September 10, 2010
Intel Corporation just acquired McAfee on 20th August 2010.
What should we make of that? Does it mean the next generation of antivirus will come on a chip from Intel, well why not…doing that comes with a few advantages to Intel:
- Because antiviruses need to be updated all the time, it means Intel will have a good reason to access and receive information from all the PCs using these new chips.
- Maybe, but what if Intel designs a chip that carries out all of the incredibly complex algorithms and other heuristic calculations that invariably slow down our PCs? Rather like Macs, iPhones and iPads have always handled all display calculations on a separate chipset, leaving all the main processor gigaflops to the applications. Wouldn’t it be great if we didn’t have to hang around while our antivirus sucks up precious memory and processor power to check the file we just downloaded…
As the Cloud builds up steam, Intel are preparing for the thin, thin client and the powerful, powerful server because they know that security will be the defining factor in the success of Cloud Computing.
When we access all our files, music, videos, applications from the Cloud…through what will basically be a terminal, an Antivirus/Firewall chipset will be the only solution, because if you have to download it from the Cloud, who knows what new virus will come with it every morning…
Clever move, Intel!
July 26, 2010
Look out George! Next time, you might get hit by an EMC backup server falling out of a cloud.
Just before the piano fell
Companies seem to have voted with their feet and EMC recently announced they are pulling their “Cloud backup service” Atmos out of the Cloud because not enough customers are interested.
Why on earth would one need Cloud backup if one has Cloud applications!? In fact, come to think of it, EMC should be offering the exact opposite: old fashioned physical backup for Cloud applications…It just goes to show that Cloudwashing isn’t enough. Before you put something in the cloud and offer it to your clients, one would be advised to check whether there is any demand for it.
July 26, 2010
An IBM 370-168 mainframe, state of the art in the early 80's
Should we be calling IBM Big Green?
So here we are back to 40 years ago when IBM’s revenue mainly came from renting computer power to customers who connected their thousands of 5250 or 3270 terminals to mainframes using unbelievably slow modems that were each the size of a small desktop computer.
At the time, I was a Computer Science student and spent some time as an intern at IBM France. I participated in installing what was then the largest mainframe in France: an IBM 370/168 (it later became the zSeries) that had a whopping 512 Megabytes of RAM (yes kids…512Mb…stop laughing please…) and stacks of 3330 removable hard disks that could each store 200Mb of data on 8 platters (stop LOL).
Guess what: IBM has just announced they are reviving their System z strategy with the zEnterprise 196.And nobody is laughing this time.
What has changed?: it has 3 Terabytes of RAM,up to 96 processors, reams of blades and can manage loads of P and X servers. IBM says 30% of all servers are running Linux, and that the zEnterprise should soon support Windows clients. 40 years ago, the internal bus of an average computer probably ran slower than today’s high speed ADSL, SDSL etc…(why have you stopped laughing?)
Although total cost of acquisition (TCA) will be higher then for servers, TCO is lower within 3 years. Not to speak of the green side of things, these machines are much more energy efficient than a pile of servers.
If you still think Cloud Computing is a pie in the sky, think again because IBM certainly want to be at the forefront of the next paradigm shift.
July 30, 2008
How will you measure your business?
Selling though a channel fundamentally changes your access to market intelligence. If you are not prepared for it, you will lose visibility of where your products are going, who is buying your products, what are they purchasing, how many and when etc…Channel partners are usually happy to share most of this information with you, provided they are certain it will not be used to play against them. If they don’t trust you, they will share the information after the sale has occurred; if they trust you, they often involve you in the sales process and always inform you of what they are working on. It all comes down to whether your sales commissions are “route-to-market-neutral”, which means that the sales people get a commissions regardless of who invoiced the customer.
- Does your distribution contract require POS (Point of Sales) reporting? This is something you can insist on.
- Most distributors expect to see their reporting costs paid for (0.5%)
- Do you know what reports you need and how often you would like them?
- Have you developed or acquired the tools to collect and analyse the information
- Have you identified the people who will be responsible for producing the market intelligence?
July 1, 2008
Part 3: How will you roll-out your plan?
Working through a channel doesn’t mean you can just relax and wait for it all to happen. On the contrary, your initial efforts will need to be significant if you want your channel sales to take off.
Build the right team to work with your channel
- Consider recruiting an experienced channel manager rather than promoting one of your direct sales people
- If you can afford it, create a channel marketing position
- You can adjust your order management team
- Channel partners are good at using on-line tools. Are yours ready?
Is your finance organization ready for a different business model?
- You will be collecting larger amounts with different payment terms and different payment “habits”. Resellers are often strapped for cash…
- You will be paying out money or making credits in the form of Co-op advertising support or Market Development Funds. This doesn’t happen in a direct model
- You might need to pay finder fees to people you aren’t actually trading with such as Influencers (this concept is one of the most difficult for financial departments to cope with)
Can your marketing policy and organisation handle the requirements of your channel strategy?
- You probably need to re-balance your marketing budget
- Your partners will expect support through co-operative and market development funds (Co-op and MDF in channel lingo)
- At some point, you will need to build your brand and product awareness in the channel, should you plan a Marcom budget for this?
- How will you help your channel promote your products on their web sites?
If you actually ship stuff:
- Check your packaging (cartons, cases, pallets, containers, etc…)
- Check your part–numbers (UPC codes are sufficient)
- Does your price list provide for volume orders?
- Are your logistics ready for a change of pace?
- Do need the logistics you had up to now?
If you sell software:
Can your systems report by whom the revenue was generated
If you provide services
Can your channel partners resell them (do they have a part number)?
June 26, 2008
Part 2: What is your plan?
Building a channel requires a long term commitment. You need to know where you are starting from and most of all, where you want to go. Pending that, you will be able to prepare for some of the key issues you will need to address on the way. Continuity and consistency are key to a solid relationshipHave you thought through and documented short, medium and long-term plans?
- Will you move directly to a full indirect model? (no more end user invoicing).
- Do you plan to make that move in the coming years
Is your sales compensation policy compatible with indirect sales model
Your direct sales staff must not lose-out if a customer buys from a channel partner. Otherwise they will play against your channel and your partners will walk away
Your channel partners must not see your direct sales force as the enemy
Have you thought through your total pricing and discount policy
Benchmark it against your competition’s
Do you have a pricing and discount policy that will encourage your new partners to reduce your own costs (that is why you share part of your margin with them)
Build a realistic value proposition that your Account Managers will be able to defend in front of a seasoned reseller principal
“Right-size” your channel recruitment strategy:
Don’t go berserk and recruit every partner you can find
How many partners can you handle, should you recruit a distributor?
Should you recruit one or several distributors?
June 18, 2008
Can you tick all the boxes before jumping into the channel?
In the last 10 years, waning ICT growth in the enterprise segment has forced most actors to re-examine their routes to market in order to make sure their products and services are available where their prospective customers expect to find them and where the real growth is. Without necessarily taking a “bottom-up” approach, the whole ICT industry has come to the conclusion that it would only be able to access certain segments via an indirect channel. This is because average size companies are buying a lot of ICT products and services but they rely on their channel partners to act as an outsourced ICT department. Certain major IT manufacturers have recently made their “coming out”, confirming a strategy they weren’t necessarily admitting to in the recent past.
This short series is built from experience and attempts to list a number of areas you need to have thought about before you jump into the channel.
Part 1: Do you have a strategy?
For a start-up business, this is a founding decision and you will be building your whole business model on your route to market strategy. But if you are already selling direct, you need to make sure this fundamental move is not going to unbalance your whole business, resulting in a potential collapse of your overall sales and often causing frustration within your own organisation and amongst your newfound partners and existing customers.
- Why are you making this move?
- Can you give your prospective partners a good reason for the change?
- Does everyone in the company understand the reasons?
- What is your vision?
- Your new partners will be reassured to see that you actually have one
- Working with partners requires long term investments on both sides
- If your potential partners don’t trust you they won’t play
Coming soon: What is your plan?