Intel Delivers Message into the Home:
Q&A with Intel's Shirley Turner, Director of North America Channel Marketing

Q.	What is Intel's message here at System Builder Summit & VARVision?
A.	Intel had one key message for SBS/VV and that was Digital Home opportunities are here today for VARs and resellers.
Q.	And how would you support that point?
A.	In our keynote, we demonstrated a typical home today with a tangle of wires, one slow computer in the office, tons of stereo and TV equipment in the family room/living room, and chaos in the kitchen. Our "Intel Inside" team came on stage to "digitize" their home, a la "Trading Spaces". We're trying to make the point that the digital home can be a new business opportunity for VARs and System Builders that isn't that far off their current offerings. Start with a "Creative PC" in your office. This is the workhorse, the one that is loaded for Digital Content creation and, with the addition of a TV tuner card, content distribution as well. Now add wireless networking to your home. Go into the living room and you can replace your stereo and receivers with an "Entertainment PC", which can be the size of a small DVD player, Hook into your speakers, TV, and your wireless network so you can receive movies, music, or slide shows from your Creative PC in the other room. Moving into the kitchen (or dorm room or any constrained place), you can add a "Small Form Factor All In One PC" (SFF-AIO) that acts as a PC for checking the web (downloading recipes or ordering from safeway.com) and can also hook up to any TV screen or speakers and your wireless network you may have in the kitchen.
Q.	What should your "partners" focus on?
A.	Of these three devices, the creative PC should be the easiest one for System Builders and VARs to grasp. The Entertainment PC and the SFF-AIO are both available in barebones today for System Builders to integrate and brand themselves. The piece parts have been around for years, but the infrastructure is finally being laid out: DSL installs, proliferation of wireless networking in the home, storage capacity, and the number of digital devices available have all come together to create an environment to make the Digital Home a reality.
Q.	Where is the market today? Is it enough to sustain a Channel Practice?
A.	The perception of the Digital Home today is that it is too complicated or too "Jetsons" (futuristic) or both. The reality is, it's here today. Yes, there are still standards to be defined, but if anyone is interested in starting to expand their business model, the pieces are all there to get going. Intel is once again working with our Alliance partners to build an ecosystem, this time for the Digital Home, to help enable what's out there today. In addition, as founding member of the Digital Home Working Group (DHWG), we help define industry standards for the future.

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Channel Digest

CompTIA Update: Pre- and post-conference events build on CompTIA Strategies North America 2004 conference, highlight networking and learning opportunities in IT Training. The Computing Technology Industry Association (CompTIA) is hosting its 12th annual CompTIA Strategies conference from June 8 - 10, 2004 at the New Orleans Marriott. The conference is part of a unique process in North America, engaging leaders in IT training including commercial training providers, corporate training managers, high school and post-secondary IT instructors and representatives from government and not-for-profit organizations. "The CompTIA Strategies North America process provides a one-of-a-kind networking and learning opportunity for leading experts in the IT training field," said William Vanderbilt, director of CompTIA's Technology Learning Group. "At the conference commercial and academic training center managers meet face-to-face to identify new solutions, collaborate with peers and meet vendors. The conference is a key piece of the CompTIA Strategies learning process." The CompTIA Strategies NA process includes opportunities for information exchange prior to, during and after the event in New Orleans. A series of pre-event cybercasts, conference calls and e-community exchanges will provide advance preparation for the conference activities. The process continues post-event as delegates meet electronically to discuss implementation of practices learned at the event.

Bob Mosher, director of learning and strategy evangelism at Microsoft Learning will give the conference keynote presentation. A new report, "The State of the IT Training Industry" provides key data on the training and certification market and will be released at the event. As part of CompTIA's ongoing commitment to supporting the IT training industry, CompTIA Strategies North America 2004 addresses the issues raised by IT training managers at Colloquium 2004 in earlier this year. Supporting workshops will provide face-to-face collaboration opportunities for Strategies attendees to discuss issues and analyze best practices.

As part of HP's Smart Office SMB businesses, HP and Intuit agreed to jointly market with HP PCs and servers. HP and Intuit intend to deliver a range of products and services to help small businesses get started and grow with them, particularly as they move from a PC-based business to their first server. The memorandum reflects that Intuit has chosen HP as its intended alliance partner to scale QuickBooks to a server-based platform. "Intuit's QuickBooks is a leading solution for small- and medium-size businesses, with great brand appeal and customer loyalty," said Nigel Ball, vice president, Small and Medium Business segment, HP. "We intend to combine HP's reliable and secure hardware, service and support with Intuit's financial management applications. We expect this to enable SMBs to easily and quickly manage their finances so they can focus on their core business." HP and Intuit intend to market and sell the joint offerings through a variety of channels, including, Web sites, tele-web and resellers. The companies also plan to develop a "my first server" offering for SMBs combining the HP ProLiant server family with the QuickBooks Enterprise Solutions line. "This intended alliance will provide customers with powerful all-in-one solutions from two industry leaders in the SMB market," said Dan Levin, senior vice president of QuickBooks.

Targus debuted two new mobile computing accessories designed to increase productivity for notebook computer users. The new products include the Wireless Optical Mouse/Pointer/Presenter and the Wireless Numeric Keypad and Mouse Combo. According to IDC, more than two-thirds of the U.S. workforce will be classified as mobile by 2006. Targus is addressing the increased demand for lightweight, portable accessories with innovative solutions that minimize the clutter found in most notebook carrying cases. Targus' newest solutions satisfy these criteria with wireless connectivity, multi-purpose functionality and ultra-compact form factors.

Tech Data said it has expanded its POS/Data Capture Specialized Business Unit (SBU) to include nearly a dozen manufacturers of point-of-sale (POS) products such as touch-screen monitors, barcode scanners, cash drawers, keyboards, pole displays and printers among others. "Tech Data's increased catalogue of POS products and services affords resellers greater flexibility when developing POS solutions for their customers," said Karl Werner, director of Tech Data's Advanced Technologies Group. "As POS systems in the field continue to age and more efficient technologies evolve to take their place, the POS/Data Capture SBU positions our customers to take full advantage of this market." In fact, IHL Consulting Group, an independent business-research firm based in Franklin, Tenn., predicts that the retail industry will power the growth of the POS market as businesses replace older equipment or upgrade newer products to more reliable and user-friendly systems. According to a recent study, the overall POS market value for hardware, software, peripherals and maintenance grew to $7.1 billion last year. Tech Data's POS/Data Capture SBU offers product training, leasing programs, logistics management and other support services that allow resellers to meet the POS and Data Capture demands of a range of vertical markets including retail, pharmaceuticals, foodservices, office automation and warehousing.

Signiant and GTSI announced a partnership in which GTSI will sell Signiant's Mobilize remote data solutions to its government customers. Mobilize enables government agencies and companies to centrally control and securely move remote data between central and remote systems. "Moving and controlling data remotely is an increasing area of necessity for Federal, state and local government agencies," said Steve Deutsch, GTSI business operations manager for Emerging Growth Technologies. "With multiple locations, it is more efficient for agencies to manage data securely from one central location. We believe that Mobilize offers our government customers a real option for managing remote data that meets security, automation, and cost reduction requirements." "Gaining central control over remote data is an IT hot spot due to budget pressures, IT consolidation, and security issues," said Robert Browne, vice president of business development for Signiant Inc. "The enterprise-level capabilities of Mobilize make it a compelling solution for the government, and GTSI, with its reach and relationships, is an ideal partner to help us deliver Mobilize solutions to this market."

ADTRAN reported results for the first quarter ended March 31, 2004. Sales increased 32% to $114,039,000 for the quarter compared to $86,223,000 for the first quarter of 2003. Net income increased 94% to $20,398,000 for the quarter compared to $10,539,000 for the first quarter of 2003. Earnings per share, assuming dilution, were $0.25 for the quarter compared to $0.14 for the first quarter of 2003. Gross margin improved to 57.5% for the quarter compared to 54.6% in the first quarter of 2003. The increase in gross margin is principally the result of continuing improvements in manufacturing efficiencies and product cost reductions. Net cash provided by operating activities totaled $28 million for the first quarter. Cash and marketable securities, net of debt, totaled $352 million, at March 31, 2004.

Zhone Technologies, the first company dedicated solely to delivering the full spectrum of next-generation local loop infrastructure equipment, today announced the new Raptor 50 and Raptor 100 OSP DSLAMs; two new line-powered additions to Zhone's family of Raptor DLSAM products. These new compact Raptor DSLAMs provide next-generation features, with support for central office, remote terminal and non-powered wiring cabinet deployments, without new right-of-way. As part of Zhone's multi-service architecture, the Raptor family dramatically lowers carrier's fixed and operational costs of service delivery over the existing local loop infrastructure while adding incremental revenue with new service creation. In addition, these new products allow service delivery as far as 38,000 feet from a central office with power supplied over the uplink's twisted pair. The new Raptor 50 offers eight ADSL ports and is hardened for a full range of deployment options. The Raptor 100 OSP provides up to 16 ADSL ports and is enclosed in a weather-proof enclosure that can be externally mounted on cabinets, poles or buildings. In its broadband survey, the National Telecommunications Cooperative Association found that 45% of its members cite excessive loop lengths as one of the primary barriers to wide-scale DSL deployments. The new line-powered Raptors address this key issue by extending the reach of conventional standards-based DSL circuits to more than twice the serving area of traditional DSLAMs. "The flexible and robust Raptor family of DSLAMs provide everything a carrier customer needs to deploy and manage digital video, high bandwidth Internet access and cell relay services from a single remote platform," said Steve Rogers, general manager, Zhone Technologies. "Zhone's new Raptor 50 and Raptor 100 OSP DSLAMs further expand Zhone's product portfolio, and continues to eliminate the technical and economic barriers to profitably delivering triple play services."

Critical Path has named Mark Ferrer, a 22-year veteran of the software and services industry, as Chief Executive Officer. Effective immediately, Mr. Ferrer is assuming the CEO responsibilities formerly held by William McGlashan, Jr., who is continuing at Critical Path in his role as Chairman of the Board of Directors while also joining TPG Ventures, a leading venture capital firm, as a Managing Director. Mr. Ferrer brings an extensive background in sales, marketing and general management. Prior to joining Critical Path, he was the President and Chief Executive Officer at Vastera, Inc. (Nasdaq:VAST), a leader in global trade management software and services. Before that, he served as President of Baan Americas, where he held P&L responsibility for Baan operations in North and South America, and as Chief Operating Officer of Aurum Software (a Baan company), where he was responsible for sales, marketing, services and development. He also held numerous executive sales and marketing positions at IBM, most recently as Vice President, Software Marketing and Sales. "I am very proud of Critical Path and all that we have accomplished over the past three years. While I'm reducing my day-to-day role in the company, I plan to remain actively involved as Chairman, helping with strategy and continuing to work with customers and partners," said Mr. McGlashan. "I am extremely pleased that we have been able to attract a leader of Mark Ferrer's skills and background, and I look forward to working with him." "Throughout his tenure at Critical Path, one of Bill's key priorities has been to build a management team that is attuned to the evolving needs of the company," said William Ford, member of the Board of Directors. "In Mark Ferrer, Bill has brought in somebody with a strong background in sales and marketing to take over operational responsibilities. We are grateful for all that Bill has done for Critical Path and thankful that he is continuing his involvement as Chairman." "I'm very pleased to be joining Critical Path," said Mr. Ferrer. "I am excited by its products, services and market opportunity and am looking forward to working closely with Bill McGlashan and the entire Critical Path team."

GTSI announced that Scot T. Edwards, has joined GTSI as Chief Marketing Officer. Edwards will report to John Spotila, GTSI's President and Chief Operating Officer. "Scot comes to GTSI with an in-depth understanding of our industry, our vendors, and our customers," said Mr. Spotila. "He has implemented innovative marketing and branding programs and will help drive our new 'I Rely on GTSI' campaign. We are excited to add him to our executive team." Prior to joining GTSI, Mr. Edwards was Executive Vice President of ReturnBuy/Jabil Global Services, an asset management, supply chain management and direct marketing technology company. He has held key senior management roles at Epson America, Lexmark International, Peak Technologies, Altec Lansing Technologies, and Xyan.com. Edwards has a two-decade long history of successfully introducing new products, lines of business, developing marketing strategies, and increasing sales. "GTSI is a leader in the government market," said Edwards. "I look forward to helping the company implement a brand strategy which will highlight its successful 21 year relationship with the federal government and working closely with customers and vendors to drive new opportunities." Edwards holds a BS in Industrial Management/Marketing from Purdue University.

Network Associates announced the availability of McAfee Active VirusScan SMB Edition and McAfee Active Virus Defense SMB Edition, two integrated anti-virus protection solutions that have been designed for the channel and specifically for ease of use for small to medium businesses. The McAfee SMB Edition suites both feature McAfee ProtectionPilot, a centralized management tool that provides SMBs with a simple, proactive approach to the deployment and ongoing management of their virus protection. For most small to medium sized businesses, security is a huge challenge. With systems connected to the Internet, business can be susceptible to malicious code threats like viruses, worms, hacker attacks, spam and inappropriate content. This reality is especially difficult for smaller and medium businesses that require robust, yet manageable security but do not necessarily have the specialized knowledge to monitor, maintain and administer their system support.

"The McAfee SMB Editions provide Mercy Corps with a solution that is easy to use, easy to deploy and easy to manage -- helping to free up the burden on our IT administrators who are responsible for any number of duties to keep the organization up and running," said Errol Sigler, senior system administrator at Mercy Corps. "And since the solutions are managed by McAfee ProtectionPilot, we can ensure that our systems are constantly updated with the latest protection against malicious code threats, such as the recent Mydoom, Bagle and Netsky worms."

Antelope Technologies and Secure Communication Systems announced they have entered into a joint development and reseller venture. This joint venture will allow Secure to design, produce and sell an ultra-rugged handheld shell for Antelope's MCC. This shell will be targeted towards the military and petroleum industries. "The new ultra-tough handheld shell merged with the modular technology of the MCC opens up new computing possibilities for our current customer base," said Michael Boice, Vice President of Sales and Marketing for Secure Communication Systems. "Antelope Technologies is delivering a remarkable new way to customize computing solutions that has changed the way we look at the rugged mobile computing space." Scheduled for release in summer of 2004, the new ultra-rugged handheld shell will provide state-of-the-art technology and features. It will be water resistant, have a high tolerance to vibration and shock, and include a daylight readable touch-screen. Other features will include integrated GPS, customizable interface panels and a built-in PCMCIA card. The cost of the new ultra-rugged handheld will start at roughly $5,000. "We are extremely excited about this announcement. Secure Communication Systems has a strong tradition of providing rugged devices to the military," said Kenneth Geyer, President of Antelope Technologies. "Their knowledge and expertise coupled with our unique modular computing technology we will be able to offer these specific industries a product that allows them to bring a fully-functional computing platform into areas previously served only by under-powered PDA devices. Imagine the benefits of being able to have the power of your desktop PC with you in a remote battlefield or on a North Sea oil rig." 5G Wireless Communications said that Network Installation Corp has joined the 5G Wireless Value Added Reseller (VAR) Program. Under terms of the VAR agreement, 5G Wireless will provide its G-Force wireless broadband products and systems to Network Installation Corp. G-Force products offer campuses and Wireless Internet Service Providers exceptional capabilities, including 100% compatibility with 802.11b standard Wi-Fi cards to enable seamless roaming coverage to a 1/2 mile or more.

Additional product highlights include 360-degree coverage to over 3,000 simultaneous users, eight-to-ten-mile radius coverage to 5G Wireless CPE units and non line-of-sight technology. "Our first exposure to 5G Wireless' G-Force family changed our perception of what was possible in broadband wireless applications," stated Michael Cummings, CEO of Network Installation Corp. "This is a key marketplace that we know well. We are confident that our customers will be excited by how effectively G-Force works in real-world applications."

Frost & Sullivan has recognized Sprint's unique strategies in strengthening its market presence in the insurance industry with the 2004 Frost & Sullivan Award for Vertical Market Penetration Leadership.

InFocus announced a new Systems Integration Program and outlined its newest product portfolio designed to meet the unique needs of installation and integration resellers and customers. As a leading expert in the application, integration and networking of large format visual display technologies, InFocus provides dedicated resources and expertise to enable the success of its value added resellers, AV consultants and systems integrator partners. The new program is designed to provide partners the critical tools necessary to meet the needs of their customers more effectively, including a full line-up of InFocus and ASK Proxima® solutions, comprehensive sales support, technical product training, design assistance and application consulting. A dedicated team of experts, with over eight decades of collective experience, is available exclusively for partners participating in this program. "InFocus' goal is to provide a full offering of commercial thin displays and projectors to ensure our partners have big picture solutions for addressing a wide range of customer needs," said Scott Hix, Senior Vice President and General Manager, Americas Business Unit at InFocus Corporation. "Our strategy is to combine our innovative solutions with a team of seasoned experts dedicated exclusively to supporting InFocus valued partners who design and serve large display installations." Beyond the products and people, the InFocus Systems Integration Program offers unique benefits to resellers including a specification rebate program and an enhanced DOA policy on its installation products that is twice the length of most other competitive projector offerings. InFocus will also expand its large format display products this year with a family of commercial thin displays ranging in size from 30-70 inches for commercial applications that include retail signage, conference rooms and arenas. The commercial 61 and 70-inch displays will leverage InFocus' thin profile engine, a patent-pending proprietary engine, optical architecture and screen technology that enables rear-projection displays that are less than seven inches in depth. The thin displays will bring ease of installation in a sleek new package and provide systems integrators and customers with large display solutions that are especially suited for bright or 24 X 7 operating conditions. "Today's announcement is awesome for the ProAV market. Now the leader in portable projectors will offer a killer line-up of products, dedicated resources and programs to finally become a serious contender in the large-screen display systems integration and installation market," said Gary Kayye, Chief Visionary and Founder of Kayye Consulting. "And, now that they've got the most exciting and innovative flat-panel display on the market in a long time, this can only mean great things for the ProAV dealer." InFocus also announced today their newest wireless-ready, high-performance, entry-level installation projectors. The InFocus LP® 815 completes the family of InFocus installation projectors that includes the LP820, LP840 and LP850, while the ASK Proxima C410 joins the C420, C440 and C450 product series.

Axion Solutions announced that PeopleSoft Inc. has named Axion Solutions its top U.S. Distributor Channel Partner of 2003. Selected from an elite group of nine U.S. distributors, Axion Solutions was recognized for its outstanding performance as a channel sales partner. Axion Solutions offers the PeopleSoft® EnterpriseOne family of products, providing implementation services and support for a range of PeopleSoft EnterpriseOne applications including Human Capital Management, Financial Management, Supply Chain Management, Customer Relationship Management and Enterprise Performance Management. "Our successful distributor partnership leverages our expertise in business and technology as well as our experienced implementation team. We're pleased that this partnership has enabled us to provide our customers with one of the most innovative, reliable and easy-to-maintain integrated back-office solutions in the market. It's an honor to be recognized for this success," said Paula Milano, co-founder, Axion Solutions.

SMC Networks announced three new additions to its Barricade^TM line of secure Broadband routers: the Barricade VPN 4-Port Broadband Router (SMCBR14VPN), the Barricade VPN 8-port Broadband Router (SMCBR18VPN), and the Barricade g VPN 4-port Broadband Router/802.11g access point (SMCBR14VPN-G). Available in mid-April, these new Barricade VPN Broadband Routers carry MSRPs of $99.99, $129.99 and $179.99, respectively. Perfect for telecommuters, SMB and home users alike, the new Barricade VPN Broadband routers allow users to create secure Virtual Private Networking tunnels to share files, Internet connections and even play multicomputer games. Built-in VPN functionality allows users to create secure VPN connections over the Internet and share them with multiple computers. Ideal as the centerpiece for a small business network the Barricade VPN allows users to create secure VPN tunnel connections to a corporate network from a home or remote office location. Barricade VPN routers have both an integrated VPN Server and VPN client to support multiple VPN connections using IPSec, PPTP and L2TP protocols. Each Barricade VPN has a 10/100Mbps WAN port for use with high-speed Internet connections as well as a COM port for use with an external dial-up or ISDN modem, to employ either as the main Internet connection or as a fail-over if the broadband cable or DSL service goes down. For network protection, the routers come with an Advanced SPI Firewall to protect computers from DoS (Denial of Service) and other malicious attacks like Ping of Death, SYN Flood, Land Attacks and IP Spoofing. To complement this advanced firewall, the Barricade VPN also supports SNMP, static routing, DMZ hosting, port forwarding, system logging, e-mail alerts, and two user accounts to make management easy and flexible. The SMCBR14VPN Barricade VPN Router incorporates a 4-Port 10/100Mbps Auto-Sensing Switch to connect wired computers or additional switches, so the network grows easily; the SMCBR18VPN has an integrated 8-port 10/100 Auto-sensing switch. To incorporate wireless connectivity to the network, the SMCBR14VPN-G has 4 10/100 ports, and also 802.11g wireless access point capability, so can connect any 802.11b or g wireless device as well.

Salaries of Cisco-certified technical professionals in the U.S. are trending upward, according to the annual salary survey released this week by TCPmag.com, the leading independent Web site for Cisco professionals. Fifty-seven percent of U.S. respondents have seen increases in their annual compensation, with an average raise of $3,976 in the last 12 months. The largest boon has been enjoyed by Cisco Certified Internetworking Experts (CCIEs), who hold the company's top-tier certification. The average raise reported by the 57 percent of CCIE respondents who had received one was $9,480. Sixty-one percent of those who hold the Cisco Certified Network Associate (CCNA), the entry point for Cisco certification, report an average increase of $4,875. Overall, Cisco professionals are secure about their job prospects. Fifty-four percent say they expect their organizations to hire additional technical professionals over the next year. That's up from 40 percent in TCPmag.com's 2002 survey. However, the survey findings don't suggest that job recovery in the tech sector is a foregone conclusion. About a tenth of respondents said they've lost their jobs in the last 12 months. Only a third of those have found new employment. The average length of unemployment has lasted five months, a month longer than the average reported in the 2002 survey. "What interested us in this year's results was that salaries for specific certifications are lower than they were two years ago, when we last did this survey," said Dian Schaffhauser, editorial director and author of the report. "Yet people are upbeat about their job prospects, most have enjoyed raises recently, and most expect to pursue additional job training over the next 12 months in new areas -- with security being a major focus." This report is based on data from 689 U.S.-based Cisco professionals. Along with salary and bonus data, the survey looks at how earnings have changed in the last 12 months, the most common job benefits, expectations for hiring, and other information of use to those who possess Cisco technical certifications and to those who employ technical people. The report is available online at http://www.tcpmag.com.

iCode has appointed James ("Jim") McGowan as its new chief executive officer. With this announcement, Bijal Mehta, iCode's co-founder, assumes the position of chairman of the board, providing strategic input and overall vision into the company's long-term direction, and serving as the company's outbound emissary. Mr. McGowan's executive management experience in technology and software spans more than 30 years with a half dozen various high technology firms or divisions, achieving increasingly dramatic positive outcomes. Most recently, Mr. McGowan brought mid-market ERP software developer Infinium Software Inc. to a $7.00 per share valuation in 2002 from its below $1.00 per share market value when he joined in early 2001.

The Computing Technology Industry Association and CompUSA, announced that all CompUSA full-time instructors -- more than 200 -- will be required to earn CompTIA Certified Technical Trainer (CTT+(TM)) certification. With more than 180 locations, 600 classrooms, and 500 full and part-time instructors, CompUSA is the largest company-owned training provider in America. CompUSA offers consumer products and information technology training to consumers and small businesses, as well as to corporate, government, and education customers. "CompTIA CTT+ certification is an internationally recognized credential for technical trainers. Earning this certificate represents a milestone in the career of an instructor," said Bill Maddox, vice president of commercial sales and technology training. "Having each of our more than 200 lead instructors CompTIA CTT+ certified assures CompUSA customers across the nation of instructional professionalism, consistency, and quality." To earn CompTIA CTT+ certification, candidates must demonstrate mastery of instructional competencies that are focused on establishing and maintaining an effective learner-centered environment. The CompTIA CTT+ certification candidate must pass a proctored computer-based exam and must submit a video-based exam of an actual class. Each video exam is scored by an independent evaluation organization. "CompUSA's CTT+ initiative is an investment in the careers of its full-time lead instructors," said Gene Salois, vice president of certification, CompTIA. "This and other CompUSA career development efforts will ensure staff retention and high morale."

Texas Memory Systems said it has delivered the world's largest single installation of a solid-state disk storage system. Texas Memory System's OEM, Dynamic Solutions International, which has over 18 years of experience delivering solid-state disk solutions to the Enterprise, installed a 2.5 Terabyte Tera-RamSan at a customer site to accelerate critical database applications, metadata and to maintain a technological edge. The customer, who asked to not be identified, requires continuous and immediate access to data that can only be delivered using the latest solid-state disk technology from Texas Memory Systems. "Three recent trends in networked storage are converging to help solid-state disk storage finally gain significant traction in the mainstream datacenter," said David Freund, lead analyst for information logistics at Illuminata, Inc. in Nashua, NH . "First, new 'classes' of storage are entering the mainstream, such as Serial-ATA based storage arrays to store infrequently-accessed or archival data, freeing up more-expensive midrange and high-end storage for more-frequently accessed data. As this 'tiered' storage-class model becomes the norm, customer acceptances of another class-such as an extremely fast SSD-will become easier. "Second, storage-management products are coming to market that automatically migrate data from one storage device to another, based on customer-defined rules-a natural fit for tiered storage. Such products can also mitigate the manual data movement and tuning that's been associated with SSDs-and factored in as part of their already-high cost," Freund added. "Third, storage-virtualization products that create "logical" disk volumes-in effect, emulating disk drives as far as the attached servers are concerned and dispatching I/O transparently to physical devices on a storage network-have started shipping," Freund continued. "By hiding the physical detail of what data is being stored where, virtualization can make the use of SSDs transparent to applications."

Kashya, a leader in high-performance, cost-effective business continuity solutions, announced that it is now shipping its network-based KBX4000 data replication appliance in volume to its K-Partner channel. The KBX4000 is one of the most exciting storage technologies we have seen in some time;² said Steve Bishop, VP of Technology at storage integrator VeriStor Systems. There has clearly been a long-standing requirement for a replication solution that is platform independent, transparent to existing infrastructure, bandwidth efficient, AND cost-effective.

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RESEARCH

IT Channel Best and Worst Practices: Leverage for Success or Slide to Failure
Michael Haines, Principal Analyst, IT Services Business Services Strategies Group, Gartner, Inc.

The IT indirect channel has historically been a major route to market for many IT vendors, and channel programs, relationships and dynamics have never been more critical to the success of many of these companies. In light of the economic challenges of the past three years and the slowdown in the IT market, the concept of partner leverage has become critical to the success of the go-to-market strategy of IT vendors and their partners. For many, the ability to leverage takes its shape in the form of an effective channel program.

The channel has also been a key provider of product and service fulfillment for many users, particularly small and medium sized businesses (SMBs). Economic challenges have increased the reliance that many users have on channel companies (VARs, Solution Providers, Systems Integrators, and ISVs) for advice and procurement of the most appropriate and cost-effective technologies and associated services and solutions for their businesses.

IT Vendors must build loyalty with their channel partners and optimize the effectiveness of these programs, as the channel is often their most viable method to capture and support important, but diverse, markets. These include both select geographic and vertical markets, as well as the SMB market. Simultaneously, channel companies must continue to develop the value-add they offer to their clients. They must build on traditional differentiators such as proximity, expertise, relationships and reach, in order to maintain the mind share of enterprises in the face of increasingly attractive direct channels to market.

As a result of the increased focus on channels, a number of both best and worst channel program practices have emerged from both vendors and channel partners. World-class channel programs will exhibit many of the best practices, while avoiding or eliminating the worst practices.

Leading IT Channel Best and Worst Practices
For IT vendors, the elements and practices of channel programs fall into four general categories:

• Program Organization and Management Policies (see example below)
• Marketing and Business Development Campaigns
• Measurement and Compensation
• Understanding the Wants and Needs of the Channel community.

Within each are a set of best and worst practices that are regularly exhibited by both IT vendors and channel partners. For most IT vendors and channel companies, the marketplace demands that if they are to thrive (let alone survive), they must successfully leverage the efforts of other IT companies for the sale of their offerings. However, the history of channel initiatives in the IT industry is fraught with inconsistency and conflict. IT vendors and channel companies must strive to master partnering best practices if they are to remain competitive and capture the optimal market opportunity available to them. For a deeper look at this issue, logon to www.gartner.com and search for the Gartner Spotlight titled "Best and Worst Practices for IT Channel Programs", Document Number AV-21-8512, Published December 19, 2003.

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Gartner: Spam Filtering to see Dramatic Growth

The enterprise spam-filtering industry will experience a dramatic vendor consolidation through the first quarter of 2005, according to Gartner, Inc., the technology and consulting firm. Gartner estimates that of the approximately 40 vendors currently offering spam-filtering products or services for enterprise customers, fewer than 10 will be operating by the end of this year. In the next nine months, most vendor-competitive positions will change significantly in this immature industry because of rapid changes in market dynamics. In part, Gartner analysts concluded, this is because many vendors have been unable to deliver best-of-breed functionality that is needed to fight spam. Those that do typically are small, new companies with a limited track record. Meanwhile, established vendors in markets such as antivirus, Web filtering or firewall are investing in spam-filtering, but so far have not met enterprise requirements. "Enterprises require sophisticated detection engines that are constantly updated," said Arabella Hallawell, research director at Gartner. "If a solution blocks legitimate business e-mail, or is too restrictive or inflexible for an enterprise culture, it's not viable. If the spam-filtering solution requires a team of administrators or heavy end-user involvement to administer and update, then it's not practical either. The strength of a spam-filtering vendor's solutions detection and management functionalities is the most important factor to consider when choosing a vendor." Gartner clients report that 60 percent to 75 percent of incoming e-mail is spam. Once a nuisance and storage-cost drain, spam is now a major transmitter of malicious code and fraud. "While many enterprise spam-filtering vendors will be gone or will refocus their technologies elsewhere by the end of this year, enterprises can't afford to delay decisions until the market shakes out," said Maurene Caplan Grey, research director at Gartner. "Their problems with spam have become too enormous." While there are questions over any vendor's future viability in this market, Hallawell said enterprises can take some steps to protect themselves before making selection decisions and signing contracts. For example, companies should request protection clauses in the event a vendor is acquired. Shorter-term contracts also are preferable. "Companies must consider a vendor's core business fundamentals," Hallawell said. "A quality-installed base also indicates sufficient strength to mitigate short-term vendor risks." Gartner analysts have identified vendors best positioned to lead the enterprise spam-filtering industry. Vendors offering software, appliances and managed services providing boundary (Internet-SMTP level) solutions were evaluated. The results from this spam-filtering evaluation are available in the Gartner Research Note "Magic Quadrant for Enterprise Spam Filtering, 1Q04." The Research Note lists vendors in categories such as Leaders, Challengers, Visionaries and Niche Players, based on their ability to execute and their completeness of vision. The document is available on Gartner's Web site at http://www3.gartner.com.

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Gartner: The Shift from Strategic to Tactical

The business priorities among senior executives worldwide are changing from strategic to more tactical as the economic situation improves, according to a joint survey by GartnerG2 and Forbes.com. GartnerG2 and Forbes.com conducted a global survey among 462 senior business executives from large companies (1,000 or more employees) in December 2003 and January 2004 to identify the most important business issues for 2004. GartnerG2 and Forbes.com have conducted this survey on an annual basis since 2002. The survey results reflect the conflicting pressures of finding growth in a worldwide competitive business environment. Top-line growth as a priority is clear -- attracting and retaining customers remains the top-rated issue, growing market share moved up to the fourth-rated issue this year from eighth last year, and improving speed to market experienced the largest overall increase in importance. However, the second- and third-rated issues of improving productivity and cutting costs reflect that businesses remain under immediate pressure to improve the bottom line. Longer-term issues, such as designing strategy and focusing on core competencies, experienced some of the biggest drops in importance. "Strategy has taken a back seat to the immediate need to show top and bottom line growth as the economic environment has improved," said Neil MacDonald, group vice president for GartnerG2. "Executives are focusing on how to build a flexible and responsive organization to more quickly detect and respond to market opportunities."

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COMMUNITY

Q&A with Corel's Samantha Azar, Marketing Manager, VAR

What are the key offerings you are promoting?

• 3 packs (WordPerfect Productivity Packs v.11 & CorelDRAW Essentials)
• Software Bundles: Education Solution Packs (Academic Specific)
• Corel Channel Partner Program Benefits: http://apps.corel.com/partner_programs/channel.html
• Affordable, award-winning products WordPerfect Office & CorelDRAW Graphics Suite
• 3 exciting new product launches for 2004
• Great sales incentives
• Up to 80% off NFR's
• Corel.com Advertising
• Free Technical and free Training Support
• Toll Free Sales Support 1-877-VAR-HELP (1-877-827-4357)
• Online Product Training: https://corelevents.webex.com/corelevents
• Comprehensive On-line Resource 24/7 www.corelconnected.com

What are your key messages here at VAR Vision?

• Dedicated to supporting the VAR channel through Distribution & directly from Corel
• Have people, programs, products, support & service in place to help you grow your Corel SMB business

What are your overall channel goals?

• To work directly with VARs that target the SMB space (Legal, Education, Government, Designers; Professional, Technical, Engineers) and help them increase their Corel sales potential)
• Co-market with VARs (via eSeminars, Direct Mail, call campaigns, 3-way conference calls to maximize revenue opportunities in the SMB market space)
• Have VARs update their partner status on www.corelconnected.com!

How can the channel benefit by working closer with you?

• Great Margins to be made on Corel Products (WordPerfect Office, CorelDRAW Graphics Suite, Painter, OEM 3 packs, Education Creative Solution Packs.)
• Lower Cost of Ownership in Selling Corel Products
• Free Site License
• Free Technical Support
• Incentive Programs
• Increased Revenue Potential in Selling Total Solution
• Corel Software + Hardware + Training + Support = great margins on our software
• SMB Statistics to Better Position Your Business

How can partners learn more/do more with you?

• Call 1-877-VAR-HELP (1-877-827-4357)
• Email us partnerprogram@corel.com
• Visit www.corelconnected.com to update your Corel Channel Partner Status
• Attend our upcoming VAR training sessions: https://corelevents.webex.com/corelevents
• Have your customers attend Corel training: https://corelevents.webex.com/corelevents

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The Outsourcing Business-Is it Right for You?
Sridhar Ramanathan, Pacifica Group

If you run a channel business, you're probably asking yourself, "should we get into the outsourcing business?" Gartner Group estimates that midsize business spending on IT management services will exceed $15 billion by 2006. Some of the hottest segments include: call center operations, software development and QA, manufacturing, product design, and telesales. If you're responsible for top line growth, you can't afford not to take a hard look.

As the former Marketing exec for HP's Outsourcing Services business unit, I have a few lessons to pass on to you from my tenure. The first point is to understand why companies outsource. The principal drivers for the mid-market are to: focus on core competency, gain time-to-market by buying rather than building wherever possible, to reduce cost, and to increase operational efficiency. Chances are that your own customers are asking you for an outsourced option. Some of you are already down this path. But are you chasing a deal or entering a business? This article offers some criteria for proactively assessing the business opportunity.

Let's also distinguish outsourcing from support services. Outsourcing is typically a long term business relationship with a company that handles a business process or function. Outsourcers provide ongoing operational responsibility not just the design/build phase arising from a software purchase. Outsourcing is the most intimate business relationship imaginable. There is a true sense of shared success and failure. Here's a quick overview of outsourcing pros and cons from both sides of the relationship.

	Customer Perspective	Outsourcer Perspective
Pros	Time-to-market; buying is faster than building Cost reduction Leverage expertise Competition is doing it Move big ticket asset purchases off the balance sheet to expense Scale; grow the business without scaling costs commensurately	Recurring/predictable revenue and reduced selling costs due to 2-10 year contract terms Add more value to customers and command a bigger share of your customer's wallet Keep competition at bay High switching costs could yield higher margins
Cons	Cost savings may not meet your expectations; expensive change orders arising from service levels can account for a huge fraction of the bill Service levels might not meet expectations Switching outsourcers is painful; divorces can be ugly	Can become a big diversion from current business model Balancing operational efficiency with customer relationship can be tough; most channel business emphasize volume not maximizing customer value Potentially large capital and human resources to build up capability Exiting bad business is painful

So if you're considering offering an outsourced option, use these four criteria to see if it makes good business sense for you:

1.	Can we make money? Leading IT outsourcers make over 40% gross margin on multi-year contracts. Will you have the operational efficiencies, cost advantages, process maturity, and scale to make it in the business? Remember, the key to making money in outsourcing is driving down costs (labor, capital, software, etc.) while delivering flawlessly against service levels so you can collect annuity revenue.
2.	Can we deliver? Outsourcing is a very different business model than traditional VAR, SI and reseller models which emphasize high volume transactions over deep customer relationships. Remember, you're actually running part of your customer's business on a daily basis. Customers will escalate to the CEO in a nano-second if something breaks. Think carefully about how well your team can deliver against tightly specified service level agreements. And do you have enough instrumentation to proactively avoid disasters?
3.	Is the risk/reward ratio good enough? Most channel companies are allured by big deals with juicy contract values. Outsourcing relationships are all about managing risk. Industry leaders are artful at quantifying risk and pricing it into the contract directly.
4.	Does it fit with our strategy? Becoming an outsourcer puts big demands on your company's execution. You will likely need a separate organization including sales specialists, pursuit teams, delivery/operations, finance, contracts, and HR. Again, are you willing to institute the discipline, rigorous processes, and organizational metrics to reward the right behaviors? Let's also not forget the big cultural shift from maximizing volume with many customers to maximizing value with a few.

Outsourcing can be a very rewarding business strategy for your company when it's done for the right reasons and with the right team to execute. I promise you that you will be a trusted partner to your customers with ensuing limitless growth possibilities. It's no wonder that everyone is jumping on the bandwagon. But how many will stay on the wagon long term?

Sridhar Ramanathan is founder of the Pacifica Group, a management consultancy specializing in strategies and tactics to drive revenue growth. He can be reached at (650) 355-9700 or sridhar@pacifica-group.com

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Tablet PC Update

Leszynski Group, Inc., a recognized leader in customized solutions for the Tablet PC, announced today an agreement with Microsoft, Gateway Professional, and Motion Computing to jointly present a series of free educational seminars featuring the Tablet PC. The seminar series is titled 'Mobile Computing with the Tablet PC and travels to twelve US cities from April through June (www.tabletpctraining.com/gateway). Under the inDepth™ Training brand, Leszynski Group produces a variety of unique events for the Tablet PC to showcase its features, benefits, and use cases. These events educate technical and business decision-makers in business enterprises and government agencies so they can make informed decisions about defining and adopting a mobile solutions strategy. During the events, real-world examples demonstrate how the Tablet PC empowers mobile information workers with increased productivity and more flexible workflows, whether sitting in a sales meeting, working aboard an airplane, or collecting data in the field. Attendees have the opportunity to talk one-on-one with solution providers and to experience the Tablet PC personally in a hands-on training session.

Afternoon clinics provide deeper understanding of industry solutions, including how to convert paper forms to digital forms. Other afternoon classes provide instruction in the latest software solutions that support mobile computing, such as Microsoft InfoPath and SharePoint for collecting and sharing information. Amber Kinney, InfoPath Product Manager for Microsoft, says: "In these events, Leszynski Group clearly demonstrates that using InfoPath forms on the Tablet PC is a natural and effective business process with rapid return on investment." Gateway, the only top-tier PC vendor with both a slate and a convertible Tablet PC, relies on its phone, website, and direct sales force channels to deploy and support Tablet PC technology. "Gateway views the Tablet PC platform as soon becoming a standard way of computing, extending well beyond niche markets," said Armelle Carlier, Director of Marketing. "As this transition takes place, it will become increasingly important to educate customers on the varied applications and uses for the platform."

Bernie Day, Vice President of Marketing for Leszynski Group and Director of Leszynski inDepth Training, reinforces Gateway's comments: "Staying educated about the latest innovations in technologies is the best way for people to become more efficient and effective at work."

"Motion is working closely with its partners, Microsoft and Gateway, to bring a valuable and educational Tablet PC experience to those responsible for making computing and wireless communications decisions for mobile professionals," said Debbie Crosek, Director of Marketing, Motion Computing. Leszynski Group began delivering inDepth Training seminars throughout the United States in 2003. Previous sponsors include Intel, Acer, ScanSoft, Adesso Systems, Mindjet, and Design Universe. In addition to seminars, Leszynski Group provides hands-on Tablet PC education at industry events in Tablet PC pavilions, clinics for end-users, and training for developers onsite and in public classes.

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Top-Selling Software Week of March 28 – April 3, 2004
Business
1	MS Office 2003 Student/Teacher Ed	Microsoft	$146
2	QuickBooks 2004 Pro	Intuit	$265
3	AD Guard	Valusoft (THQ)	$20
4	QuickBooks 2004	Intuit	$199
5	MS Office XP Student & Teacher Ed Acad	Microsoft	$130
6	Norton AntiSpam 2004	Symantec	$40
7	MS Office 2003 Pro Upgr	Microsoft	$297
8	Pop-Up AD Blocker JC	Cosmi	$10
9	Pop-up Stopper Companion 3.0	Panicware	$30
10	Act! 6.0	Interact Commerce	$211
List is based on units sold by twenty-three channel partners. For more information, please contact The NPD Group at (703) 376-6226.

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