July 23, 2002

TABLE OF CONTENTS
News Channel Life: Momentum Swings Back to the Reseller by Keith Newman
Q&A with Bret Udy of Iomega Corporation
Back up ideas for SMBs by ChannelMedia Staff
Channel Digest: Sapient, Intel, Palm, Microsoft, & more
Research Small and Midsize Business by Gartner
Small and Midsize Businesses North America by Gartner
ARS: Broadband Promotions that Work
Top Selling Business Software List by NPD
Special Listing: Get Free Market Research and Shape the Future of channel partner portals!
From the Community Malicious Code: Laying down the Law by Mike Menegay, Network Associates
Changing Channels: Selling to our Future Customer Today by Steve Cross
The Tablet Has Profits for Resellers by Fred Brown
Job Board: Several New Listings!

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BUILDING SMB MARKET ALLIANCES
While some markets are maintaining their spending on IT products and services, the SMB market in North America is growing and, according to Gartner, is estimated to spend over $300 billion in 2002.

Take advantage of this lucrative opportunity by joining us this fall to build alliances with the top System Builders, VARs, and technology Vendors. Click here for more information.

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NEWS

Channel Life
Get your MoFo Rising! Or Time to work your MoFo!
By ChannelMedia Editor, Keith Newman

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All of this moaning and groaning can be depressing. Time to get your MoFo working. MoFo stands for Momentum and Focus and are two of the most critical ingredients in generating sales in today's sluggish market- and the channel is playing a major role in helping suppliers establish their MoFo.

Forget about the things you can't impact (i.e. Stock Market, Mideast peace process, etc.) and focus on driving momentum. One way momentum is gained is by establishing a "proof of concept" or "positive reference" that demonstrates that your product/technology/service works and that it is a repeatable solution. Today, the results of these efforts are key at determining the potential of a Company's future. That wasn't always the case. For example, I recently ran marketing and business development for a company that had a truly great concept that could actually make a difference to business decision makers and impact ROI. With some words here, a little spreadsheet info there and a Flash demo we were able to raise nearly $30M in venture funding, gather a bunch of press and analyst praise and "strategic agreements." We had created a great perception that ultimately led to a Phase 1 objective: A healthy pipeline of leads. In essence, we had Big Mo. A lot of companies had similar strategies and results. The point is that many of the leads and even sales were based on "perception." The fact is we, and many others, never really delivered on our promise and we eventually changed our business model entirely. We lost our MoFo.

Again, a lot of company's have taken this route over the past few years. But perception or "buzz" is yesterday's story. Today's market environment has a "show me" look and feel. That means press clippings and Flash demos alone don't cut it. They may still be nice and helpful but they have taken a back seat to showing the product or service not only works but drives a meaningful ROI to the customer. Thank goodness.

Here's where today's market swings to the "value channel" and the enormous opportunity for resellers and vendors to leverage each other toward profitable, short term outcomes. Resellers can help identify potential customers of new technology and services and then can drive toward successful "POC's"). Resellers and vendors who work together to create strategy, design, development, implementation and measurement plans will be the top performers in this skittish, reluctant market. Simply put: Using integrators to help acquire those early POC's is the most effective and efficient way to grow. Without having a few of these "proofs" in your back pocket it will be near impossible to establish momentum.

(For a discussion on how to acquire early customers see one of my favorite sources on this topic: http://www.chasmgroup.com/underthebuzz.htm).

Keith Newman is the Editor and Publisher of ChannelMedia - the SMB Edition. This newsletter is free, courtesy of VisionEvents and we are looking for contributors and readers.

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NEWS

Q&A with Bret Udy, Sr. Manager, Channel Programs, Iomega Corporation
By ChannelMedia Editor, Keith Newman

Q. Give us an update on the world of "user data…"

A. As email, the internet and new technologies continue to fuel the rapid growth of information and 81% of the workforce spends some amount of time out of the office, user data is saved and stored on multiple desktops, notebooks and networks - making it increasingly difficult to manage and protect. Versatile storage and backup of user data is essential to the stability of every business. With file-level removable storage, desktop hard drives and network attached storage (NAS) products, each complete with automatic backup software, Iomega continues to lead the industry as it has done for the past 22 years. Iomega offers a full line of innovative and affordable storage solutions designed to simplify user data storage, protection, security and recovery.

Q. And still have a strong bias toward selling through the Reseller Channel?

A. Over the past ten years, 99% of Iomega products have been sold through channel partners. The Iomega IoLink Reseller Program was developed and launched in March of this year to better support the sales efforts of our valued partners and to build long-term relationships for mutual success. This robust, tiered program delivers committed resources, tools and support that assist our Resellers in driving demand and generating sales for Iomega storage solutions.

Q. The current push is with network attached storage products, correct?

A. Our move into NAS came with the introduction of seven Iomega NAS A300 and P400 Series server configurations in March of this year. Iomega NAS servers are optimized for fast deployment, easy integration, high-performance file serving and high data availability at a low total cost of ownership (TCO). With prices ranging from $1,099 to $4,499 and a choice of operating systems, connectivity and fault-tolerant features, Iomega NAS is ideal for SMB customers, workgroups and/or remote offices with limited budgets and IT resources. An Iomega NAS server adds up to 480GB of RAID-redundant network capacity, takes the storage burden off of application servers, simplifies data-management tasks and increases information accessibility and sharing across all clients on the LAN or WAN.

Consistent with our long-term strategy to lead the industry in affordable and easy-to-manage solutions to store and protect user data, Iomega will continue to introduce, market, and support innovative network and client storage products.

Q. What else do you want to share with our Resellers?

A. For those Resellers interested in building their product portfolio with industry-leading data storage and backup solutions, connecting with more customers and boosting their profitability, sign up for the Iomega IoLink Reseller Program today at www.iomega.net/iolink.


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NEWS

Backup Ideas for SMBs - an Underused Opportunity
By ChannelMedia Staff

SMBs rely on their data to stay afloat just as much as Fortune 500 corporations do. While it may seem less glamorous to sell software to SMBs than it is to sell to the big boys, the current reality is that there are far more people computing in smaller companies than in larger ones. AMI-Partners, Inc. says businesses with 5 to 500 employees shelled out $270.8 billion total IT spending in 2000. That figure jumps to $800 billion spent by SMBs worldwide.

The SMB backup segment is untapped. Common mental blocks abound. Backup is considered too hard to learn and implement. Tape management is laborious. Businesses feel they must make a trade-off between speed and reliability. Even customers who routinely back up data on their servers must be instructed that beyond servers, PCs need backup too: it is estimated that 40 to 80 percent of a company's data is stored on desktop PCs and notebooks. Oh, and notebooks? Notebooks account for 35 percent of all PCs sold to businesses; 25 percent of which lose data as a result of theft or damage.

"For the roughly 7.1 million small and mid-sized businesses with PCs, backup continues to be a major chore," said Raymond L. Boggs, Small Business/Home Office VP at market research firm IDC. "Many view it like going to the dentist important in theory, but often postponed until there's a problem."

Somewhat more appealing than a visit to the dentist is Orinda, California-based Dantz Development Corporation's flagship, Retrospect Backup. Dantz has set out to make Retrospect the software of choice for the SMB market.

How can the channel take full advantage of Retrospect? In too many cases, SMB customers buy the same products as large enterprises, paying the same high-priced client licenses that the enterprises do. Worse yet, the choice for SMBs is often not how to back up, but whether to back up when the intelligent IT strategy is always to err on the side of caution.

Understandably, businesses without a dedicated IT staff are not particularly thrilled with unmanageable enterprise-level products when their goal is to simplify and automate the backup process. IDC's Boggs noted that having backup take place automatically insures that it gets done, especially in smaller firms.

Rather than stripped-down and up-priced backup software for the enterprise, Dantz recently introduced version 6 of its Retrospect Backup already used by 3 million individuals and businesses worldwide and touts it as offering some of the same features the big enterprise software vendors sell, only tailored for the small business. Quick, automated and accurate backups, easy file location, laptop backup, media space conservation, open file backup, and the ability to recover from a non-bootable (dead) computer are some of the advancements Dantz has engineered for the business customer.

One of the best new features is the ability to rebuild even after a laptop has been stolen. (You may not recover the computer, but at least you can recover the data.) Even among giant backup software providers, few want to tackle the problem of the road warrior who never lands in one place long enough to back up.

Unique to Retrospect is its support for the storage devices small offices rely on most: CD-RW, DVD and Zip drives, and other small/desktop backup systems. Dantz says currently none of the enterprise-level storage software vendors will condescend to back up to a CD, let alone a 100 megabyte Zip disk. The company notes it is equally adept at backing up to tape drives, tape library systems, fixed and removable disk drives, as well as backup over the Internet.


NEWS

Channel Digest
Sapient, GSI, Intel, Palm, Microsoft, and more…

Sapient said it was named a member of the Microsoft BizTalk Server Partner Program. Sapient has implemented BizTalk Server for several Global 2000 clients to reduce the time and costs required to deliver complex technology engagements -- from the integration of existing enterprise systems to the development of new web services for the integration of business partners. "Sapient is a leading implementer of BizTalk Server and can attest to the reliability and scalability of the product," said Eric Swift, lead product manager for .NET Enterprise Servers at Microsoft Corp. "Using BizTalk Server, Sapient has been very successful in delivering integration solutions that generate business value for its clients, who have been incredibly pleased with the results Sapient has provided."

Intel said it has begun initial commercial shipment of Itanium(R) 2 processors and that systems and software based on the new processors are expected to be available beginning this quarter. Over the next year, a broad base of original equipment manufacturers (OEMs) are expected to offer a range of server and workstation models with support from leading enterprise software and operating system vendors, the company said. "Intel and the industry are making great progress building enterprise solutions for the Itanium 2 processor," said Mike Fister, senior vice president and general manager for Intel's Enterprise Platforms Group. "With the processor's outstanding performance, enterprise-class capabilities and enormous industry support, 2002 will be the year the Itanium processor family makes real headway toward becoming the platform of choice in high-end data center computing."

GSI Commerce, a leading outsource solution for e-commerce, said it has entered into an agreement with Palm, a leading provider of handheld computers, to operate the Palm online store. GSI will be responsible for the development of the web store, including a revised design, merchandising, customer service and fulfillment. The store will feature a full line of Palm™ products and accessories, as well as software and an expanded selection of third-party accessories for Palm handhelds. Special "concept shops" will be created to service select business segments, including education and healthcare providers. "Because Palm is the market leader in the handheld category, many of our existing and prospective customers come to Palm.com to investigate the mobile computing solutions most appropriate for their needs," commented William Lynch, Vice President of eCommerce at Palm, Inc. "When customers do come to the Palm online store, we want to ensure that they have the most satisfying browsing and shopping experience possible. GSI Commerce is a best-of-breed e-commerce partner that we believe will provide an even better experience for Palm customers." Michael G. Rubin, chairman and chief executive officer of GSI Commerce, Inc., said, "Palm is a leading player in the worldwide handheld computer industry. Through this alliance, we believe that GSI Commerce can utilize its existing infrastructure to help Palm become even more effective in its online marketing and sales to customers and businesses."

StructuredWeb, Inc., developers of online marketing and sales collaboration platforms empowering small-to-mid size businesses (SMBs), and Best Software announced today a reseller program for ACT! Certified Consultants to deliver StructuredWeb for ACT! to individual and corporate users of ACT!. Available today, StructuredWeb for ACT! provides ACT! Certified Consultants with a robust, yet cost effective ecommerce solution for current customers and prospects.

The worldwide market for Building Automation Systems Hardware, Software, and Services exceeded $19 billion in 2001 according to a new ARC Advisory Group study. It is expected to grow at a Compounded Annual Growth Rate (CAGR) of more than 5 percent over the next five years and exceed $24 billion in 2006. David Clayton, ARC Senior Analyst and author of the study 'Building Automation Systems Worldwide Outlook' stated, "Despite signs pointing toward a global economic recovery, there remain tremendous pressures on all companies to find ways to lower their variable costs and become more profitable. A key factor to reducing costs, which is often overlooked, is the strategic management of brick and mortar assets. When managed strategically, brick and mortar assets can become tools, which support the company's strategic goals, as opposed to costs, which drag profits down. Comprehensive facilities management, however, requires a new approach to managing brick and mortar assets, one which utilizes integrated Building Automation Systems (BASs)."


RESEARCH

Small and Midsize Business
By Gartner

The typical small and midsize business (SMB) has revenue of less than $500 million per year and an overall staff of less than 1,000 employees. The Small and Midsize Business Focus Area looks at the issues SMBs need to focus on in order to survive in today’s growing IT world.

Scope of Coverage
Leveraging IT is critical for resource constrained SMBs to participate in today’s business environment. Recent studies have shown that, on average, SMBs will spend between 5 percent and 7 percent of their revenue on IT in 2001. However, SMBs should not simply adopt the same technologies, vendors, products, and service used by larger enterprises. There are new and unique IT opportunities to help SMBs overcome staffing and budgetary constraints.

Core Topics
Small and Midsize Businesses IT Management Strategies
Small and midsize businesses continually walk a tightrope in their attempt to balance planning, funding, resources, IT skills and IT infrastructure management. This core topic explores the management issues associated with strategic and tactical IT decision making, bounded by the constraints of a small and midsize businesses IT environment.

Small and Midsize Businesses Application Strategies
Small and midsize businesses applications development and deployment issues include functional, technical, vendor-related and deployment issues. Application strategies and packages — supporting electronic commerce, extranets, customer care, manufacturing, logistics, finance, human resources, marketing, sales and customer service will be covered. Additional areas covered include development tools and methods, databases, middleware, application integration, project management, data marts, business intelligence, and application services providers.

Small and Midsize Businesses Infrastructure Strategies
The Infrastructure Strategies core topic covers the full gamut of technologies which makeup Small and Midsize Businesses IT architecture. Areas covered include desktop and server operating systems, midrange systems, local and wide area networks, telecom and data services, desktop and server hardware, midrange systems, thin clients, mobile and wireless, and collaborative systems.

Small and Midsize Businesses E-business Strategies
The E-business Strategies core topic covers the extensive business plan, organizational, processes, and sweeping technology changes associated with transforming a classic business into an e-business. This core topic examines the evolving best practices and enabling technologies that small and midsize businesses need to embrace to fully exploit the potential of e-business.

Recent Spotlights
SMBVision: Business Powered by IT

Key Issues

What are the key semiconductor technology transitions, and how will they happen?
How will small and midsize businesses’ functional requirements for software applications evolve during the next three years?
How will SMBs deploy and manage software applications during the next three years?
Which vendors delivering software applications to SMBs will survive during the next three years?
What are the benchmarks and characteristics for SMB IT spending that balance strategic infrastructure evolution with operational efficiency?
What are the factors that are influencing IT decision making within SMBs?
What strategies and tactics will SMBs use to prioritize, track, manage and optimize their IT investments?
What tools are vendors providing to help SMBs manage their IT strategy execution and realization of business objectives?
How will SMBs effectively manage their IT infrastructures during the next three years?
What infrastructure providers will be strategic for small and midsize businesses during the next three years?
What technologies and services will small and midsize businesses deploy to build and maintain reliable and flexible IT infrastructure?
What will be the critical success factors for SMBs for deploying and implementing infrastructure components during the next three years?
About Focus Areas
Gartner's breadth and depth of coverage is unsurpassed. Focus Areas are views into Gartner that represent shared interests among our clients. Focus Areas fall into several key categories including Business, Industry, Markets, Technology and Special Reports. Focus Areas evolve as the interests and needs of our clients change. Visit Gartner.com for a complete view of current Focus Areas.


RESEARCH

Small and Midsize Businesses North America
By Gartner

The Small and Midsize Businesses North America Cluster takes the vendor viewpoint — providing CEOs, business unit leads, CMOs, sales executives and market research departments of services, application, and hardware vendors targeting the small and midsize business (SMB) market with actionable forecasts, trends, and analysis. Specifically, the Cluster provides an in-depth look at the market potential, preferred channels, services needs, budgets, priorities, decision makers, decision criteria of the small and midsize market. It is designed to help companies maximize their market share through the development of profitable penetration strategies in the areas of marketing, services, sales, branding, partnering, business models, vertical industries, competitive positioning and emerging markets.

Cluster programs deliver industry-specific business planning statistics, forecasts and analysis. Clusters enhance the broad range of Gartner analysis available in Core Research by providing in-depth information of unique interest to companies competing (or investing) in the industry covered by the Cluster.

Scope of Coverage
If you are someone who creates services or products – or markets or sells IT offerings to SMBs – understanding their unique needs based on primary research is vital to your strategy and execution. SMBs present a lucrative opportunity for technology and services vendors. However, this market is highly fragmented and rapidly changing, making it a significant challenge to gain their elusive mind share.

The Small and Midsize Businesses Cluster provides an understanding of the unique wants and needs of SMBs on a semiannual basis. With this insight, you can confidently make marketing strategic and tactical decisions that will affect the running of your IT applications, hardware and/or services business.

Market Segmentation

  • Small business
    • Less than 100 employees
  • Midsize business
    • 100 to 1,000 employees
  • Targeted verticals
    • Professional services (legal, accounting, consulting)
    • Real estate
    • Financial services (banks, brokerage, insurance)
    • Retail
    • Wholesale
    • Manufacturing (discrete and process)
  • IT spending, budgeting, buying cycles
  • Decision makers and influencers (internal and external)
  • IS department characteristics (staffing, sourcing, operations, support)
  • Overall technology purchasing requirements (pricing and products), decision criteria — services, hardware, software, and integrated offerings
  • Vendor management (channel preferences, preferred number of vendors to manage, selection criteria)
  • End-user penetration, requirements and priorities:
    • Professional services (systems integration, strategy)
    • Infrastructure
      • Devices (desktop, PDA/mobile, thin client)
      • Midrange servers, middleware, OS, desktop management tools, asset management tools
      • Networking (LAN, WAN, wireless, broadband)
    • Business applications (HR, accounting, financials, CRM, ERP, SCM)
    • Outsourcing (ASP, hosting, datacenter)
    • Internet services and technologies (Web services, ecommerce, e-marketplace, e-business adoption)
    • Security services and technologies

Key Issues

What go-to-market strategies are most successful in winning market leadership in the SMB space?
How should IT and services vendors develop and sustain relationships with the SMB market?
What are the key technologies and business trends influencing SMBs?
Which criteria are most important to the SMB market when making IT and services purchasing decisions?
What are the IT and services spending forecasts for the SMB market?
What are the attitudes of the primary SMB verticals in terms of adopting IT?
What partnerships should vendors establish to minimize customer acquisition costs?
Who influences IT and services purchases, and who makes the final decision within SMBs?
Which IT services companies target, and have most effectively deployed an SMB strategy?
What are the dominant characteristics of the SMB buyer and how can IT services suppliers respond?
Available Deliverables

Statistics: Forecast and Market Share
Detailed five-year market/product growth forecasts and detailed market share estimates with historical year-to-year market size comparisons identify the market leaders and the products/services that are driving the market.

Market Trends
Market Trends reports analyze key market events and product technology trends to present an overall analysis of the competitive landscape for the market.

User Studies
User surveys and analysis help clients understand end-user purchasing behavior and intentions, attitudes and awareness toward specific markets, products or services.

Gartner Dataquest Market Databook
The Databook provides spending and growth information across the IT/telecom industry, segmented by region and technology segment.

Focus Reports
Focus Reports provide in-depth analysis on hot topics at a level of detail relevant to specific vendors within the market sector.

Inquiry
Inquiry is available to users with Core Research Advisor memberships. The purchase of the Cluster extends the deliverables upon which inquiry may be based.


RESEARCH

Speakeasy's New Promotion Concept, Broadband Bank
By Bruce McGregor, ARS Broadband & Networking Research Analyst

High-speed broadband providers are scrambling to attract new residential subscribers on a daily basis. This chaos has generated an array of promotions offered by DSL and cable providers that have evolved over the past two years. Each promotion is based on the premise that customers will benefit from a faster service than dial-up and the cost is not much more. Speakeasy.net, an up and coming DSL provider, is trying a new tactic of attracting new broadband customers with what it is calling its "Broadband Bank" promotion. Released June 24, Broadband Bank offers new dial-up subscribers the option to invest their monthly dial-up payments towards a future upgrade to DSL service. The Broadband Bank credits dial-up customers their $14.95 or $19.95 monthly fee toward discounts in start-up costs. The credit includes set-up and DSL modem charges that could add up to a $225 savings on the upgrade to broadband service. To complement the Broadband Bank promotion, Speakeasy simultaneously introduced a new DSL service that is the company's cheapest broadband package to date, priced at $39.95 per month and featuring 200Kbps download and 64Kbps upload speeds. This new promotion is targeted at dial-up customers that are contemplating the conversion to a higher speed connection and are looking for a competitive low price. The Speakeasy promotion is based on the idea that customers who are paying between $20 and $30 per month for dial-up access, along with a second phone line at about $10-$15 per month, will probably switch to entry-level DSL that is three to six times faster and costs approximately the same price. Speakeasy's marketing idea of customized, quality service has taken a different course with this clever marketing hook to draw in dial-up users via Broadband Bank. Speakeasy is trying an inventive promotion that addresses the industry-wide issue of getting a higher percentage of dial-up users to switch to broadband. The success of this promotion will obviously be directly related to how effectively the company can market to dial-up customers.

The problem for the company is the challenge of competing in a dial-up market that is saturated with offerings from established brands such has AOL, MSN and EarthLink. There is no question that an AOL or EarthLink has far greater resources at its disposal than Speakeasy when it comes to marketing dial-up services due to brand recognition and established relationships with national retailers. Furthermore, the slowing narrowband growth at AOL and its competitors indicates that dial-up is fast approaching a saturation point, and that the national dial-up customer base will begin to shrink as more people migrate to broadband services. Finally, certain broadband providers - including all of the major cable providers and some of the large DSL carriers - do not require annual contracts for broadband service, which puts them at a competitive advantage when compared to Speakeasy, which does require a one-year commitment. Ultimately, given its limited resources and national presence, one has to wonder how much of an impact Speakeasy can make in the dial-up arena. Speakeasy might be more successful if it concentrates its efforts on its primary customer, the DSL user. It may be wishful thinking that there will be a large volume of new users who sign up for dial-up service and then switch to the same ISP's broadband service a few months later when there are so many options out there in the marketplace. A Speakeasy competitor that copies the Broadband Bank idea could achieve greater success with a larger market reach, more established dial-up product, and no consumer burden of an annual contract for when dial-up users migrate to broadband. In ARS' opinion, the Broadband Bank is a new and creative concept from an ISP that is well known for its customer service and large variety of options available to users. However, it remains to be seen if Speakeasy has the brand recognition and resources to effectively market the service to the public at large.


RESEARCH

Top-Selling Software - Business, Week of June 23 - June 29, 2002
Provided by NPD Techworld

Rank Title Publisher ASP
1 Norton Antivirus 2002 8.0 Symantec $43
2 QuickBooks 2002 Pro Intuit $219
3 VirusScan 6.0 Network Associates $32
4 MS Windows XP Home Ed Upgr Microsoft $96
5 Norton System Works 2002 5.0 Symantec $64
6 VirusScan 6.0 Pro Network Associates $47
7 MS Office XP Student & Teacher Ed Microsoft $141
8 Norton Internet Security 2002 4.0 Symantec $65
9 MS Windows 98 2nd Ed Upgr Microsoft $95
10 MS Windows XP Pro Upgr Microsoft $193

List is based on units sold by twenty-three channel partners. For more information, please contact NPDTechworld at (703) 376-6200.


RESEARCH

Get Free Market Research and Shape the Future of channel partner portals!

One of the industry's largest technology vendors wants to design and implement a next generation channel partner portal which reflects the best practices in the industry and meets or exceeds your needs. To accomplish that goal, they need to better understand your experiences with channel partner web sites and portals, your level of satisfaction with the channel partner web sites and/or portals of your technology vendors, and what resources, features and capabilities you believe are most important in a next generation channel partner portal.

Your responses are strictly confidential and will be used only in aggregate by Summit Strategies for market analyses purposes. You will not be contacted by Summit Strategies unless you agree to be by providing your contact information at the end of the survey.

If you respond by July 22, 2002, and include your email address at the end of the survey, you will receive an executive summary of the results of this study and a free 3-month subscription to SummitVision, Summit Strategies' monthly newsletter, which contains compelling articles and editorials that identify and assess the important technology trends and vendor initiatives that are shaping the technology market today.

The survey should take about 10 minutes to complete. Would you please take a few moments to answer some questions about your experiences with channel partner web sites and/or portals? To participate go to:

http://www.insightexpress.com/s/pha44146.asp

Good luck and thank you for your participation!


FROM THE COMMUNITY

Malicious Code: Laying down the Law
By Mike Menegay, Network Associates

In its thirteen-year history, McAfee AVERT (Network Associates' Anti Virus Emergency Response Team) has seen a rapid increase in the scope and severity of network attacks. Today, viruses and other forms of malicious code are moving more quickly, growing more pervasive, and inflicting more damage than ever before. This trend is prompting security vendors to continually raise the bar on technology innovation in order to stay ahead of virus writers. Meanwhile, solution providers are required to be more knowledgeable in their implementations, and customers are required to be more vigilant in seeking protection from evolving threats.

For years, McAfee Security has charted the development of computer viruses, analyzing code, dissecting engineering, and evaluating payload. Currently, there are more than 62,000 known viruses, spanning an incredible breadth of sophistication and damage potential. However diverse and complex, these viruses can be placed into a relatively simple framework, which we have named "McAfee's Laws." These laws, based loosely on Moore's Law, provide an intelligible means of describing the scope, progression and devastation of virus infection.

McAfee's First Law states that the time required for malicious code to spread to a point where it can do serious infrastructure damage halves every 18 months. The simple truth is that viruses are spreading more quickly than ever. Looking back upon several widespread Internet threats in 2001, we can see a marked rise in infection rates. At the peak of the Nimda outbreak in September of 2001, the virus was infecting 2,200 machines per hour. Code Red, a faster-moving piece of malicious code, infected 6,000 machines per hour. Most recently, the Goner virus infected an astonishing 12,000 machines every hour at its peak in December of last year, moving twice as quickly as any predecessor. Moving at this rate, Goner infected nearly a million machines in just three days.

McAfee's Second Law states that when a platform or an application gains widespread popularity, it will be attacked. Virus writers are very adept at writing malicious code that specifically targets those applications and platforms with large installed bases. The reason is obvious; virus writers can inflict much more damage this way. Popular enterprise platforms and applications, such as the Windows operating system or Outlook email client, are frequent targets of virus attacks. Their widespread usage makes them prime targets for widespread virus infection. Just as new technologies gain in popularity, virus writers develop code to attack them. Every day, McAfee AVERT discovers new threats targeted at increasingly popular enterprise applications and devices, such as instant messaging, peer-to-peer networking and PDAs.

McAfee's Third Law states that the cleverness, technical sophistication and malicious intent of virus writers increases over time. The first generation of viruses, which emerged in 1986 (prior to widespread Internet usage), required human action to spread. Viruses such as "Stoned" infected PCs because users inserted corrupt floppy disks into their machines. These earlier viruses were controlled and contained with relative ease. By 1999, however, viruses became quite capable of spreading on their own. The much-publicized Melissa virus, for example, required no user action; Melissa propagated itself, sending malicious code to everyone in a user's email address book. With viruses such as Melissa on "auto pilot," infection rates increased exponentially. The latest threat to network security is the "blended threat," a sophisticated piece of code that can damage the network in a variety of ways, including denial of service attacks (DOS), file deletion and the creation backdoors, or "windows" into the network.

Just as the sophistication of viruses has increased over time, so too has the damage they are capable of inflicting. Three years ago, the Melissa virus had a $1.10 billion worldwide impact according to research firm Computer Economics. Last year's Code Red worm, in contrast, cost businesses more than twice that amount: a $2.62 billion. Computer Economics and PriceWaterhouseCoopers forecast that by the end of this year, malicious code will have cost businesses a staggering $1 trillion in damages.

McAfee's Fourth Law states that any network or system open for business is also open to attack. This is the reality of doing business today. As such, network security must remain a paramount concern for all of us. It is up to all of us - vendors, solution provides and end users - to keep open the lines of communication between us. We must continue to work together at all stages of the security cycle - from product development to customer deployment to responsible network usage.

As I close out this article, you can bet that virus writers will continue to find and exploit network vulnerabilities, and will continue to develop increasingly complex code. As new technologies emerge, count on new threats to follow. Every new application, device and end user on a network represents a possible security breach. We are all at risk, yet we all have the power to minimize the impact of future network attacks through utilization of proper technology that is available today.


FROM THE COMMUNITY

Changing Channels: The Future is Here
By Steve Cross

The Future is here! While on vacation I had an encounter with our future at the resort's high-tech library. A 10-year old girl was using one of the four PCs that also provided for Internet access to check her email (AOL, I looked). A gentleman of my approximate age approached me to complain/gripe about having to wait for a 10 year-old saying "this kid is tying up a PC to send instant messages or something."

He was right, of course, the young girl was using her own AOL account (or user name), probably her own buddy list, and maybe instant messaging too. That's the point, and he missed it. In 6-8 years, this little girl is our new customer. When she graduates high school, starts college, buys a car, a house, a laptop, an HDTV, software, and clothing; will we be ready?

The teen of today represents a different kind of customer. For the most part, they view the Internet the way we thought about TV; like a utility…ubiquitous, and just part of the landscape. She doesn't think its "way cool." After all, she grew up with it already there. She feels the same way about using it to post her homework, send email, IM (Instant Messages), and 20 other things we all had to learn to use. Banner ads are to her like highway billboards are to us…just landscape that we generally ignore or filter out. What will she filter? Starting to get the problem?

We will find that she (and her generation) has different attitudes about things than we do; Spam probably doesn't bother her that much, creeping text on TV screens is just part of the wallpaper to her, streaming full-motion video over the web is what she'll expect, and Internet privacy is a myth to her. Either be ready for her, or go find something else to do for a living.

As she grows up, I intend to send video pitches to her smartphone, produce mini movie-quality product vignettes for her in-car video screen, and beam self-printing coupons to her PDA to drive her into stores. I'll be there to sell and market to her and her generation in novel, imaginative, persuasive ways. Care to join me?!?!

Steve Cross has been helping companies grow since before dirt was invented (seems like a long time). He can be reached at steve@crosschannel.com, 702-492-7472.


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FROM THE COMMUNITY

Tablet PC's are the real deal!
By Fred Brown

The technology sector has lacked velocity since staggering out of the dot. bomb deflationary spiral. PC's, once the driving force in channel sales have limped along without glamour for too long. Finally we've been given new life, the Tablet PC. Tablet PC's are not tricked out PDA's. A Tablet PC is not simply a "Pumped up Palm", but instead the real deal.

The new Tablet PC's provide everything you would get from a laptop and more. The user will get a fully configured PC with 30Gig+ hard drives, the latest released processors, all standard I/O and built in wireless capability. Users loose nothing in configuration between a laptop and a Tablet PC. What they do pick up is impressive.

First and foremost they will get INK, as in Digital INK, one of the cornerstones of Microsoft's new Windows XP Tablet PC Edition. INK is not just another handwriting recognition attempt but the realization of the dream of the combination of analog methods of communications (note taking and handwriting) and the personal computer. The old saying, "seeing is believing" has never been more appropriate when trying to describe the benefits of Microsoft's new Tablet PC operating system. Whether you are writing your notes on the screen, saving or searching on those words, responding to an email with a quick handwritten note or filling out a form in your own handwriting and seeing your scribbles turn into Times New Roman in the right box, this software is stunning.

Microsoft's new Tablet PC version is not an upgrade to XP but rather an entirely new chapter in the personal computer industry evolution and will provide a much-needed boost to revenues in the channel for those who are ready and prepared to take advantage of this paradigm shift. You cannot buy this new version of XP. It's only bundled with a Tablet PC. ISV's are creating new versions of their software to take advantages of the new powerful capabilities of the Tablets. All segments of the computer industry will be invigorated.

All Tablets are not created equally. There will be plenty of room for innovation. Some Tablets will have 10.4-inch screens, some 12.1-inch screens. Most will come with a keyboard (Blue Tooth, IR or attached) but some will not. The form factors will vary, the operating system will not. There has been a debate over the type of screen to be used, electro magnetic (pen), or resistive (touch). Microsoft ended that debate ……. The winner is, electro magnetic. The elegance of the "pen" based INK far exceeded the result of "touch" in recognition, user acceptance and application potential. Any manufacturer that wants the Microsoft Tablet PC version of XP must be pen based. Any company foolish enough to go after this market with a touch screen will have their head handed to them on a real "tablet". There may well be a niche market for touch screen laptops but they are not Tablet PC's if they are not based upon Microsoft's Tablet PC Edition of XP.

The market for Tablet PC's is both vertical and horizontal. The horizontal market is anyone using a laptop today. At a price point of around $2,000.00 it is inconceivable that anyone buying in the mid to upper price category for laptops would buy anything other than a Tablet PC. The vertical markets for the Tablet PC will be everything from hospitals, engineers, hospitality, real estate, legal and any number of other markets.

These vertical markets for the Tablet will spawn an array of new applications that will stimulate the ISV's and Vertical VAR's. Companies like Adobe, ScanSoft, Franklin Covey and others are already fast on the uptake in this market. There is a major challenge standing as an obstacle to the success of this breakthrough technology. That challenge is for Microsoft, the Tablet PC manufacturers and ISV's to provide sufficient education and awareness so the consumer will be able to make a clear distinction between the Tablet PC, traditional laptops and PDA's. There exists a subtle yet pervasive assumption in the user community that Tablets are not full PC's but souped up PDA's. This assumption or more accurately misassumption, must be met head on with focused marketing, education, awareness, demand creation and channel penetration. Clearly making the distinction between the contenders will assure the Tablet PC takes it place at the head of the table and show us all the beginning of something wonderful.

Tablet PC's are coming, are you ready to cash in on the boom?

Fred Brown is President of Brown & Associates, specializing in Marketing & Sales Consulting for the Digital Age. He can be reached at fbrown@browna.com.


FROM THE COMMUNITY

The SMB Channel Community Services Job Board

We are looking to hire someone for Market Development activities for our products. Primarily they will be responsible to identifying and engaging with new channels. During that period they will also be responsible for recruiting early adopters for that channel/market. Once engaged they will transition that channel to our sales team to grow. Must have a minimum 5 years experience in developing a channel program with significant revenue upside. BS required, MBA preferred. Contact: Sandip Gupta, Vice President, Business Development at www.ensim.com.

(Courtesy CyberMartini). iCOM Consultants, Inc., is pleased to announce a recently retained search for an OEM Sales Director. Our client is based in the Northern Calif. and our OEM director can be based in either Northern CA or Denver. Highlights: Promote and build relationship with OEM Partner's field organization. Drive revenue and sales by executing to account strategies. Create and deliver the Company's OEM Partner value add message, develop organization charts for field, understand management and compensation models, understand regional strategies, work with geography marketing, create and manage: collateral, and training strategies, events, sponsorship, education, drive demand creation through development of programs, understand OEM channels organization, build relationships between the Company and OEM management. Mercedes Chatfield Taylor (mercedes@icomconsultants.com).

BusinessLaunch Inc. needs people with cross-functional product launch experience (especially in engineering, operations, and manufacturing) and people with industry marketing experience (especially healthcare, retail, gov, and financial services). Please send email to jdavis@businesslaunch.biz.

Tell 'em ChannelMedia sent you!


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