ChannelMedia Retail Edition Your source for channel news and research
FEBRUARY 2004   
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Sales Opportunities Abound
By Keith Newman

Q&A with Macromedia’s Michael K. Menegay, Senior VP of Worldwide Channels

Forecast 2004
By Jill Kerr

Trend: Survey of Microsoft Partners See Growth Ahead

Q&A with FSLogic’s President Jared Blaser

Gartner Research: The Lure of Selling IT Services Via Other IT Solution Providers By Michael Haines, Principal Analyst, IT Services Business Strategies Group

Research/ARS: There’s Big Potential in Bigger By Matt Sargent, Director of Research, PC Group

NPD – Hot Seller List

Channel Digest By ChannelMedia Staff

Steve Cross: What's Important These Days
 
 

NEWS

Okay, some thrived while others survived in 2003. But what will happen in 2004? It's all About Attitude!
By Keith Newman, Editor, ChannelMedia

Please find me some new customers, I'm sick of the one's I got. They're all dogs. And they all have fleas! Now if this is the usual catharsis you hear a salesperson utter once in a blue moon then fine, let it pass. However, if you hear this as a semi-consistent rant from yourself, your sales staff or a single sales professional, there are issues. Solving this sales quagmire can start with a predictable and repeatable process. I would venture a guess that the current process is the ever popular "spray and pray" method of qualifying leads. It's okay to admit it, we all fall into this bucket now and then. To upgrade your sales pipeline it would be a good idea to define your lead generation and qualification process? Here are a few questions that we know intuitively but always bears review, and what better time than the New Year:

  • Who are our best customers?
  • Who do we want to sell to?
  • Are we reaching them correctly?
  • Is our message clear?
  • Does it have impact?
If you said "Yes" to the above Big Five questions you are either the #1 selling machine in the your marketplace or you are delusional and in need of counseling. Maybe it's a bit of both, in which case, I would suggest you review the aforementioned questions again. Let me know if you have some additional answers, or questions, that our audience of channel decision-makers needs to be constantly evaluating.

Quick Note: November's CIO Magazine's Poll of top CIO's showed a plan to increase tech spending +4.2% over the next 12 months, a decline from the 6.0% level projected in October. "The overall IT spending outlook remains unclear but we are encouraged that the outlook by large corporate CIOs has improved month to month," says George Elling, Managing Director, Enterprise and PC Hardware Research for Deutsche Bank Securities. My take on this is that the active, leading-edge vendors and integrators are going to win business and those people waiting for the phone to ring with large contract renewals are going to be disappointed. "While budget projections remain subdued for the next 12 months, it is possible that CIOs are getting more bang for their IT bucks given soaring productivity," Dr. Ed Yardeni, Chief Investment Strategist for Prudential Equity Group.

Share your comments with ChannelMedia with an email to kanewman@sbcglobal.net. Subject line: ChannelMedia Feedback.




Q&A with Macromedia's Michael K. Menegay, Senior VP of Worldwide Channels
By ChannelMedia Staff

Q: What is Macromedia Breeze?

A: Breeze is the Macromedia software platform for rapid learning and training that enables you to simplify and accelerate online meetings, presentations, and training with one revolutionary integrated solution. Breeze has three modules: Breeze Presentation, Breeze Training, and Breeze Live.

Breeze Presentation allows you to personalize Microsoft PowerPoint presentations with your own narration and easily deliver them on demand through any standard web browser in Macromedia Flash format. Content experts and instructional designers can now develop and publish materials with ease by creating new or pre-existing PowerPoint presentations that integrate digital video, Flash simulations, and other types of media and provide a rich experience for the viewer.

Breeze Training allows you to build a complete online training system with PowerPoint presentations that includes surveys, tracking, analysis, course administration/management, and content management. Now you can schedule courses, invite and register participants, and track attendee statistics. Test the effectiveness of your courses by building quizzes and surveys into your PowerPoint presentations. Generate detailed reports on courses, students, and test results and set up automated certification criteria. Manage users, set permissions, and run reports to log the number of viewers and gauge the effectiveness of your Breeze presentations and courses.

Breeze Live provides an unequaled experience in online meetings, allowing you to meet instantly with colleagues anywhere at any time. Imagine online meetings that actually work! Because Breeze Live works with Macromedia Flash, setup is quick and intuitive. No software downloads or plug-ins are required. Now you can bring PowerPoint slides, digital video, Flash simulations, and other types of media into your live meetings. Chat with a few people or broadcast to many. Web cast applications on your PC through screen sharing. Schedule meetings in advance, preload content before meetings, and use preset or custom meeting room layouts. You can even save rooms for recurring meetings and record it all easily for future viewings.

Macromedia offers Breeze hosted packages, or you can host it on your own company's servers.

Question #2
Q: How has the use of Breeze technology impacted your channel organization at Macromedia?

A: Breeze has helped our smaller account management, programs, marketing, operations, and technical teams to scale, covering more partners and partner types across larger territories. With Breeze we are communicating more efficiently and executing our training and enablement activities more often and with much greater consistency. Overall we are sharing information with partners and their teams far more cost-effectively than ever before. Our savings on travel expenses alone in one quarter was enough to pay for the software. Breeze is keeping us on time and on budget.

Question #3
Q: In what phases of the channel partner lifecycle is Breeze technology and its individual modules most helpful?

Recruiting: Breeze helps us make every meeting a face-to-face one. Connecting with every prospect in a Breeze Live meeting has helped increase our channel partner recruitment and retention rate. Meetings are not only more effective and productive but they happen more often and with limited costs. We are building strong channel loyalty through frequent and meaningful interactions with channel partners through Breeze.

Enablement and Training: Breeze Presentation and Breeze Live make rapid learning possible and highly effective. Together they help us ensure competency throughout the channel. Breeze helps channel partners cut through the clutter, delivering the latest information wherever and whenever it's needed. We deliver timely and relevant information on process and product from Macromedia SMEs in an organized fashion. All content can be recorded and saved in a repository, to be reviewed later on demand or for reference purposes. By making effective use of the Internet, Breeze keeps channel partners informed and trained with less cost, less travel, and less time away from their desk and territory. It is quickly becoming our partners' preferred way of learning and exchanging information with us as a vendor.

Marketing: Breeze Presentation, Breeze Training, and Breeze Live increase the effectiveness and tracking of marketing programs. Breeze gets our message out quickly to a worldwide channel partner and customer audience in one-to-many events by using the web to reduce logistics costs. Breeze reduces event management staffing and allows us to sponsor more events more often. Offering recorded events from our website helps capture new partners and customer prospects who could not otherwise attend an event.

Sales: Breeze impacts revenue today! We spend less time traveling and more time meeting with more prospects. Breeze Presentation and Breeze Live turn sales calls into interactive online demonstrations. In minutes we can bring remote key decision-makers together. By recording meetings for those who are not in attendance, we can help shorten long, complex sales cycles.

Feedback: Breeze gives Macromedia insight into who is understanding our message and who is not. Understanding the effectiveness of process and programs is critical to any channel organization. With Breeze Presentation and Breeze Training we can deploy content to channel partners, register participants, and track attendee statistics and competency level with great detail. We can also survey quickly on specific topics, processes, and programs to understand perceptions and make necessary adjustments quickly. We have found over time that channel partners are loyal to vendors who listen and respond. There is a lot of competition out there for a limited amount of mind share. In the channel, change is inevitable and making the right change at the right time is critical. Breeze has put us far ahead of the game and will keep us there.

Question #4
Q: How long does it take to learn Breeze technology and integrate it efficiently and effectively into your daily process in the channel?
A: Our internal channel team was installed, up and running, and being trained within one hour. Within one week we had a strong working knowledge of all three Breeze modules and had begun integrating them into our daily process. We found Breeze to be very approachable and intuitive. Not only was it easy for us to learn, but it was simple to use. Our channel partners enjoy Breeze and the flexibility it provides them to receive information from Macromedia. We see the use of Breeze to communicate, educate, train, and enable our channel partners as a big competitive advantage over other vendors competing for mind share.

Question #5
Q: How can I learn more about the Macromedia Breeze product platform?

A: Just click here:

Macromedia Breeze for Channel Management
http://www.macromedia.com/software/breeze/solutions/sales/channel_readiness/

Macromedia Breeze product home page
http://www.macromedia.com/software/breeze/

Macromedia Breeze FAQ
http://www.macromedia.com/software/breeze/productinfo/faq/

or contact Macromedia directly at 888-649-2990 or sales@macromedia.com.



2003 - A LOOK AT TRENDS IN THE RESELLER CHANNEL
By Jill Kerr
Sponsored by:


Sometimes the best research is completely unscientific. For this article my research methodology was what I call "shut up and listen." When I want to find out what's really going on in the SMB channel, I get in front of some of the resellers in my network and ask the question. "How's business?" "What's going on out there?" "What trends are you seeing?" Or in this case I asked them, "How was 2003?" And while the answers may not be scientific either, they provide a candid look at what's happening with the SMB resellers.

SMB SPENDING

In general, I hear that things are improving out there. Small business is starting to spend again. Of course this could be due to one of two reasons - either the economy is indeed improving or these companies can not wait any longer to update their infrastructure. Most resellers I talked to seem to think we're finally seeing the light at the end of the tunnel. They remain cautiously optimistic. It will most likely take another quarter or two to know for sure.

THE ATTENTION SMB RESELLERS DESERVE

SMB resellers seem somewhat divided on the topic of whether they are getting the distributor and vendor support they deserve. MJ Shoer, President of Jenaly Technologies, Portsmouth, NH says, "The smaller companies like Jenaly are finally getting the attention of the players out there. More vendors are finally making it easier for us to do business in a more open manner. In other words they are not demanding unrealistic fees from us just to get involved, and they are not enforcing quotas like they used to. (We) smaller companies finally have access to support resources that allow us to do our job properly without the typical red tape." But then Bob Lamb, President, ESI Technologies, Athens, TN reports a different experiences as an SMB reseller. "There's lots of talk about the SMB market but major vendors don't have a plan worked out to attack that market, and there's still no respect for the small reseller/VAR from the vendor community." Hmmm...

SERVICE, SERVICE, SERVICE

Resellers are talking about service. "How do I turn my operation into a service business?" "How do I find service opportunities around the country?" "How can I set up satellite offices in remote cities that I can run remotely with off-site technicians?" Going forward, service will be the ticket for resellers. Everyone believes that the SMB resellers who learn how to optimize the service opportunity will be the survivors. SMB resellers are tired of trying to compete with Dell and the superstores. A service-based model will allow them to truly differentiate themselves and move into a more profitable space.

VERTICALIZATION

SMB resellers know that they need to focus their business and many they realize they aren't. "I pretty much go after anything and everything that pays, " says one. "In short, I lack focus...focus on a specialty, focus on a vertical market and focus on where I want the business to go in the future." Resellers who come to this realization are beginning to look at ways to target their business on lucrative vertical markets.

I heard a lot about smart homes. Alan Baldwin, President of Fine Images, Louisville, KY attended CompTIA's Breakaway conference and also the Electronic Home Expo in Long Beach in November. "I came away wowed, " he says. "It was information overload but this will be a good thing to add to our services." He's already working on a model/demo home to show future customers. "Now is the time to get into the home automation field. It is a perfect fit for network installers and systems builders."

Healthcare is another vertical that has resellers excited. Whenever the government creates regulations (HIPAA), there's money to be made. Savvy resellers are targeting medical practices and focusing their businesses on this potentially lucrative niche. Education will be key in this arena, however. Resellers who want to get into this market will need to be committed to learning more about healthcare regulations and the specific technologies that support healthcare organizations. Ingram Micro has stepped up to guide their customers. The distributor has a well-established healthcare initiative that is heavy on education and features a dedicated HIPAA support desk.

DISTRIBUTOR BUZZ

And while this may sound like an endorsement, when resellers say something positive about a distributor, I think it bears repeating. Without prompting, resellers are talking about D&H. The distributor, they say, is aggressive in its conviction to attract new reseller partners. They've expanded their product line greatly and they're doing what it takes to win the business. D&H President Gary Brothers was a huge hit with one of the very small resellers he met at CompTIA's Breakaway conference this summer when he actually took the time to visit with that reseller on a subsequent trip to St. Louis. I report what I hear.

JUST WHEN YOU THOUGHT...

Of course to an SMB reseller what happened in 2003 could have everything to do with being dealt a bad hand and have absolutely nothing to do with their business savvy or the climate of the industry. One reseller shared with me that when his service manager had a nervous breakdown this year, he had to take over her responsibilities, sold little to no new business and had to start the long climb all over again to get back to where his business was. We sometimes forget that the resellers who sell to small business are just small businesses themselves!

GO, GO IS GONE

The realization has sunk in by now that the "go, go" days of this business have "gone, gone." The SMB resellers who have survived are in it for the long haul. Whether it was strategy or luck that brought them to where they are now could be debated but the facts are they are still standing and they are the backbone of the technology industry. I see SMB resellers hunkering a little but positioning a lot. They're already looking for next year's opportunity.

Jill Kerr consults with technology organizations that want to enhance their relationships with resellers. She may be reached at jill@kerrandcompany.com 703-927-8204

More Industry Trends

Of the more than 1,000 survey participants, 95 percent of Microsoft's Certified Business Partners expect revenue growth in the next 12 months, according to a Microsoft-commissioned study released today by SoftwareMinds. The 33-page report focusing on business outlook and operational best-practices-the most comprehensive of its kind ever conducted with Microsoft's Certified Partner Council-indicates that:
  • Ninety-five percent of the more than 1,000 respondents expect revenue growth over the next 12 months, though 43 percent reported flat or declining revenues for the 12 months ended June 30, 2003, and 25 percent said they had been unprofitable during this period.
  • More than one quarter of the respondents expect revenues to grow in excess of 25 percent in the next 12 months, and nearly half (48 percent) expect revenue growth of 5-25 percent in the same period.
  • The overall economic climate was blamed by 60 percent of the respondents as the major contributing factor to underperformance during the prior 12 months. Other important contributing factors were changes in customer/prospect budgets, the global economic climate, competition and retention of sales personnel.
More than half of the respondents reported that adding new products or services had increased revenues, and was the most important contributing factor.
  • Of the 11 industry segments named in the survey, respondents rated the financial services and insurance sectors as the most significant sources of ongoing and new revenues for Microsoft resellers.
  • Not surprisingly, more than half of the respondents (60 percent) expect increasing revenues from products and services that address IT security needs.

The typical respondent was a nine-year-old firm with less than $5 million in annual revenues and with more than half of its revenues coming from the sale of IT consulting services. The full study covers business performance and outlook, consultant and trainer utilization, sales organization and compensation, marketing, and recruiting and retention. "It's been a tough economy for many of our partners, and it's good to see the outlook for the coming year is more positive," says Christina Hart, Microsoft's manager of U.S. Certified Partners program. "We're intent on helping our partners develop successful businesses, which, of course, will contribute to the fundamental health of the entire IT industry. This study on the best practices and outlook of Microsoft-certified services companies and resellers is one important way we provide value to our partners in their quest for improved business development." "The results of this study clearly indicate that future business growth for Microsoft business partners is quite favorable," said Kirsten Chapman, SoftwareMinds' marketing vice president. "And the high level of participation suggests these partners are concerned about improving business operations through a better understanding from peers of how to take advantage of expected industry growth." SoftwareMinds is an independent business operations research and publishing venture serving the information technology industry.

GWI Software, the oldest continually operating provider of IT helpdesk solutions, announced that they received Microsoft's Gold Partner Certification for Software Products. The Microsoft Gold Certified Partner Program brings market recognition to companies providing consistent, high-quality products built on the Microsoft platform. To date, GWI Software is the only provider in its market to receive such certification. "Only companies that have demonstrated the highest levels of customer service, proven their experience and attained advanced certification receive the designation of Microsoft Gold Certified Partners," says Allison Watson, vice president of the Worldwide Partner Sales and Marketing Group at Microsoft Corp. "Today, Microsoft recognizes GWI for its skills and expertise in providing customer satisfaction with Microsoft products and technology."

Sponsored by:




Q&A w/FSLogic President Jared Blaser
By ChannelMedia Staff

Give us an update on FSLogic's business?
FSLogic had a successful product launch with FSLogic Protect in October. We have received two industry award nominations: VARVision 2003 Best of Show, Software, and, PC Magazine 2003 Technical Excellence: System Software. These nominations are helping to draw worldwide recognition for FSLogic. We are seeing increased interest in our products with potential resellers and end-users.

How does 2004 look to be shaping up?
Now, with the foundation of market visibility in conjunction with our growing reseller base we expect 2004 for to be a very good year. The educational market buying cycle will kick in during Q1/Q2 and presents an excellent opportunity for FSLogic to increase its market position. We have initiated some international activities in Q4 and we expect to see positive and tangible results from overseas markets increasing throughout the year.

How are you differentiating yourself in the market?
By developing superior products with unique capabilities for the user not available from other products such as providing a completely portable user "personality", working with resellers instead of going direct, and establishing strong relationships with possible bundling partners, FSLogic expects to stand out as the preferred vendor for open access PC environments.

Any channel success stories that you can share?
FSLogic has several key relationships in the works, but we are not quite ready for public release those names at this point. We are in the process of building the channel, and those that are onboard already are working on their offerings.




RESEARCH

Gartner Research

The Lure of Selling IT Services Via Other IT Solution Providers
Michael Haines, Principal Analyst, IT Services Business Strategies Group

IT vendors and solutions providers continually struggle with the challenge of optimally capturing addressable market opportunity. In addition, a direct sales strategy is often not viable for the vast SMB market, thus partnerships with other providers need to be leveraged for market reach. Recent Gartner research indicates that IT services companies are starting to succumb to the lure of selling their services via (to, through, with, and for) other IT services firms. Several catalysts are contributing to this activity:

The changing dynamics of customer demand. Businesses are seeking IT solutions that address critical requirements that will help them gain competitive position and realize operational improvements. Customers are less inclined to deal with a large number of IT solution providers on a regular basis, driving providers to work together to deliver the required customer solutions. IT solution providers are seeking methods to increase penetration into new markets, particularly the SMB market. 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 solutions companies that already have a presence in selected target markets for this growth.

Many IT solution providers cannot provide the entire solution with their offerings alone and must combine offering with other service providers to deliver comprehensive solutions. As buyers focus higher up the value chain for IT services solutions, business processes and applications, IT solutions providers that do not play in the upper level of the value chain must partner with those that do to reach this segment of the market. The final catalyst is all about economics. During the recent period of extended economic stagnation, IT solutions providers sought to expand sales reach to identify all of the potential addressable market opportunities.

Recent Gartner research conducted with leading IT solutions companies to determine their strategies, initiatives, and plans related to the selling of IT services offerings via other IT solution providers revealed a number of interesting findings and trends. Eighty percent of IT services 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. Other IT services providers are expected to be a significant and important buying center for IT services. 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 similar research was conducted in 2001.

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.

Only slightly more than half of IT services providers are conducting co-marketing efforts. With those that are, the co-marketing programs that are proving to be most effective are traditional programs such as co-operative selling, events and success stories. Technology-based co-marketing programs, such as webcasts and e-marketing, have delivered unsatisfactory results.

What should you do next?
This market shift should motivate IT services and solutions providers to consider the following actions as part of a refreshed strategy:

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.

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 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 co-marketing programs should be used for lead generation efforts and in support of traditional co-marketing elements.

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Bigger is Better: 17-inch Notebooks Take Retail By Storm
By Matt Sargent, Director of Research, PC Group


I'm not a truck guy. I just don't get it. I have a warped belief that my four door sedan has all the room I need to make it through my daily life. But, living in Southern California, it is impossible to deny the popularity of SUVs. Everyone, from construction workers to soccer moms, swears by the SUV -- and over the last few years the car industry has jumped to fill this highly profitable niche. Everyone from Ford to Porsche now offers an SUV with a huge degree of variation within the segment. The term SUV now applies to vehicles ranging from the high end Cadillac Escalade aimed at 60-something retirees and celebrity athletes to the X-generation inspired Nissan Xterra.

While I don't get the SUV phenomenon, I do grasp a somewhat similar movement within the PC market place. While I am most certainly not a truck guy (the auto mechanic who took me to the cleaners for my last "scheduled" check up will testify to my lack of overall automotive knowledge), I am a tech guy, and the one cool tech toy I have an insatiable appetite for this holiday season is the 17-inch notebook. When I first heard that Apple was offering a notebook with a 17-inch display I was suspect. I had worked with 16" notebooks and considered the display to be too tall for easy usage. I am not exactly sure what it was about the height of a 16" display that bothered me, but it simply looked disproportionately tall. Perhaps it was a feeling that this was a disaster waiting to happen - envisioning the system tipping over under the weight of its own display. It just didn't seem right. A 17-inch display I reasoned would be even worse. Apple, however, took a new twist on large displays by increasing the width, and not the height of the display, the result being a "wide screen" display not much taller than a 14" notebook. I was immediately struck by how inviting the form factor was and how positively it would resonate within the home market. The biggest problem with the Apple system was price. At $3,299, the original 17-inch Apple PowerBook would not make it beyond the small, but fiercely loyal Apple installed base. While the PowerBook certainly scored well among this group, broad market acceptance was not going to happen at $3,000.

Acceptance within the market came with Toshiba's version of the 17-inch form factor. The Toshiba Satellite P25-Series was born, and with it a whole new market was created. No longer did all notebooks within retail look identical with non-descript 15-inch displays. The P25 was the first SUV of the notebook market, and similar to the acceptance of the SUV, the P25 found immediate success. Not wanting to miss out on this new market, HP followed Toshiba with the Pavilion zd7000-series. Like the Satellite P25, the Pavilion zd7000 did extremely well in retail becoming one of the top selling notebooks for HP within a few short weeks of its release. Additionally, HP was able to grab interest for the 17-inch form factor in the mid-tier market with a $1,699 zd7000 that performed very well. In just a few months, the Toshiba Satellite P25 and the HP Pavilion zd7000 drove the 17-inch notebook market from virtually no retail unit sales to almost ten percent of sales. The HP Pavilion zd7020US currently ranks in the top ten models currently sold in retail.

Interestingly, the P25 is everything that a notebook shouldn't be, according to the stereotype of portable PCs. It is VERY heavy weighing in at nearly ten pounds. It is bulky and thick. If "thin and light" are the watch words for notebook design, why has the P25 done so well? The reason is because the definition of the notebook PC is changing now that the consumer market has become more interested in the segment. Weight isn't important if you are simply moving from one room to another and never plan on taking the system beyond the four walls of your home. Another aspect not necessarily important to the home user is battery life. Who cares if a notebook only gets one and a half hours of battery life if I am within ten feet of a power source at all times?

These differing needs have created a new opportunity for notebook manufacturers, much like car owner's preferences created the SUV. Does a home computer user necessarily "need" a 17-inch notebook? Definitely not -- standard 15-inch or even older 14-inch systems will get the job done. However, a 17-inch widescreen provides a level of differentiation for users looking for more than the standard "vanilla" PC. This differentiation has been a missing component of the PC industry for some time, and like the rush car manufacturers made to the SUV, ARS expects that the computer industry will rush to supply the need created by the 17" form factor. Now if only my SUV friends wouldn't laugh at my car.






Top-Selling Software
Week of December 7 - December 13, 2003
All Categories
1 Norton Antivirus 2004 Symantec $41
2 TurboTax 2003 Deluxe Intuit $39
3 The Sims: Makin' Magic Expansion Pack Electronic Arts $32
4 Call Of Duty Activision $45
5 MS Zoo Tycoon: Complete Collection Microsoft $27
6 Finding Nemo: Nemo's Underwater World Of Fun THQ Inc $18
7 Norton Internet Security 2004 Symantec $67
8 The Sims Double Deluxe Electronic Arts $41
9 MS Windows XP Home Ed Upgr Microsoft $99
10 Backyard Football 2004 Atari $16
 
Business
1 MS Office 2003 Student/Teacher Ed Microsoft $148
2 QuickBooks 2004 Pro Intuit $278
3 MS Office XP Student & Teacher Ed Acad Microsoft $130
4 QuickBooks 2004 Intuit $197
5 Norton AntiSpam 2004 Symantec $40
6 My Bookkeeper Elibrium $25
7 Pop-up Stopper Companion 3.0 Panicware $30
8 MS Office 2003 Pro Upgr Microsoft $323
9 MS Office X Student/Teacher Ed Microsoft $131
10 MS Office 2003 Microsoft $398
 
List is based on units sold by twenty-three channel partners. For more information, please contact The NPD Group at (703) 376-6226.





COMMUNITY

Channel Digest
By ChannelMedia Staff

SunGard Data Systems Inc. resumed its buying spree on Wednesday, announcing a deal to purchase Systems & Computer Technology Corporation for about $584 million in cash. Under terms of the deal, SunGard will pay $16.50 per share for SCT, a Malvern, Pa., developer of education software. IKON Office Solutions announced an agreement to sell certain assets and liabilities of its U.S. and Canadian leasing business to a unit of GE Commercial Finance for $1.5 billion. Extreme Networks said it expects a second quarter loss of 6-2 cents a share, excluding the impact of amortization of warrants granted to Avaya. The figure is below the current Thomson First Call consensus of earnings of 2 cents a share. Revenue is pegged at $80-85 million, lower than the $87.4 million earned in the first quarter, mainly due to product constraints. Shares dropped 14.5 percent to $7 on Instinet. French IT services group Cap Gemini warned it expects fourth quarter revenue below expectations as clients delay signing contracts. Shares dropped as much as 12.3 percent in Paris. Check Point Software said it plans to acquire Zone Labs, an Internet security software provider, for $205 million in cash and stock. Zone Labs has raised $45.5 million in venture capital to date from investors including BA Venture Partners, Intel Capital, JK&B Capital, Oxford Bioscience Partners, Pacific Venture Group, and Visa International. Business Objects, a business software maker, said on Thursday that it had closed its $1.2 billion acquisition of rival Crystal Decisions. The takeover cleared its final hurdle when Business Objects' shareholders approved the acquisition at a Thursday meeting in Paris. Although Business Objects is based in France, the company also maintains a large U.S. hub in San Jose.

Stratus Technologies announced the launch of a new ftServer(R) Partner Program, a comprehensive, multi-category program providing a low-risk, high-margin route to the rapidly expanding business- and mission-critical availability markets. Strategic channel partners will come from a select group of value-added resellers, independent software vendors, system integrators, generic resellers and geographic distributors who share Stratus' commitment to provide end users with the highest levels of availability for Microsoft(R) Windows(R)-based solutions. "Because our primary ftServer sales model is through partners, Stratus aggressively recruits and rewards solution providers and resellers who meet our exacting quality standards and can contribute to our global marketing strategies in a substantive manner," said Tony Amico, manager of Channels Marketing at Stratus. "If a solution provider views uptime reliability as a high-value feature of its applications suite, then it can profit from offering our affordable, industry-standard ftServer line and the unique service offerings that complement it." The ftServer Partner Program defines and rewards three categories of participation based on levels of revenue commitment and sales success. All newly signed partners receive CD-based sales tools and marketing collateral; access to a secure partner Web site with tools for system configuration, order entry, marketing information and materials updates; and a Stratus Web-based Solutions Guide that promotes the partner and its ftServer-supported solutions.

HOT PRODUCTS

Covast, provider of the recommended electronic data interchange (EDI) solution for Microsoft BizTalk Server, announced today that in Q3 the company increased revenues over a phenomenal Q2 of this year by yet another 17% and topped third quarter 2002 revenues by 183%. Contributing significantly to the surge in revenues was the fact that the company brought on over twenty new customer accounts worldwide. SonicWALL announced that its SOHO TZW secure wireless gateway has won PC Magazine's 2003 Best of COMDEX award in the wireless infrastructure category. Among the nearly 500 award entries, SonicWALL's SOHO TZW was selected as the wireless product best poised to positively affect the future of IT. iCode was recently named as a finalist in the 19th Annual Codie Awards. Everest is one of just five products to make it to the finalist level within the Best Business Software Product or Service category. Everest Advanced Edition 1.0 was named a 2003 finalist for the Best E-Commerce Solution, making this Everest's second year to have received this highly esteemed recognition. "In light of the intense competition this year, to be named a Codie Awards finalist is a tremendous honor and an important achievement. SIIA is proud to recognize these companies as true leaders in their fields." says Ken Wasch, SIIA President. "To be recognized by such a renowned body is a great honor for us at iCode," said Bijal Mehta, iCode's president and CEO. "Although we have received a number of awards over the year, we are extremely honored with the recognition received from The Software & Information Industry Association. This is a reaffirmation of our commitment to our customers." In addition to receiving two Codie Award Finalist achievements, iCode's Everest Advanced Edition was named as the Microsoft Small Business Solution of the Year in 2001 and received a Five Star Rating from CPA Software News in 2002. Sony Electronics is shipping its first generation of Professional Disc for DATA optical storage drives, automated devices and media to OEMs and system integrators. Based on blue laser technology, the new Professional Disc for DATA media stores up to 23 GB of native capacity per rewritable or write-once, read-many (WORM) disc, while the new drive sustains a maximum native transfer rate of 11 MB/sec, delivering an advanced optical storage and archiving solution for professional data-intensive applications. For high capacity and high performance disc handling, the new automated Sony Autochanger offers up to 1.6TB of native capacity in a compact 19-inch rack-mount design that may be configured with one, two or four drives for the desired balance between storage capacity and speed. "The new Professional Disc for DATA devices are positioned as a natural successor for users who have outgrown the 9.1 GB capacity per magneto-optical (MO) disc offered in the market today, and are looking to use removable storage to address the intensifying data retention and storage requirements driven by growing government regulatory mandates," said Rick Thong, manager of OEM optical storage solutions marketing for Sony Electronics' Component Solutions Business Division. Agfa Corporation and Dimension Data Holdings announced a reseller agreement that will make Dimension Data's technology services solutions available through the Agfa HealthCare sales organization in the United States. This agreement is designed to give healthcare providers greater choice when seeking an integrated image and information management solution. The agreement will enable Agfa to offer a broader range of client strategy development services, in addition to the full range of networking, storage, integration, and imaging solutions that Agfa already offers its Picture Archiving and Communication System users, administrators and organizations. Agfa and Dimension Data will immediately focus on the growth of shared professional services dedicated to Agfa's PACS and the healthcare provider market as a whole. Initial offerings include the HIPAA Security Assessment; PACS-related security, network, and storage services; and associated hardware requirements. "Every customer has unique needs that call for unique solutions," said Michael Green, global head of Downstream Marketing, Agfa HealthCare. "Agfa is committed to aligning with technology leaders like Dimension Data to provide our customers the greatest solution flexibility available, in the most economical and straight forward way possible." Plumtree Software announced the release of a new add-on to its Enterprise Web Development Kit for creating interactive portlets using Microsoft .NET Web Controls. Part of Microsoft's .NET Framework, .NET Web Controls are simple, visual drag-and-drop elements that developers can use to create Web applications. Hundreds of .NET Web Controls created by Microsoft and the .NET development community can now be used without any coding to create portlets within the Plumtree Enterprise Web Suite. As a result, organizations can build rich, interactive applications from existing .NET and Java components at low cost. With legislators, regulators, and companies intensifying the debate over what consumer data can be shared or sold as a result of the "Do Not Call List," BearingPoint., one of the world's largest business consulting and systems integration firms, can help Financial Services companies understand and comply with new federal regulations with the QuickScan(SM) customer relationship management (CRM) assessment tool. "Even with the obvious benefits to consumers from the 'Do-Not-Call' list legislation, companies still need to retain the ability to reach-out to their customers," said Mindy S. Propper, a vice president with BearingPoint. "Financial institutions need to balance this need with customers' own 'opt- out' preferences. Companies can still increase the range of their allowable outreach to existing customers through the use of multi-channel marketing programs as long as they align those efforts with customers' preferences." Sophos revealed the top ten viruses and hoaxes causing problems for businesses around the world. The report, which examines virus and hoax reports in the month of November 2003, shows that a new email-aware worm stormed to the top of the charts, while an existing hoax had a new burst of life. The top ten viruses in November 2003 were as follows: 1. W32/Sober-A (Sober worm) 32.6% New entry 2= W32/Mimail-C (Mimail variant) 9.5% 2= W32/Mimail-F (Mimail variant) 9.5% 4. W32/Dumaru-A (Dumaru virus) 8.0% 5. W32/Mimail-A (Mimail worm) 5.1% 6. W32/Gibe-F (Gibe variant) 4.5% 7. W32/Nachi-A (Nachi worm) 2.6% 8. W32/Mimail-J (Mimail variant) 2.4% 9. W32/Klez-H (Klez variant) 2.2% 22 months in chart 10. W32/Mimail-E (Mimail variant) 1.5% Others 22.1% "Although Mimail made five appearances in this month's chart -- totaling over a quarter of all reports -- it is the bilingual Sober worm that has caused the most problems for computer users this month," said Chris Belthoff, senior security analyst at Lynnfield, MA - based, Sophos, Inc.

Maxtor said that Victor Company of Japan Ltd (JVC), involved in the development, manufacturing, and sales of audio, visual, and computer-related products, has selected Maxtor(R) QuickView(R) consumer electronics (CE) hard disk drives for its DR-MH5, HDD & DVD video recorder. "We are pleased to continue building upon our strong relationship with JVC," said Mike Cordano, executive vice president, worldwide sales and marketing at Maxtor. "This selection is yet another proof point in Maxtor's strength in the Digital Entertainment market and demonstrates our commitment to providing consumer electronics manufacturers with the best advancements in disk drive technology." The new JVC DR-MH5 HDD & DVD recorder incorporates a Maxtor 120GB QuickView CE hard disk drive. The drive provides approximately 120 hours of video recording and has the ability to record two programs simultaneously. In addition, the DR-MH5 includes a ghost reduction tuner which brings the ability to record clearer images. SnapGear, a leader in embedded Linux security, provides design, engineering and fulfillment services for network appliances that ensure secure Internet communications for business. SnapGear partners with OEM customers including Vivendi to deliver custom security solutions worldwide. It also distributes VPN/firewall security products through systems integrators in more than 40 countries. SnapGear's engineering team has been instrumental in the development of uClinux, which has been ported to more than 100 chip architectures, as well as the pioneering implementation of Microsoft's PPTP VPN standard on Linux. SnapGear's Embedded Linux distribution includes uClinux, which runs in more than 20 million devices globally. SnapGear, which is profitable and currently turns about $10 million a year, is able to take sales away from Cisco and other larger competitors in the small to medium sized enterprise market and above with products that sell for as little as 1/5th that of Cisco products. InFocus has selected UPS Supply Chain Solutions as its provider for logistics services. UPS Supply Chain Solutions will provide InFocus with repair and refurbishment services in the United States. Ultimately, InFocus intends to expand the relationship with UPS Supply Chain Solutions to have it perform global repair and refurbishment, logistics and transportation services. The services to be provided will assist InFocus, its partners and customers in lowering logistics, transportation and operating costs. UPS's best-in-practice techniques and scalable capabilities are expected to improve product delivery and meet global service demands. "As the leader in projection technology, we chose to team with UPS, a best-in-class company that is as dedicated to customer and partner service as we are," said Kyle Ranson, executive vice president, Worldwide Sales & Marketing. "This unique agreement in the projection industry sets the bar for seamless customer service between InFocus, our partners and end-user customers; allows for optimization of inventory in a central location, and increases the efficiency of moving inventory assets by reducing the number of product touches. Also with added flexibility, shipments can arrive in a matter of days or overnight depending on the ever-changing needs of customers." Entel Corporation, a VoIP equipment manufacturer, has committed to provide enterprise, SME, SOHO and ISP/ITSP the best, scalable and reliable application/solutions to their voice infrastructure. With the introduction of SIP protocol included in the VOiP product line, Entel's technology will assist companies in substantially lowering communication cost with the most innovate technology in VoIP. Starting the fall of 2003, Entel announced SIP (Session Initiation Protocol) as part of our ECGate family. The SIP protocol is designed to address the functions of signaling and session management within a packet telephony network. Signaling allows call information to be carried across network boundaries while session management provides the ability to control attributes of an end-to-end call. Like other ECGate series, the 4300 series has the same benefits and advantages with the rest of the family but with added features and applications of the SIP protocol. Mark Chang, Managing Director announced that, "Entel will provide financial packages for the reseller. These to include floor plans, end user leasing and financing. By having a financial package we can assist our resellers in providing communications solutions that save money from acquisition to implementation to usage!" Polycom, a publicly traded provider of video and voice conferencing, conference bridges, and integrated Web collaboration services, inked a deal to acquire Voyant Technologies, a provider of video conferencing and collaboration services in exchange for approximately $110.7 million in cash consideration, or $95.7 million net of the expected amount of Voyant cash to be available at the closing. Voyant received a $15 million investment from TA Associates in October 2000. Kashya, a leader in high-performance, cost-effective business continuity solutions, announced today the appointment of industry veteran Ken Epstein as Vice President of Sales. Epstein will be responsible for overseeing Kashya's expanding sales team and rapidly expanding the list of customers adopting the innovative KBX4000 Kashya Data Protection Appliance(TM) into their corporate infrastructures. Epstein has more than two decades of global information technology sales and sales management experience in the storage industry. Prior to joining Kashya, he was Vice President of Sales at TrueSAN, a provider of unified information management and a supplier of next-generation network storage systems and software. Red Hat announced that Alex Pinchev, who was appointed President of International Operations in April, 2003, will assume executive leadership of worldwide sales in addition to leading Red Hat's international operations. Red Hat also announced that Tim Buckley, Executive Vice President and Chief Operating Officer with responsibility for North American sales and global channel sales, will retire after five years with Red Hat.

The Support Net Division of Arrow Electronics has formed a sales division that will allow IBM resellers to gain access to the multi-billion-dollar government IT market. "The government IT market is one of the fastest-growing technology sectors today and resellers need support in this growing market," said Eric Williams, executive vice president, Support Net Division. "We see an enormous opportunity to open the door for our resellers to increase their presence in the government IT sector. We've responded to the opportunity by making a significant investment in creating a national sales and support organization devoted to helping our partners to develop this market." With a dedicated national staff and infrastructure in place, Arrow's Federal Government Sales Division will provide sales and marketing support, strategic development, technical support services, and customer and contract management to IBM resellers seeking government contracts. "To effectively sell into the government market, you need the capability to meet government pricing requirements and demonstrate that you can support government customers," said Kevin M. Costello, vice president, Federal Systems Integrators, IBM. "Arrow's Support Net Division brings a proven organization to the table that will help give IBM resellers the status and support they need to gain a greater foothold in government IT."




Changing Channels
By Steve Cross

What's Important These Days? Obviously revenue is #1 on the hit parade this year. However, during the recent downturn, companies were so focused on revenue that they forgot to do all sorts of important things.

Here's what's important all the time: Figure out who your customers are. The more detail the better. Marketers and customer outreach people need to pin up a picture and a description of their target customer over their desks. Everything you write, every ad placement, every outbound email, the script your telesales people use, your web site, and your product placements in the channel all need to support acquisition and support of the target customer.

Continue to spend, but spend appropriately. A consultant friend had a client that placed multiple end caps in retail every month of the year, across their entire retail channel. Until my friend did an ROI analysis, that is. He found that about 1/3 of the end caps were losing money! Just because an item is budgeted does not make it right, or an appropriate level of spending. Then spend the right amount on reaching the right customer (see above).

Take caps off your commissions, if your company has caps. This is one really cheap way to stimulate additional and incremental sales. If capped commissions are a religious issue with the company, even the Pope grants exemptions. If your company is not doing direct marketing; start. Whether you plan on sending emails for outreach, a newsletter for communication and informing, or a postcard announcing an update/upgrade, start communicating and keep communicating. If you don't take care of your customers, somebody else would love to do it for you!

Revenue is always going to #1. But if you think it's the only important thing; you're mistaken.

Contact Steve Cross at steve@crosschannel.com, 702-492-7472. Editor's Note: Steve is a channel consultant


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