this important? Well, if the PR firm is project based, there is much less continuity for the long-lead press (magazines etc that publish farther in advance), and less preparation for events and trade shows that generate so much of the industry awareness in our business. This is stuff you should know to make an informed decision about picking a vendor partner.

It’s critical these days to make sure you have the right partners. When you do, this business is so much more successful, profitable, and enjoyable.

Contact Steve Cross at steve@crosschannel.com, 702-492-7472.

Editor's Note: Steve is a top channel consultant who offers services from one-day brainstorming sessions, to complete strategic plans, and implementation. He has helped numerous companies to increase revenue and enhance their channel success.

They say that these are challenging times, but I would say that this is the best time for good business owners and entrepreneurs to shine. Running and growing a company in any economy is challenging. You grow too quickly and you run the risk of running out of cash. You grow too slowly and you run the risk of loosing your top talent because they want to see growth and opportunity. You add on the fact that the economy is challenged, at best, and you have the recipe for entrepreneurial terror.

Certainly in the IT industry over the past 10 years growing a small reseller business had been fun. There was more work than you can reasonably handle, and clients were spending money on ideas, rather than solving problems, and you were there to help spend their budget. In the past 12-18 months all of that spending has stopped. What is happening is that businesses are looking at technology and purchasing only what they need, not what they want. The technology that is in place is “good enough” to get the job done, so why replace it?

So, what’s the problem?

To me there is no problem, just an opportunity for the industry to shake out those companies that never should have been in business in the first place. Sure, some very good companies will be lost in the transition, but when the story is told in the end the industry will be better off. There will be more talent available for companies that are well run and profit driven. Companies that know how to sell and service their customers will thrive and those that don’t will be lost in the dust.

As an entrepreneur, I work with other business owners every day. I have spent the past nine years working with business owners in every walk of life, from moving companies and marketing communications companies, to manufacturers and technology companies. And, I have to say that the technology companies, on a whole, are some of the most poorly run companies out there. The market has been begging for solutions to their technology problems for more than a decade, and most companies don’t have a clue how to implement a solution, so there is the opportunity for the Solution Providers.

But, being a technologist, it is clear to me that many of the small solution providers are just learning on the job. They are not really experts at solving these major challenges, just a bit smarter than the customer. In addition, many of these solution providers have very little internal structure or process in running their businesses. They started with an owner who could either sell something technical, fix something technical, or understood the demand in the market and tried to fill it.

What does that leave us with? A lot of companies trying to figure out how to survive in tough times.

In this economy there are many companies doing very well. I know many of them personally, and what they are doing is running effective businesses. They have excellent sales teams, they are effectively forecasting their business so they are staffed appropriately. They have customer service departments that work effectively with their clients and they solve problems. They also know how to sell solutions to customers that know that they have a problem, but not sure how to solve them on their own. They also understand the financial side of the business. Finally, they have either partnered with individuals that have the skill sets that they lack or have hired people smarter than themselves.

To me, these are all examples of healthy companies in any industry. It just so happens that the IT industry has allowed poorly run companies to flourish in a boom economy, and now the end has come for those companies.

This column is designed to make you think more effectively as a business owner. Over the coming months we will address specific issues within your business and give you ideas on how to improve them. In addition, we will take your questions and provide honest and solid feedback on how to solve your current challenges as a business owner.

There is so much talk about all the challenges in the marketplace. Take this time to reshape your company into a healthy and solid business. In any economy, good businesses learn how to survive, and when times get tough, those companies that are not built effectively will not be around for long.

So, build a great company and have a ball!

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