ChannelMedia Retail Edition Your source for channel news and research
July 22, 2004   
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Q&A with Black Box's Rick Suminski, Corporate Director - National Services

Update - System Builder Summit & VARVision is Fast Approaching
By ChannelMedia Staff


Channel Digest
By ChannelMedia Staff


Q&A with John Koury
Vice President, Channel Marketing, EMC Corporation

SMB Buying Trends

WLANs Meet Hackers

Service Provider Satisfaction

Reseller Opportunities Abound - Financial Services
By Jill Kerr


Finding Global Sales Partners Requires Global Thinking & Strong Strategic Alliances
By G. A. "Andy" Marken


Top Selling Business Software
By NPD Group


 
 
 

 

NEWS

Q&A with Black Box's Rick Suminski,
Corporate Director - National Services

Black Box specializes in design, installation, and maintenance of wired, wireless, and hybrid networks. Covering the globe with 117 offices serving 132 countries on 5 continents, Black Box helps clients of all sizes-with one site or multiple sites-worldwide. To learn more about Black Box Network Services, we sat down with Richard Suminski, Corporate Director - National Services

Q. Rick, tell us more about how Black Box provides these services and products.
A. Worldwide technical proficiency is what defines Black Box. Our on-site experts are available whenever and wherever clients need them for everything from MACs (moves/adds/changes) to a system upgrade to an entirely new installation. They have the most certifications in the industry, and we guarantee our work as well as our products. Clients can also rely on our free 24/7/365 hotline Tech Support, which answers all calls in 20 seconds or less-to address technical issues efficiently and consistently. We also offer more than 90,000 products in our award-winning catalog and on the Web. If clients can't find what they need, we find it or build it for them.

Q. What does One Source mean to your clients?
A. Before Black Box offered its One Source solution, the infrastructure market was very fragmented and was serviced by small providers who couldn't provide a complete solution. We changed that with our One Source approach, which means clients come to us for both services and products instead of going to many different suppliers. This saves clients both time and money. Also because of our large geographic footprint, we can ensure site-to-site consistency and the same high quality around the world. This is very important to many clients-especially those with multiple sites-and sets us apart from the competition.

Q. What new services will we be seeing from Black Box in the future?
A. We're certainly looking for new services and products that enhance our offerings, but ultimately our clients tell us what our next offering will be. Our technical experts interact with them every day, so if there's something clients need that we're not providing, we find out very quickly. We also attend industry showcase events to search for new products. If a company wants to present us with a new product, simply call Jim Schriver at 724-746-5500.

Q. What percentage of Black Box business are services vs. product sales and how does that fit with your goal?
A. Currently our business is split relatively equally between services and products and we are quite happy with that mix as it validates our One Source philosophy.

Q. Where does Black Box go from here?
A. Today we are the largest infrastructure services provider. And we believe we are poised to capture significant market share going forward. Since 1976, clients have relied on Black Box. We're very proud of that and we'll continue to provide the world-class data, voice, and hotline services and products that keep our customers coming back again and again. Our One Source approach gives our clients the highest-quality services and products, and it provides a value-add that is unmatched in the industry.




Update: VARVision and System Builder Summit is Fast Approaching
By ChannelMedia Staff

Q. Where are North America's Leading Resellers Going to Do Business this Fall?
A. At the Premier IT Channel Events ... Same as Always...

System Builder Summit™ & VARVision®
September 26-29, 2004
The Westin Kierland Resort & Spa
Scottsdale, Arizona

Meet an invited, executive-level audience you won't find at a trade show
Too many trade shows deliver too many unqualified attendees. The density of qualified buyers is often low. And finding the right buyers, even if they're there, is a hit-or-miss proposition. At System Builder Summit and VARVision, every System Builder and VAR is pre-qualified and attends by invitation only. System Builders average 1,500 systems a month and represent 40% of the White Box market. VAR Decision-Makers represent $20 - $100 million in annual sales and partner with companies with 100-1,000 employees.

Do business in a format that gives you more face-to-face meeting time
At a typical trade show, exhibitors stand in their booth and wait for the buyers to come to them. In-depth meeting time is unstructured and often impossible. At System Builder Summit and VARVision, Vendors hold daily meetings with targeted groups of System Builders or VARs.

Private boardroom appointments
Discuss specific partnering opportunities with numerous daily One-on-One meetings you can pre-schedule online or set up on-site. Continue the relationship building with high-end, structured networking events that give you valuable access to every attending System Builder and VAR.

Be part of events that are 100% focused and relevant
Too many trade shows, like Comdex, try to be everything to everyone. The result for both exhibitors and attendees is a lack of focus, relevance and business value. System Builder Summit and VARVision are laser-focused on building profitable partnerships in the white box and value-added channels. Vendor ROI is built into every part of the Event agenda. Gartner analysts drive the content at every Event with the most current and relevant insights on channel issues, trends and market forecasts. Every Vendor also has the opportunity for a One-on-One meeting with a Gartner analyst to discuss your specific market challenges and opportunities.

Bottom line: You get more ROI and more business done at System Builder Summit and VARVision because these industry-leading Events aren't tradeshows. They are business-focused programs that deliver the high-level audience you want and the ROI you need.





Channel Digest
By ChannelMedia Staff

McAfee announced the appointment of David Roberts as the senior vice president of North America channels. In his role, Roberts will be responsible for execution of the North American channel program for the company. This appointment solidifies McAfee's continued commitment to its business partners and its dedication to becoming a 100 percent channel-focused organization. Roberts brings over 15 years of channel and direct sales experience to McAfee. Most recently, Roberts was executive vice president of enterprise sales and professional services at Corel Corporation, where he was responsible for restructuring the business to focus on channel sales and corporate accounts and returning the company to profitability. Prior to Corel, Roberts held various executive positions at Microsoft Corporation, including general manager of global accounts for the Americas and Asia and senior director of global partners. During his tenure with Microsoft, Roberts developed sales strategies for Microsoft's 40 largest customers and built the channel infrastructure to support and grow these accounts through reseller, distribution and integrator programs, revenue sharing policies and compensation programs. Roberts began his career at General Dynamics and NEC Corporation, respectively. "As the new McAfee, we are re-aligning our entire company to focus on our commitment to the channel," said James Lewandowski, executive vice president of sales for the Americas for McAfee, Inc. "David Roberts' leadership skills, broad understanding of the partner community and experience in implementing successful channel programs will be invaluable as we continue to transition into a business completely focused on delivering security through the channel." "My decision to join McAfee, was driven by the dedicated channel focus exhibited by the executive management team," said Roberts. "The increased investment is evidenced by the recent launch of the McAfee SecurityAlliance(TM) partner program, which is designed to enable partners with training, certification, marketing programs and incentives through a solid partner relationship management implementation."

Westcon Group, Inc., a global specialty distributor of networking and communications technology products, announced the official opening of a 78,880 square foot warehousing and integration facility in Sterling, VA. The warehouse currently fulfills all United States-based orders for Westcon Group's Voda One, Comstor and Westcon divisions. Westcon Group has consolidated its three former eastern warehouses into this new facility, which includes a 5,000 square foot area providing capabilities for Avaya channel assembly and integration for Cisco, Nortel and many other vendors. The building is adjacent to the freight entrance at Dulles International Airport and handles all orders for Voda One, Comstor and Westcon. Bernie Kelley, vice president, operations for Westcon Group North America, Inc., commented: "By centralizing Westcon Group's east coast warehousing operations into one strategic location, we are able to run a high-volume channel assembly and integration operation for each of the product lines we carry. Since many of our networking solutions are built around an integrated, multi-vendor concept, this new facility is an ideal environment for staging and integration of different components, whether they are convergence, security or IP device-related." Tom Ayers, senior vice president, Blue Coat Systems, added: "Westcon Group's new warehouse is a perfect example of how the company is able to extend value in the supply chain and augment our own company's capabilities. By creating a multi-purpose environment where specialized technicians and other personnel can handle all aspects of staging, integration, assembly and shipment for multiple vendors, the company makes it easier for resellers and integrators to serve their customers, and makes the channel a much more attractive means of distribution." Bill Corbin, CEO of Irvine, CA-based Network Catalyst, Inc., added: "For Network Catalyst it boils down to efficiency and reliability. Westcon Group is well known for its integration and logistics services and capabilities. Centralizing these capabilities on a regional basis is a great step forward."

Two of the world's leading Microsoft® Business Solutions providers - ePartners and EYT - announced today that they are merging, creating the dominate provider of Microsoft Business Solutions in North America. ePartners, the largest North American Microsoft Business Solutions technology company and EYT, formerly Ernst and Young Technologies, one of the top five North American Microsoft Business Solutions companies combine with an operational footprint of 28 offices from coast to coast. The merger accelerates both organizations' go-to-market strategies including Client Service Delivery Excellence and vertical market offerings. The combined company will operate as ePartners. Dan Duffy, CEO of ePartners, will continue as CEO. Howard S. Diamond, CEO and Chairman of EYT, will assume responsibility as Executive Chairman and Chairman of the Board for ePartners. "This is truly an exciting time for ePartners," said Dan Duffy, CEO of ePartners. "The merger of these two outstanding organizations is great for our employees, clients and Microsoft. The new organization has wider geographic reach, a greater IP offering and enhanced vertical market expertise. The combined companies extend our reach into the Microsoft organization bringing our clients unprecedented expertise and access to the Microsoft solutions offering." ePartners will employ over 400 staff, including 220 solution consultants. The company will be headquartered in Seattle, WA, with 29 total offices, including one in London. "This is yet another great step for both organizations," said Howard Diamond, Executive Chairman of ePartners, "We are creating a new force in the industry with the capital, size, scope and talent to impact the market in a massive way. The quality and breadth of our combined teams will allow us to deliver unmatched value to our clients and Microsoft." "The combination of ePartners and EYT will expand the delivery and support of business applications for customers throughout North America and Europe," said Dan English, General Manager, US Microsoft Business Solutions. "This experienced team, offering Microsoft Business Solutions will help companies realize new opportunities, while enabling them to increase efficiency and improve customer service. We congratulate the new ePartners on its success."

The Applied Management Sciences Institute (AMSI) announced today its collaboration with Dr. David Palumbo of Cambridge, Mass.-based Sapient, a leading business consulting and technology services firm, to produce the book Guidelines for Excellence(R) in Training and Education. AMSI Press will publish the book, one of the initial volumes in AMSI's Guidelines for Excellence(R) Series, in Spring 2005. Palumbo, who is vice president of Sapient's Learning Services practice, will serve as executive editor, along with William Lidwell, president of AMSI. Guidelines for Excellence in Training and Education is the first book of its kind to incorporate contributions from numerous academics, researchers, and practitioners in public education, higher education, and corporate training. Through case studies, project examples and strategies, the book will provide practitioners with practical, research-based guidelines for achieving the highest caliber of training and education initiatives. In his role as Guidelines editor, Palumbo will draw upon his experiences at Sapient helping Global 2000 companies develop and implement enterprise learning solutions to drive productivity and achieve a maximum return on their investments in learning. "While much effort has been put into understanding how people think and learn, to date no one has succeeded in effectively translating this understanding into clear, actionable language that practitioners can apply themselves," said Palumbo.

PowerByHand, the premier provider of mobile content and solutions, and palmOne, Inc. recently launched the palmOne eBook store, with content provided by PowerByHand's eReader.com, the world's largest and most popular electronic bookstore. palmOne currently provides its customers with access to PowerByHand's award-winning eReader (formerly Palm Reader(TM)) in the box with most palmOne(TM) devices. Visitors to the new eBook store can choose from more than 13,000 popular eBook titles in more than 40 categories, including bestsellers and new releases, such as "The Da Vinci Code" by Dan Brown, a publication of Doubleday and a division of Random House, "My Life" by Bill Clinton, published by the Knopf division of Random House, and Stephen King's "Song of Susannah: The Dark Tower VI," published by Simon & Schuster. The popularity of eBooks is growing at a rapid pace. The Open eBook Forum (OeBF) recently reported that eBooks are the fastest-growing segment of the publishing industry. The OeBF also reported that the number of eBooks sold increased by about 130,000 from the first quarter of 2003, from 288,440 to 421,955 eBooks sold, representing an increase of 46 percent. "We are committed to providing our customers with a rich content selection for their palmOne devices, including access to the widest selection of eBooks available," said John Hartnett, palmOne's vice president of eCommerce, Sales Development and Accessories business. "PowerByHand's eReader.com is the leader in the eBook industry, and choosing their catalog for our store gives palmOne customers the ability to enhance their device experience and enjoy the mobility and flexibility that electronic reading provides." "We are thrilled that palmOne, the world's premier manufacturer of Palm OS devices, has turned to us to provide its online eBook store," said Larry Wallace, vice president of business development, OS and Licensees at PowerByHand. "By working together, we can introduce palmOne customers to new possibilities for their devices through the rich experience of eReading."

Nortec, a leading provider of outsourced computing solutions, today announced it has been selected as Microsoft's 2004 National Partner of the Year. Nortec received the award given to a Microsoft Gold Certified Partner for garnering successful revenue and demonstrating superb commitment to partner initiatives and an understanding of the Microsoft Partner Program competency development. Presented at the Microsoft Channel Partner Summit, Microsoft inaugurated the award program this year to acknowledge exceptional achievement by members of its Microsoft Partner Program. "We are honored that Nortec has been selected as the first recipient of this national award for outstanding performance by a Microsoft VAR partner. This recognition is a testament to the commitment that is prevalent at every level within the Nortec organization and the dedication of our employees. I truly appreciate their unwavering commitment and hard work," said Andrew Grose, CEO of Nortec. "Nortec strives to achieve superior results for all of our customers. We plan to continue to develop our service specialties and maintain our leadership position with Microsoft solutions." Microsoft VAR Partners of the Year have demonstrated commitment, proven expertise in growth, strategic counsel, and competitive wins to deliver one or more specialized areas of Microsoft technologies. Nortec is a Microsoft Gold Certified Partner with a specialty in Advanced Infrastructure Solutions Competency for enterprise systems. "We are delighted to honor Nortec for its commitment and proven effectiveness in providing high-quality services to our mutual customers," said Margo Day, Microsoft Corporation's vice president, U.S. partners. "They have enabled companies to target new opportunities, increase efficiency and improve customer service. We congratulate Nortec on its success."

Answerthink announced a Sarbanes-Oxley Compliance Service designed to help companies meet the internal control requirements of Sarbanes-Oxley and concurrently improve business performance through the use of proven best practices from The Hackett Group, a business advisory firm and an Answerthink company. Through the use of Answerthink's Best Practices Implementation (BPI) approach and tools, the service helps accelerate compliance efforts while allowing clients to pursue a return on their Sarbanes-Oxley investment. The service helps companies evaluate business processes, technology, and ERP systems, and make changes to improve their ability to support internal controls required by Section 404 of the Sarbanes-Oxley Act. Answerthink's Sarbanes-Oxley Compliance Service is an extension of the company's recent work supporting Sarbanes-Oxley compliance efforts at leading companies in a wide range of industries, including insurance, retail, hospitality, transportation, and energy According to Hackett's 2004 Finance Book of Numbers research, spending on compliance has slowed a decade-long trend towards lower finance costs. An analysis of data from Hackett's recent finance benchmark clients found that month-end closing cycles have also increased for the first time in recent years and it now takes 5.5 days for median companies to close their books, up from 5.2 days a year ago. "Clearly, most companies are making significant resource investments to respond to the requirements of Sarbanes-Oxley. World-class companies are looking beyond compliance and are using their Sarbanes-Oxley investment as an opportunity to also create efficient internal controls environments and further optimize business processes to create competitive advantage. This is something that Answerthink, with our ability to leverage Hackett-certified best practices combined with our strong IT knowledge, is uniquely qualified to provide," said Answerthink Chairman and CEO Ted A. Fernandez. According to Answerthink Managing Director Grant Fitzwilliam, "Only Answerthink comes to the table with extensive business process expertise, unique intellectual capital from Hackett's database, and the tools, approach, and experience to implement proven best practices in leading software packages. This is a powerful combination that enables us to dramatically accelerate compliance efforts while also lowering the ongoing cost of controls."

IKON Office Solutions announced the completion of its transaction with GE Commercial Finance for its Canadian leasing business, which was announced on March 31, 2004. As part of the transaction, and subject to certain post-closing adjustments, IKON will sell certain assets, and GE will assume certain obligations, relating to IKON's leasing operations in Canada for approximately CDN$215 million in gross proceeds. IKON has also entered into a Program Agreement with GE Commercial Finance for the funding and servicing of IKON's lease originations in Canada. A portion of the proceeds from the transaction will be used to pay down the Company's Canadian lease-supported debt, totaling approximately CDN$85 million. GE Commercial Finance is now the Company's preferred lease-financing source in North America, building on the early success of a similar transaction in the U.S. completed earlier this year, and will operate IKON's lease financing program in the U.S. and Canada under the name IKON Financial Services(SM). Like the U.S. transaction, IKON will receive an origination fee of three percent on all new lease originations funded by GE in Canada. "The dedication of a world-class financial services company such as GE Commercial Finance brings great value to IKON, our customers and our shareholders," stated Matthew J. Espe, Chairman and Chief Executive Officer, IKON Office Solutions. "This transaction furthers IKON's financial flexibility, operating performance, and future growth opportunities as the pre-eminent channel for document management solutions and services in the world.

WYNIT will begin offering products manufactured by Rimage, one of the world's leading providers of CD-R/DVD-R publishing systems for business applications to the WYNIT sales channel. "We are pleased to have Rimage join the family of companies we represent and to have the ability to offer their products to our resellers coast-to-coast," noted Pete Richichi, WYNIT's Vice President Sales and Marketing. Rimage designs and manufactures on-demand publishing and duplication systems for software distribution, information publishing, digital archival, and multi-media development. These systems provide turnkey premastering, recording and surface printing on CD-R and DVD-R media. WYNIT will distribute the Desktop family line of products that offers customers an affordable, out-of-the-box ready digital printing and publishing solution ideally suited for the office environment. "Rimage is known worldwide for its integrated CD and DVD publishing systems that are required for producing discs with customized digital content on an on-demand basis. We are very familiar with the publishing solutions for the desktop markets. Rimage sees our relationship as an opportunity to produce incremental sales in the Desktop product segment," Richichi said.

ScanSource, Inc. (Nasdaq: SCSC), a leading value-added distributor of AIDC (automatic identification and data capture), point of sale and telephony products for the reseller market, today announced that sales results for its fourth fiscal quarter ended June 30, 2004 are expected to be in a range of $328 - $338 million compared to $253.0 million for the same period one year ago. Today's release reflects ScanSource's normal reporting practice whereby quarterly sales results are disclosed in a release at a practicable date soon after quarter-end.

CyberGuard unveiled an exclusive ONE partner program designed to unite the company with its channel by actively engaging and driving new business to their resellers. "We chose the name 'ONE' because we view the channel as a means of extending our sales force, not as a separate entity," explains Bryan Bain, CyberGuard vice president for worldwide marketing. The program has been constructed to engage, energize and reward channel partners, tying different incentives to performance. Channel partners will qualify for one of four segments within the ONE partner program based on their level of participation. Each tier identifies volume commitments, marketing strategy alignment and training requirements that partners must satisfy each quarter. "For ONE to be of value to our business partners, not all existing resellers will qualify," adds Bain. "CyberGuard holds an elite position in the information security market. The company is known for delivering unparalleled levels of security, technical expertise and a keen attention to customers' needs. ONE participants will have to be equally committed to protecting that brand." The ONE partner program delivers unique and tangible value because it subsidizes channel development, protects their investment with hard segmentation and engages the most committed partners as members of CyberGuard's advisory board. "This is the only program that enables a reseller to actively plan and manage their business in partnership with the vendor," Bain said. ONE integrates existing channel partners from all three CyberGuard divisions into a singular program with clearly defined elements for all partners.

Insight Enterprises announced the "IPO" of 13,910,219 shares of common stock of its operating segment, PlusNet of the London Stock Exchange (Symbol PNT). Trading in PlusNet shares is expected to start on AIM on July 14, 2004, subject to the conditions in the underwriting agreement being satisfied. The public offering price is 0.90 pounds (approximately $1.67) per share. The initial public offering includes 11,111,111 shares sold by Insight Enterprises resulting in expected gross proceeds to Insight Enterprises of 10.0 million pounds (approximately $18.6 million) and reducing the company's holding of PlusNet to approximately 45%. PlusNet's market value, based on the public offering price, is 25.1 million pounds (approximately $46.7 million). As a result of the sale of the company's shares, the investment in PlusNet starting in Q3 2004 will be accounted for under the equity method until the company's ownership is less than 20%. Robert W. Baird acted as financial advisor, underwriter and broker to PlusNet.

CDW Government, Inc, the government and education subsidiary of CDW Corp. announced that Imran Abbas and David Lanexang, both solutions architects within the company's Technology Sales team, are certified Cisco Certified Internet Experts (CCIE), achieving the highest level of certification in the networking field. CDW Corporation recently achieved Premier Certification from Cisco Systems, Inc., having met stringent requirements related to technical training and customer support capabilities on Cisco products. The CCIE program trains technical experts with the skills and experience to handle today's most challenging technology assignments and sets the standard for internetworking expertise. "CDW-G provides added value to its customers through the ability to design and implement complex IT solutions from an in-house solution engineering staff," said Ken Grimsley, CDW-G vice president of strategic sales. "The combined experience and diverse technical expertise CDW-G maintains enables us to provide superior customer service and support to IT executives and their staffs." Mr. Lanexang and Mr. Abbas led and deployed 1,500 Cisco Internet Protocol (IP) phones for the Federal Trade Commission (FTC), enabling the agency to improve the capabilities of its phone systems and overall agency communications. By converting the FTC's PBX phone system to Cisco IP phones, the agency will be better able to expand and modify its existing system rather than switch to a new one to meet future growth requirements. The IP system also affords the FTC the flexibility to make system administrative changes easily due to its web-enabled interface. A feature popular with IP phones is the unified messaging capability, allowing users to listen to their voicemail as well as their email, keeping them constantly connected. CDW-G's Technical Sales team specializes in security, wireless, and IP telephony solutions and provides IP telephony design and implementation, security solutions design and implementation, LAN/WAN design and implementation, onsite enterprise customer support, and pre-sales solutions consulting services.

Cognizant has joined Microsoft Corp's Mainframe Migration Alliance to help legacy customers seamlessly migrate critical data and systems to Microsoft .NET-based systems. Under the agreement, Cognizant becomes one of the early members of Microsoft's Mainframe Migration Alliance. MMA brings together technology and system integrators to move applications in aging legacy environments to the more modern and flexible Microsoft Windows Server platform and Microsoft .NET. The lower-cost Microsoft platform is reliable, scalable, and easier to administer than legacy systems. "Our alliance with Cognizant provides a comprehensive response to enterprises seeking to streamline their technology infrastructure, align their technology investments with changing business priorities, and have a robust platform for extending applications throughout the organization," said Spyros Sakellariadis, Mainframe Migration Initiative Project Manager for Microsoft Corp. "With Cognizant as an integral member of our team, customers will be able to take advantage of their current IT assets while also taking advantage of the more cost-effective Windows solutions." Cognizant supports IT organizations seeking to redeploy legacy applications with proven methodologies and tools for modernization based on the .NET Framework. "We're very excited to enter this alliance with Microsoft, which broadens our ability to maximize customer value and ensure a smooth transition to the Microsoft platform," said Gajen Kandiah, vice president of Cognizant's Advanced Solutions Group. "Many of our larger customers are looking to modernize their systems infrastructure by integrating with, or migrating from, the mainframe. Our alliance with Microsoft ensures we bring the world-class capabilities of both of our companies to our mutual customers."

As part of its ongoing effort to provide customers with greater service value, Cisco Systems introduced its new Global Services Alliance program. Through the Global Services Alliance program, Cisco and key participating partners will be able to provide co-branded technical support services to customers requiring consistent information technology support capabilities on a global scale. This consistency in support is made possible by tightly integrating the Cisco SMARTnet(R) technical support offering and Cisco services' best practices with the partner's value-added IT services. The Global Services Alliance program benefits Cisco customers with extensive IT resources distributed across multiple countries and will help them maximize the return on their IT investment and help ensure the resiliency of their IT infrastructure. "Our global customers want partners that can provide flexible and consistent services worldwide. The Global Services Alliance allows Cisco and its channel partners to align service portfolios to a single complementary platform that provides greater flexibility and value to our shared end customers," said Wim Elfrink, senior vice president, Cisco Customer Advocacy. "Through this program, Cisco and its Global Alliance partners will provide a broad portfolio of end-to-end network services that address all aspects of issues with geography, technology, and applications through globally consistent and integrated IT-level support capabilities." "The Global Services Alliance extends existing Cisco partner initiatives focused on creating global efficiency and consistency. This newest advance follows the recently announced Cisco Global Commerce Specialization, which recognizes partners that have a global presence and proven capability in providing consistent commerce and product logistics services to global customers. These developments further expand the opportunities for Cisco end users to make value-based choices from a variety of partners," said Paul Mountford, senior vice president, Cisco Worldwide Channels.

The Board of Directors of Pomeroy IT Solutions, announced that Stephen E. Pomeroy has been elected to the position of Chief Executive Officer and President of Pomeroy IT Solutions, Inc., and David B. Pomeroy, current CEO, has resigned. Steve Pomeroy had previously been the President and Chief Operating Officer of the Company. David B. Pomeroy, Chairman, stated, "Steve's 19 years of experience in our Company in just about every facet of our business, along with his track record of outstanding performance and achievement, makes him uniquely qualified to become our new Chief Executive Officer." Steve Pomeroy is a graduate of Xavier University in Cincinnati, Ohio and joined the Company in 1985. From 1991 to 1994, he worked as a sales/marketing representative for the company. Thereafter, he served as the Company's Director of New Market Development from 1994 through 1996. In September 1996, he was named Vice President of Marketing and Corporate Development for the Company, and he served in that capacity until promoted to the position of Chief Financial Officer, which he held from May 1997 through January 2001. In December 1998, during his tenure as Chief Financial Officer for the Company, Mr. Pomeroy was also elected to simultaneously serve as the President and Chief Executive Officer of Pomeroy Select Integration Solutions, Inc., a wholly owned subsidiary of the Company. Mr. Pomeroy was named President and Chief Operating Officer of the Company in 2001. Mr. Pomeroy has also been a Director of the Company since February 1998.

ATG announced preliminary financial results for the second quarter ended June 30, 2004. Based on preliminary financial data, total revenues for the second quarter of 2004 are expected to be in the range of $14.0 million to $14.5 million, compared with total revenues for the first quarter of 2004 of $16.8 million. In its first-quarter 2004 financial results news release, ATG stated that it expected revenues for the second quarter of 2004 to be "flat to sequentially higher" compared with its first-quarter 2004 results. "Several deals were delayed at the end of the second quarter, including a multi-million-dollar government contract," said Bob Burke, ATG president and CEO. "Although ATG was selected as a vendor, the government award is presently under protest, and consequently we are currently unable to complete the transaction and recognize the related revenue. We fully expect the protest will be resolved in the second half of 2004. "The revenue from these delayed deals would have enabled ATG to meet its revenue guidance for the second quarter. As we begin the third quarter of 2004, we see evidence of an improving business climate. As a result, we remain confident in our ability to improve ATG's bottom line and continue to target a return to profitability in the second half of 2004." ATG currently expects that its total expenses for the second quarter of 2004 will be in the range of $18.5 million to $19.5 million, in line with management's previously provided guidance. ATG anticipates that its closing balance of cash, cash equivalents and marketable securities will be between $33 million and $34 million. This range is at the higher end of the company's previous guidance.

Glowpoint announced that SoHo Video Solutions, a complete, turnkey video solutions provider, has signed an agreement to become the company's first wholesale reseller. SoHo will offer GlowPoint's "All You Can See" Unlimited 512kbps video calling plan exclusively in their all-inclusive videoconferencing bundle that integrates a Sony PCS-11 video endpoint, a 32 inch monitor and a three year maintenance program, including SoHo's "One-Call" customer service. As a wholesale partner, SoHo will offer one simple invoice combining hardware and GlowPoint service subscription fees and will be responsible for first level customer service and technical support. "We believe one-stop video communication bundles will be critical in creating an easier purchase decision for customers and in shortening the overall sales cycle," stated David Trachtenberg, CEO, GlowPoint. "And by lowering a company's upfront investment to incorporate video into its everyday business, SoHo continues to expand GlowPoint's reach into the video communications market." "The SoHo management team has a successful track record in offering all-inclusive videoconferencing products to the marketplace," said Walter Sebastion, Public Relations Director, SoHo Video Solutions. "With GlowPoint's intelligent IP-based network in every sale, SoHo can offer the right solution for the right price to our customers, making video as easy to use as the telephone, but with the power of face to face communication."

Home Director welcomes two new Florida authorized integrators to the Sears Connected Home Program, as the Company refocuses its efforts to recruit participants in key markets across the country. "As part of our new strategy, Home Director has identified key geographic markets throughout the United States and solidified partnerships with builders and local integrators to aggressively expand our national footprint. These local, professional integrators are key to achieving this footprint and expanding our presence in the rapidly growing Florida market," said Mike Liddle, Chief Executive Officer of Home Director. The two Florida integration companies announced are AllTech Specialists in Tampa, and Atlantic Smart Technologies in Jupiter. "As the infrastructure provider of the Sears Connected Home Program, Home Director has an award-winning product line, which, coupled with our emerging home automation solutions and upcoming product introductions, provides an affordable technology lifestyle solution for America's homebuyers. Through these new partners representing the Sears brand, we are able to deliver compelling technology solutions to their customers, while helping them leverage their already successful businesses and expertise locally," Liddle said. "This affordable technology lifestyle is backed by Sears, one of the most trusted brands in America, bringing additional peace of mind to both builders and homebuyers alike," added Barbara Carney, Vice President of Home Director. In addition, the new product and technology development initiatives that the Company is working on will position Home Director for continued growth that capitalizes on the housing boom taking place across the country. "We are very excited to have these Florida integrators join the team," Carney commented.

AOpen announced the launch in North America of yet another compelling product in its award-winning PC housing line-up: the AOpen H420 Tiny Tower case. The design of this new case was crafted for system builders who want to provide their business, education and government customers with the most value in as small a package as possible, while retaining all the strengths and flexibility of larger units. "We feel that providing system builders with a case that not only offers a full complement of features and strength, but that also can be built-to-order in less time -- with less hassle -- is extremely important in today's challenging BTO PC market," said Jacky Wu, Global Product Manager, AOpen Housing Division. "That's why we made the H420 virtually tool-less and also Prescott CPU-ready to be very competitive and win our customers more business," Wu went on to say. The only screws required in the assembly of the H420 are for securing the motherboard (the case accepts either microATX or flexATX boards). All drive bays and expansion slots and even the side panels are tool-less. The AOpen H420 also boasts one of the most powerful chassis/power supply combinations in its class with a hearty 250W power supply. It also features very low noise output (24dB) and the ability to maintain a low ambient operating temperature -- reducing the possibility of damage from heat to the CPU. With simple tower-to-desktop convertibility, front USB 2.0 and audio ports and a total of six internal/external drive bays, the AOpen H420 is truly ready to get to work. The new AOpen H420 case has an MSRP of $54.99 and comes with a 3-year limited warranty. For more information and detailed specifications on this quality housing product from AOpen, please visit: http://usa.aopen.com/products/housing/H420series.htm.

SanDisk announced that it has passed the 10,000-store threshold in its rapidly expanding efforts to offer inexpensive Shoot & Store flash memory cards to consumers in places where they shop frequently. Rite Aid and Kmart are among the latest retailers to begin selling the line, joining hundreds of other drug and grocery storefronts. Rite Aid Category Manager Steve Lund said that sales of Shoot & Store cards have been "very encouraging. They are part of our strategy to build consumer awareness of Rite Aid as a one-stop center for digital cameras, flash memory cards and print processing." At Kmart, the line expands the retailer's ongoing commitment to digital photography products. Also adding the cards are several major supermarket chains. Analysts say that momentum is growing for budget-priced cards that are widely available and can be used to archive images, just like traditional analog negatives. "With SanDisk's initiative to provide wide retail distribution of digital film at lower prices, we are likely to see a broadening of the marketplace, which can only serve to fuel further growth in digital photography," said Stephen Baker, director of industry analysis with The NPD Group, a market research company that tracks retail trends. Overall, he said, retail sales of flash memory continue to boom, with sales up 51 percent for the last 12 months ending in April 2004. "The rapid acceptance of Shoot & Store doesn't surprise us," said Semico Research analyst Jim Handy. "Just as people today squirrel away their negatives in a shoebox, consumers will do the same with their flash memory cards in the future, circumventing any need to frequently download their photos to computers," he said. "This strategy will work well for SanDisk, and we expect for it to help digital photography displace film over the next few years."

Belkin introduces its new PureAVSilver Series line of home theater accessories, designed to unleash the performance and versatility of your home theater system while complementing the features and prices of today's AV equipment. Silver Series, which includes interconnects and power-conditioning products, will be available in North America on August 1, 2004. The promise of affordable-yet-advanced AV components to deliver a powerful home theater experience is not possible without similarly sophisticated and affordable accessories. Capabilities of the LCD display far exceed those provided by standard connectivity out-of-the-box. Matching the sonic experience of digital theaters at home requires digital interconnects to support DTS(R) surround sound components found in both places. Power-conditioning accessories are critical to achieving the cleanest possible sound and clearest picture. With dramatic improvements in the performance, capabilities and affordability of today's home theater components, PureAV was developed to match these components in features, aesthetics and prices. Networked AV components, improved surround sound processing, and next-generation digital audio video interfaces are here now; and Silver Series is engineered to optimize these technologies. "A much larger audience is now experiencing the passion felt by a small, select group of enthusiasts in the early days of hi-fi. Audiophiles and videophiles have long recognized the critical role that accessories play in achieving optimal results," says Gavin Downey, PureAV Business Unit Manager for Belkin. "Advancements in display technologies and its lower prices are driving sales in the home theater arena," Downey further explains. "But, what's lost in this rush of mass adoption is an understanding of the importance of accessories in achieving the best possible home theater experience." "Today's challenge is educating people to this fact while providing accessories that complement AV components in all facets. PureAV Silver Series solutions are built to perform beautifully while meeting this challenge," Downey concludes. With plasma and LCD displays driving the evolution of home theater design, AV products are becoming more sophisticated both in function and aesthetics. It is a return to the early days of television with components displayed as technological works of art. "We wanted to complement this new art in the sculptural form of our products," explains Ernesto Quinteros, Director of Belkin's Industrial Design Group. "Our goal was to create a sleek line that fits seamlessly in your home while also delivering enhanced function and usability."

TippingPoint Technologies, the leader in intrusion prevention, announced that Gartner Inc., the leading global research and analysis firm, has positioned TippingPoint in the Visionary Quadrant of its report, "Magic Quadrant for Enterprise Firewalls, 2H03." Gartner also recently released a "Magic Quadrant for Intrusion Detection Systems (IDS), 2H03," in which Gartner recommended that IDS vendors move to prevention, which "must inspect traffic at multiple gigabit speeds while introducing minimal network latency. IDS vendors that have not introduced blocking capabilities by the end of 2004 will not be viable providers beyond the end of 2005." TippingPoint's Chief Executive Officer Kip McClanahan said, "As one of the first vendors to perform total packet flow inspection and intrusion prevention, we continue to emphasize the importance of accuracy and performance in our products. We're proving this with our forthcoming five-gigabit Intrusion Prevention System, which we believe will be the highest performing product on the market." According to Gartner, vendors listed in the Visionary Quadrant have a clear vision of market direction and are focused on preparing for that, but they can still improve in terms of optimizing service delivery. The Magic Quadrant is copyrighted April 13, 2004, by Gartner Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

TerraWave Solutions, a value-added distributor of Wi-Fi® Solutions, has been selected by the Wi-Fi Alliance as an official Alliance test bed fulfillment source. As demand for authorized testing of 802.11 products increases, TerraWave will assemble, configure and ship test beds as a service to Wi-Fi Alliance members that want to certify Wi-Fi products for interoperability. More than 200 of the Wi-Fi industry's leading companies have certified over 1,250 products. Moving forward, TerraWave will provide pre-packaged test beds required for certification throughout the world. The test beds will be available exclusively to members of the Wi-Fi Alliance and to authorized Wi-Fi laboratories. Formal Wi-Fi certification testing remains the responsibility of authorized Wi-Fi laboratories. TerraWave's provision of test beds to Wi-Fi Alliance companies will now facilitate their internal pre-testing prior to submission for formal certification, thereby further promoting interoperability within the industry. The beds consist of a number of access points and station cards which are bundled into a single kit, loaded with specific versions of firmware and drivers. TerraWave will ensure that each test bed is in full compliance with the Alliances' specifications. Each kit package will undergo a quality and control review prior to shipping to guarantee test bed consistency required to obtain the Wi-Fi Alliance Certification. A single source to provide standardized test bed fulfillment and a clearly defined process for ordering and obtaining professionally kitted test beds supports the Wi-Fi Alliances' efforts to promote the interoperability of IEEE 802.11 family of standards. In the past, test beds were assembled by individually contacting each product vendor. As the number of different test beds and test benches increases, it has become necessary to formalize the test bed process. "Based on the growing number of requests we receive throughout the world for test beds, the Wi-Fi Alliance and its members recognize the continuing need to support a highly-evolved testing program," said Wi-Fi Alliance Managing Director, Frank Hanzlik. "We engaged TerraWave based on their extensive wireless networking knowledge and their ability to manage logistics, distribution as well as the set-up and configuration of 802.11 technologies." "We're looking forward to working with the Wi-Fi Alliance and its members to optimize the test bed fulfillment process and to make it easier for member companies and test labs to order and receive test beds for Wi-Fi certification," said Chris Marco, President of TerraWave Solutions.

AdRem Software, provider of network management solutions, announced a new channel-based sales strategy aimed at building a global network of channel partners and assisting them in enhancing their network management offerings across vertical markets. Moving away from its focus on direct sales, AdRem will concentrate on partnering with value-added resellers, networking services providers, system integrators and consultants to bring its solutions to market. AdRem's product portfolio includes software for optimizing Novell NetWare-based infrastructures along with NetCrunch - the company's latest software for proactive management of mid-sized multi-platform networks. According to the vendor, NetCrunch is the only software product below $1,500 to integrate logical and physical topology mapping with threshold-based performance monitoring, alerting, data collection and reporting. "The channel strategy is the way to go because we want to ensure that customers locally get high quality sales and service support on our solutions," says Brandon Drew, International Sales Director at AdRem. "Partners are critical to AdRem's success. In return, we're eager to help them craft an efficient go-to-market strategy to grow their businesses. Our NetCrunch product alone offers strong reselling points such as its affordable price, attractive licensing model, integrated multi-platform functionality, ease of use and quick deployment. In fact, all our management products are easy to sell and you can put together profitable value-added services around them," Drew said. While traditionally direct sales have been a successful strategy for the company's solutions for NetWare, AdRem believes the channel sales format and a comprehensive reseller program are better suited to market NetCrunch. "In the past, with our niche products we targeted a relatively narrow group of users," Drew noted. "Our newly-released NetCrunch 3 is an all-can-have type of software that addresses the network management needs of any organization in any vertical. AdRem's new strategy is meant to reflect that reality."



Q&A with John Koury,
Vice President, Channel Marketing, EMC Corporation


EMC Corporation is known as the world leader in products, services and solutions for information storage and management and John Koury is responsible for collaborating with EMC's various divisions and organizations to strategically position EMC for additional growth through current and future channel partners including distributors, resellers, integrators, service providers and computer system vendors. EMC systems and services, as well as software from EMC and its divisions and subsidiaries Legato, Documentum and VMWare, are currently offered by hundreds of partners worldwide. Koury was named to the newly created position in 2003. A 20-year IT industry veteran, Koury had previously served as Vice President of Worldwide Marketing for Compaq Computer's Enterprise Storage Group. In addition to his senior management role at Compaq, he has also held management positions at Intelligent Electronics and the former Digital Equipment Corp. We caught up with John and got this update….

Q. How is EMC doing these days. Give us an update on the business, recent highlights and some of your immediate goals and objectives?
A. If you look at our most recent earnings report and our discussions with Wall Street, our business is growing faster than the market, and we are gaining share in the small to medium business (SMB) market, which is a new area for EMC. The integration of LEGATO and Documentum into the recently announced EMC Software Group, headed by Mark Lewis and Dave DeWalt, has increased our focus on open software, and our partners and customers have responded very positively. The launch of the new CLARiiON AX100 and NetWin 110 systems in late May has given our partners two new solutions for storage area networks (SANs) and network attached storage (NAS), at very attractive price points, enabling them to more effectively offer the benefits of networked storage to small and mid-size customers. My goal remains the same: to help EMC become the best-in-class partner to our worldwide network of solution providers.

Q. How are your new channel efforts going?
A. That question is probably better answered by our partners, but I think that we are making steady progress toward our goal. We have extended our Velocity Partner Program to the EMEA and Asia Pacific regions, invested heavily to enhance our partner training and certification programs, rolled out EMC Partner Support Centers around the world, and increased our partner coverage model and our marketing efforts. Our recent Partner Councils in the Americas and in EMEA provided positive feedback for our efforts, and also helped validate our channel strategy. We still have much to do, but we are a better, stronger partner than we were even six months ago.

Q. Why are they doing so well?
A. Three reasons: We listen carefully to our partner community, and work hard to implement their suggestions for improvement. Second, our executives, led by our CEO Joe Tucci, understand the reach and leverage that our partner community can provide, and are funding our efforts to grow our channel business. Finally, our corporate culture demands and expects that we will be the best at whatever effort we undertake, and that attitude permeates everything we do in the channel arena.

Q. What products, categories are hot?
A. Storage networks, both storage area networks -- SANs -- and network attached storage -- NAS -- are really hot right now. Our CLARiiON products are really driving our gains in the mid-market as they can be used for both SAN and NAS depending on what applications a customer is running. Storage management software is another area that is getting a lot of attention. EMC has some excellent solutions in this area, including our Visual family of software for SAN and storage resource management.

Q. What are some areas where you'd like to see improvement? (i.e. Types of Partners, Size of Deals, Service agreements, etc.)
A. We are investing in partner training and certification, and are especially interested in developing more service-enabled partners. Also, we think that integration of the LEGATO Software offerings into our partner portfolios is a win for us, for them, and for our customers.

Q. How's the second half of the year looking for EMC and its channel partners?
A. We're not standing still and are counting on the continued development and success of our partner community to be a key part of EMC's growth going forward.



RESEARCH

SMB Buying Trends

According to AMI-Partners' bi-annual worldwide SMB IT and Telecommunications opportunity sizing study titled "The SMB Global Model", IT and telecommunications spending among SMBs worldwide is expected to touch $868 Billion by the end of 2004. IT products and services are expected to drive approximately $528 billion of this figure, up 13% from the $467 billion spent during 2003. Telecommunications products and services, including VoIP services and on-premises equipment such as PBXs, will drive approximately $340 billion of spending during 2004. Based on AMI-Partners' comprehensive annual primary research based tracking with over 5,000 SMBs across the globe, The SMB Global Model study predicts worldwide SMB IT and Telecommunications spending will exceed $1.1 trillion during 2008, suggesting a 2003-2008 annual growth rate of 7.2%. APEJ (Asia-Pacific Excluding Japan) and EEMEA (Eastern Europe, Middle East and Africa) will grow their combined share of this figure from 27% to 32% during the same period, as North America and Western Europe's combined share adjusts from 58% to 53%. The study indicates key economic factors driving worldwide SMB IT acquisition growth include:
-- Strong new business formation in Eastern Europe, Russia and China, led by privatization and the eastward expansion of the EU. Of the 9.5 million new businesses expected to be added to the global SMB universe by 2008, 75% , or about 7 million are expected to come from the Eastern European and Asia-Pacific regions.
-- Foreign investments from Western European companies setting up and modernizing units in the east to benefit from lower labor costs.
-- The continued strength of the Chinese and Indian economies and growing intra-regional trade in the Asia-Pacific theatre.
-- Japan's economic revival, which is now spreading beyond large industrial exporters to the broader SMB universe.
-- The low interest rate environment, coupled with a housing boom led consumer consumption spree in mature economies such as the US, UK and Australia.

While these broader economic trends provide the fundamental basis for business growth, the stars are fully aligned on the technology side as well. The traditional 4-year PC-replacement cycle is in full swing from the Y2K period and, in combination with the ongoing shift to notebooks, is resulting in exceptional growth in PC shipments. The study shows SMBs bought $81.7 billion worth of PC hardware during 2003 and are expected to spend over $93 billion during 2004, an increase of 14%. Worldwide SMB PC shipments are likely to reach 71 million units in 2004, up 17% from 2003. The study shows rapid PC adoption and PC density (PCs per firm) growth in India, China and Russia, with annual PC shipment growth in rates of over 20%. "Emerging markets are witnessing the rapid emergence of a services sector to serve growing affluence and domestic demand, and SMBs need basic IT infrastructure to deliver and be competitive", said Deepinder Sahni, Sr. VP at AMI-Partners. PC hardware spending among SMBs in China is expected to touch $4.1 billion in 2004, and grow to $8.1 billion in 2008. PC Shipments among SMBs in India will grow from 2.1 million units to 4.9 million during the same period, while shipments to Russian SMBs are expected to grow at an annual rate of 20% from 1.7 million units in 2004 to 4.2 million in 2008. Strong growth in businesses adopting networking products for the first time is fueling growth in routing, switching and wireless LAN gear, with annual spending growth rates in these categories exceeding 30%, and expected to grow to over $3 billion by 2008. Meanwhile, SMBs in the US and Western Europe are seeking productivity growth and looking to manage costs without boosting hiring back to unmanageable levels. The study shows the hosted applications/on-demand (ASP) computing model is gaining credibility, with over 1 million North American and Western European SMBs now using software as a service. By 2008, over 3 million are expected to utilize ASP services. AMI's study shows ASP, enterprise applications such as CRM and ERP/SCM, security, intranets, IT consulting services, portable PCs and storage solutions will provide the underpinnings of IT growth in mature markets. Productivity growth is also likely to be boosted by investments in wireless networking gear, which is expected to increase from $600 million in 2003 to $835 million in 2004 in North America and Western Europe. "VoIP is just beginning to makes its presence felt in the SMB space. The intersection of VoIP and wireless technology is expected to bring huge productivity gains to this space worldwide", said Sahni. Mature market SMBs are also bolting on security apparatus to their already robust networking and computing infrastructure, driving annual growth in security spending in the 25% range. SMB spending on the full spectrum of security hardware and software during 2004 is expected to be $3.5 billion in North America and Western Europe, and likely to grow to over $10 billion by 2008.

SMBs in countries such as Singapore, Taiwan and Korea, which serve as strong global manufacturing/exporting hubs, are merging into global supply chains,driving investments in networking infrastructure, ERP/SCM and CRM software and storage solutions. With an uptick in manufacturing in these countries, driven by an improving global outlook, the AMI study predicts total IT spending in these 3 countries combined will grow from $11 billion in 2004 to over $17 billion in 2008, an annual growth rate of over 11%. This AMI study, titled The Global Model, provides a detailed picture of IT adoption and spending patterns in the SMB space across 28 IT sectors and 15 countries, with roll ups to regional and worldwide views. The number of businesses and their spending on various technologies - including wireless LANs, IP PBXs, VoIP, outsourced IT services, storage, VPNs/firewalls, intrusion detection, CRM, ERP/SCM - are examined in depth across the 2003-2008 time frame. The study also provides drill down views of each of these technologies by 8 employee size and 7 vertical market segments and serves as the industry's most comprehensive worldwide SMB market planning tool. For more information about this study, AMI-Partners, or our Global SMB research, please call AMI-Partners at 212-944-5100, email ask_ami@ami-partners.com, or visit the AMI Web site, www.ami-partners.com.




WLANs Meet Hackers

Through 2006, 70 percent of successful wireless local area network (WLAN) attacks will be because of the misconfiguration of WLAN access points (AP) and client software, according to Gartner, Inc. Security for WLANs and personal digital assistants (PDAs) in the company needs to be driven by updated security policies that address the unique demands of the mobile workplace. Gartner presented these findings today during the Gartner IT Security Summit 2004, which is taking place here, through June 9.

"Whether hackers are able to enter a company's WLAN through an unprotected AP or through a peer workstation, once they are associated with the network, they will be difficult to detect because they may not be visible in or near the network site," said John Pescatore, vice president and Gartner fellow. "A clever hacker will play it safe and use the company's resources quietly, and as a result, may never be found."

To protect themselves, businesses must make sure that employees or hackers don't install unauthorized wireless APs on the network and that APs are configured securely. In dense environments, such as urban areas or multi-tenant office buildings, companies have to make sure that their users don't connect to other companies' networks. The least expensive, and least effective, way of doing this is to buy a wireless sniffer handheld and walk the perimeter of the network. The most expensive, and most secure, is to install a separate set of wireless intrusion detection sensors.

"Businesses should use sniffers to demonstrate potential exposure problems to management, especially to the management that funds security problems," Pescatore said. "Sniffer walks should not be attempted as an ongoing survey method, but should be kept on standby. If rogue WLAN activity is detected by network monitoring systems, individual members of the IT staff can be dispatched, to act as trackers, to hone in on unauthorized signal sources." Gartner says that companies will get the most efficient WLAN intrusion detection protection from a vendor-independent dedicated sensor investment. The overwhelming advantage of this method is that all WLAN traffic can be detected regardless of the equipment and vendors involved. Additional information about the conference is available at www.gartner.com/us/itsecurity.





Service Provider Satisfaction

Sage Research announced the results of the May 2004 Service Provider Confidence Index (SPCI). In the latest report, available via free subscription at <http://sageresearch.com/SPCIForm_a.htm>, service provider expectations resumed a steady upward trend that had been interrupted in the March SPCI. The May Expectations Index rose 3.6 points to 77.2, from 73.6 in March. Meanwhile, the Current Conditions Index fell slightly in May, down to 53 from March's level of 55.2. "The continuation of the upward momentum in the Expectations Index shows that the dip in March was an anomaly rather than a wider trend," said Chris Neal, a research director at Sage Research. "The fact that both main indices, and 11 of the 12 sub-indices, remain in positive territory, speaks to the continued optimism in the industry."

Sage Research began compiling the bi-monthly SPCI in January 2002. This free report measures and analyzes the current mood of telecommunications service providers. It signals to companies that sell products or solutions to service providers what their customers consider to be the present condition of the industry and what their expectations are for the near-term future. Sub-Indices: Gainers and Losers.

The main Current Conditions and Expectations Indices are each the average of six sub-indices (detailed below). Of the twelve total sub-indices, six rose and six fell in May. The largest gainers were Service Development Expectations, Service Development Current Conditions, and Employment Expectations, each of which gained 4 points and remain firmly in "high" territory (above 50). The most significant losses were in Capital Spending Current Conditions and Revenue Current Conditions, each of which fell 6 points, but also remain in "high" territory.

Methodology The Sage Service Provider Confidence Index is a tracking study, with data collected bi-monthly. For the current SPCI, Sage Research included responses from 111 service provider professionals from North America and worldwide, including:
-- Incumbent carriers (ILECS, RBOCS and PTTs)
-- Long distance carriers and IXCs
-- Internet, web hosting, and other network service providers
-- Competitive carriers
-- Application service providers (ASPs)
-- Wireless operators
-- MSOs and other cable companies
To compile the SPCI, Sage Research asks the respondents a series of questions about their organizations that probe both current conditions and expectations for the future. The questions cover six categories:
-- Spending on capital equipment
-- Spending on product and service development
-- Revenues
-- Employment
-- The value of the NASDAQ index as an indicator of investor confidence
-- Overall perceptions of industry conditions

For each question category, Sage Research calculates respondents' current conditions and expectations values. The Current Conditions Index and Expectations Index are the per-respondent means of the values for each of the six question categories. You may receive the complete current Service Provider Confidence Index, with methodology, for free by subscribing on the Sage Research Web site at <http://sageresearch.com/SPCIForm_a.htm>. Sage also archives previous versions of the SPCI on its Web site at <http://sageresearch.com/SPCI_a.htm>.

The market for worldwide IT services grew 6.2 percent to $569 billion in 2003, up from $536 billion in 2002, according to preliminary results from Gartner, Inc. Accelerating activity in offshore outsourcing, in which companies shift jobs across national borders, contributed modestly to the overall growth. U.S.-based vendors continued to lead the worldwide IT services market, attracting 59 percent of total spending. IBM remained thelargest competitor, with revenue rising 6.2 percent to $42.6 billion, and its market share unchanged at 7.5 percent. India-based vendors represented a small segment of the worldwide market, with 1.4 percent of total revenues. However, their revenues collectively increased 29 percent, compared with only 4 percent growth among U.S.-based vendors. India-based vendors depended almost entirely on exports, with 92 percent of their revenues coming from customers outside India and only 8 percent within India. "Vendors based in the United States and India have been most successful at driving sales outside their native regions of North America and Asia/Pacific," said Kathryn Hale, principal analyst for Gartner's worldwide IT services group, based in San Jose, California. "Vendors based in other countries tend to sell primarily in their own country, then expand within their local region. As a result, vendors based in the United States and India are more experienced in global sourcing and best positioned for global expansion." Global sourcing is another term for offshore outsourcing. "The gradual merging of the Indian economy with the global economy is opening up the Indian market for international competition," said Ravindra Datar, principal analyst for Gartner IT services research in India, based in Mumbai, India. "This is encouraging enterprises in India to invest in technology and global best practices, further driving demand for IT services here in India." The strengthening of many international currencies against the U.S. dollar had a significant impact on revenue results in 2003. "Although the growth of the services industry improved compared with the decline of 0.3 percent in 2002, growth rates were inflated by changes in the exchange rate of the U.S. dollar," Ms. Hale said. "Vendors operating extensively outside the United States reported inflated growth after converting local currencies into dollars.



COMMUNITY

Reseller Opportunities Abound - Financial Services Market
By Jill Kerr - President, Kerr & Company

This month, we look at another vertical market laden with opportunity - the financial services market. Recent legislation has magnified opportunities for resellers in the areas of accounting, banking, investments and financial services. Let's take a look at this niche and discover how resellers can tap into this market.

Opportunities in Financial Services

Opportunities for resellers in the financial services market are being driven by two relatively new pieces of legislation. As I pointed out last month in my discussion of the healthcare vertical, government regulation means money in the pockets of resellers.

Two legislative acts that are molding the financial services vertical: the Gramm-Leach-Bliley Act and the Sarbanes-Oxley Act. Both acts require increased privacy, security of both personal and financial information, retention of paper and electronic documents, and real time reporting for end-users and institutions. At a high level, Gramm-Leach-Bliley regulates any business that has either personal or financial information be it paper or electronic and the exposure of that information to anyone including employees. The Sarbanes-Oxley Act as it relates most to resellers requires audited financial statements for public companies and that financial institutions maintain a five-year history of electronic statements in including storage of email.

Both of these acts will require extensive knowledge on the part of the solution provider as well as the ability to identify a business' needs and recommend the appropriate technology. Once this information is obtained and these skills are mastered, however, the upside can be enormous.

The Offerings

The key areas of focus in the financial services market are consulting services, security solutions, and storage solutions. Security services include monitoring data transfers, email and instant messaging usage, and attempted intrusions. Consulting services are comprised of policy design, vulnerability assessments, and compliance monitoring. Storage solutions will be required in the form of servers and systems for archiving data.

Opening the Door

Now that you grasp the opportunity, let's craft a strategy to generate business and to sell both products and services.

Demonstrating Your Expertise - Once you are well versed in the technology, reach out to current and prospective customers via seminars, newsletters and your corporate website. Keep customers informed about the regulations. Check distributor offerings for educational information and programs that they will make available to your customers.

Compliance Audits - A free compliance is an excellent way of starting a dialogue with a current or prospective customer. Consider asking them the following questions:

Does your network contain any financial information about third parties?
Do your employees have formal security training?
Do you track Internet connections and usage?
What percentage of your business is conducted by email or FTP?
Do you regularly analyze security advisories and vulnerabilities?

Conducting such an audit opens the door to discussions about compliance and presents resellers with a chance to present a solutions offering. While conducting the audit in person is optimal, you may present the audit as an interactive questionnaire on your website or in your corporate newsletter or even in a special mailing.

Recurring Revenue - Consulting with financial services customers shouldn't be a one time thing. Ongoing compliance audits, technology maintenance and security updates can be provide a steady flow of revenue into your business.

Resources

Look to your distribution partners for resources to build a business strategy around the financial services market. Ingram Micro has a reseller program targeted at the finance market and has teamed with manufacturers to provide comprehensive information for solutions providers. Ingram even provides dedicated technical support for this niche. Avnet Hall-Mark announced earlier this year a market program focused on the Sarbanes-Oxley act. The program is designed to reduce the cost of entry for resellers and allow them to enter the market more rapidly with a strategy for compliance that includes go-to-market activities. An excellent website packed with useful information is www.bankinfosecurity.com

It's the Law

As with HIPAA compliance, the Gramm-Leach-Bliley Act and the Sarbanes-Oxley Act are the law! Financial services institutions have no choice but to comply. As grace periods run out and fines are issued, the pressure on companies will increase and informed resellers who are there to serve as a resource will benefit financially.

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.




Finding Global Sales Partners Requires Global Thinking & Strong Strategic Alliances
By G. A. "Andy" Marken, President, Marken Communications

For a number of reasons, including the fact that the U.S. represents one of the largest and most lucrative technology markets on the globe, foreign firms have always been more aggressive in their efforts to gain a foothold here first and then expand their activities to other countries. American companies on the other hand have often taken a defensive posture and retreated from activities outside the U.S.

According to leading economic indicators, the result has been record trade deficits of nearly $1.3 trillion. By circling the corporate wagons rather than bravely moving into new territories, U.S. businesses have sent clear signals to these major competitors that we aren't interested in selling to 95 percent of the world's population. Granted, sales in most of these areas are only now showing strong promise but the potential is enormous.

As important to a firm's long-term global success in its respective market area is that by retreating from markets outside the U.S., they also abandon vital intelligence outposts. Outposts that can keep firms abreast of plans and actions of foreign competitors as well as provide solid inputs for next generation products and solutions.

As foreign firms become more aggressive in the U.S. market as well as on a global scale, many American companies continue to struggle to determine how they can increase their global activity, presence and profits. Firms usually have three choices:

  • Establish their own corporate presence in key countries
  • Acquire a local competitor
  • Establish a relationship with a local, established distributor

For years, we have seen European and Asian manufacturers fail in the U.S. market. They open their own offices, send in their own people and launch programs and activities that worked at home. Rather than being deluged with sales, they have been overwhelmed with disappointment. Individual countries and cultures are well…individual.

International distribution often appears to be an easy way to increase sales, but more is involved than simply signing up a distributor in each target country. It is seldom - if ever -- achieved by Korean, Japanese, Taiwanese, Chinese and European firms that set up outposts in the U.S. By the same token, those firms that have attempted to impose U.S. policies, programs and activities have found that rather than providing a blueprint for success, they became a roadmap to disaster.

Although it's almost unheard of for their U.S. counterparts, international distributors develop and carry out their own marketing and promotional plans and programs. In many instances, they take almost total ownership of the products and their success in their respective countries...including sales, support and service.

Because the distributors are so important, U.S. firms that establish a relationship with them must view it as more than simply signing on a distributor; it's a strategic alliance. Too many firms fail internationally - in any country -- because they fail to fully come to grips with this important distinction, its requirements and its ramifications.

U.S. firms often lack a clear, concise set of international objectives. They often haven't determined which products/services have international appeal. They haven't considered product modifications to meet the application needs in the specific countries. They haven't considered the training and support that will be required. In addition, they haven't set down the physical and fiscal commitments they will have to make to ensure the program's success.

Equally important for the company is the development of a strong profile of the ideal distributor or partner they want/need...even for domestic markets. Overseas, the selection process becomes even more difficult. The biggest distributor in a given market isn't necessarily the best organization to represent your products.

Since you are establishing a strategic alliance it is extremely important to ensure that management styles can co-exist and thrive together and that sound personal relationships can be developed. In making the choice, it is important to understand how distributors operate in different parts of the world. In Europe, distribution varies dramatically from country to country, region to region and often from city to city. The same is true in the Pacific Basin, South America, and the Middle East except in these areas the distributors are often national in nature. While numerous distribution organizations have expanded their global reach, their "image," influence and penetration is usually quite different from country to country.

In most of these international markets, distributors not only play a key role in the sale and distribution of goods; they are also a strong marketing and support factor. They stock inventory. They have extensive lists of important contacts at the governmental and sales level as well as in-depth knowledge of their target markets. At the same time, they spend considerable time and money developing and maintaining their technical, training, and support expertise.

Even as the Internet has eliminated country borders to produce a global economy and global marketplace, too many U.S. manufacturers fail in overseas markets. They never fully come to grips with each area's important distinctions, their requirements, and the ramifications of these differences on how it affects the image, sale and use of their products. Instead, they rush to sign up distributors, fire them, and then sign up new distributors, much as they would in their own backyard.

This trial-and-error process delays sales success and in some instances has caused marketing and financial disasters. On the other hand, firms that carry out a careful selection process, conduct positive support and training programs, continually monitor their foreign relationships are likely to increase sales and profits.

There are several other reasons for choosing international distributors with care. Because of the distances involved in these strategic alliances as well as the language and customs barriers, U.S. producers, by necessity, relinquish a part of their marketing and sales authority to the local distributor. Thus, it is important to ensure that their respective management styles can exist and thrive together.

It is also advisable to document a potential local country's partner's market connections. As aggressive as the global market is today, a company simply can't afford the luxury of establishing a relationship with a firm that doesn't understand its target markets or doesn't have strong relationships in those markets. Management has to keep in mind that one of the key things they are "buying" is the distributor's ability to quickly and economically tap into their markets...with your products.

In most areas of the globe being "the new aggressive, hungry kid" on the block is not the desirable image you want to align with. Usually you're looking for an established (dare we say entrenched) organization that has extensive, long-term relationships with senior management and key technical personnel at prospective customer organizations. Key personnel in most countries make less than their U.S. counterparts but they have often come up through the ranks and move less frequently from company to company.

Finally, because of the distance between a U.S. company's headquarters and an overseas distributor's territory, it is important to ensure that the distributor's sales force has solid technical expertise, as well as the ability to service customers. With the slim margins firms are forced to deal with today, it is seldom economically feasible to fly service personnel across the country, let alone across the ocean to handle customer problems. When the supplier doesn't or can't respond to the overseas customer's or distributor's requests, the relationship sours quickly. This is especially true when the company is focusing all of their resources on protecting their market position at home rather than trying to build marketshare in the new territories.

Whether corporate management likes it or not, the local firm will be the company in that country. As we are all coming to realize service and support are becoming increasingly important for future sales. They become pivotal decision factors on the long-term success of a company and its products. If the company isn't willing to commit the time, money and effort required in helping the individual country distributors become successful for your products and services, management will be wiser to forget about looking at the greener pastures on the other side of the fence and focus on staying in their own back yard. It's better to be considered fairly good at home rather than a fool on a global scale.

This story was written by Andy Marken, President Marken Communications, Inc. You can reach Andy at his personal email: Andy@markencom.com





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