RCPmag.com ✱ November 2009
Some of the IT industry’y s top innovators are within striking distance of retirement. A llookk at whhatt thhat means ffor them, theiir Passing companiies and the chhannell.
PLUS Building a Business on Dynamics CRM Online The MSP Market: 5 Questions (and Answers)
NUMBER 11 SMB Nation Steps Away from Redmond DeGroot on the Promise of Services Ready VOLUME 4 ✱ VOLUME Project8 7/3/08 12:42 PM Page 1
Project8 7/3/08 12:44 PM Page 2
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COLUMNS
DIRECTIONS: Paul DeGroot Ready, Set ... Wait and See ...... 40
SPECIAL PULLOUT SECTION Partner’s Guide to Backup and Recovery 16 Parsing a spate of recent IT industry reports shows bright spots amid the general gloom of the storage market— especially in the cloud.
FEATURES 16 Passing the Torch 24 Some of the IT industry's top innovators are within striking distance of retirement age. We look at what that means for them, their companies and the channel. 24 Racking up Online Deals For Pelagic Solutions Inc., launching a business atop Microsoft Dynamics CRM Online leads to 78 deals in a year.
30 5 Questions About the MSP Market Steve Bowles The essential questions parnters have about the managed services of Pelagic market have some surprising answers. It may still be a good time to Solutions Inc. is become an MSP. building success atop Dynamics CRM Online.
IN EVERY ISSUE 4 RCPmag.com 8 Channel Watch 39 RCP Index COVER ILLUSTRATION BY JON VALK > RCPmag.com NOVEMBER 2009 Redmond Channel Partner 3
What’s ChannelRedmond Partner
RCPmag.com OnLine November 2009 + Volume 4 + Number 11 EDITORIAL STAFF Vice President, Editorial Director Doug Barney @RCPmag.com Editor in Chief Scott Bekker Managing Editor Wendy Gonchar Associate Managing Editor Katrina Carrasco ONLINE EXCLUSIVE BLOGS ART STAFF Creative Director Scott Shultz ESJ.COM SALARY SURVEY Senior Graphic Designer Alan Tao Top IT managers who work with RCPU ONLINE/DIGITAL MEDIA mainframes can expect to earn Editor, RCPmag.com & signifi cantly more than other Stay tuned to channel Executive Editor, New Media Michael Domingo IT executives, according to the news with the Redmond Executive Editor, Web Initiatives Becky Nagel latest salary survey by ESJ.com. Online News Editor Kurt Mackie Channel Partner Update Of ESJ.com's readers—a mix Editor, RCP Update Lee Pender Associate Editor, Web Gladys Rama of mainframe, data center, e-mail newsletter, written Web Producer Shane Lee server and other enterprise by Lee Pender. Web Developer Rohan Christian IT professionals —CIOs and ON THE RELEASE OF MICROSOFT vice presidents in mainframe SECURITY ESSENTIALS environments reported the Given Microsoft’s record (or lack thereof) of releasing highest average base salary President Henry Allain quality anti-virus wares, we’re not quite ready to scarf of $232,700 per year. Those Vice President, Publishing Matt N. Morollo down Microsoft’s free bowl of sugary Security Essentials, Director, Marketing Michele Imgrund with the same title who work and we fi gure that most partners and users won’t be, Online Marketing Director Tracy S. Cook in AIX/Unix environments either. What’s more disturbing here, of course, is that averaged $173,500, followed by Microsoft seems once again to be trying to undercut $148,600 for those in midrange some of its most important partners and dominate environments and $114,600 President & yet another market. In this case, though, Symantec, Chief Executive Offi cer Neal Vitale in non-mainframe Windows McAfee and friends aren’t likely to be too worried about Senior Vice President & environments Chief Financial Offi cer Richard Vitale Redmond’s play -- for now. Still, it’s not the nicest In general, the survey found Executive Vice President Michael J. Valenti gesture Microsoft ever made to its third-party partners, the average CIO/vice president but then Microsoft didn’t get where it is today by being Vice President, Finance salary for 2009 is $150,340, up nice. FindIT code: PenderA1109 & Administration Christopher M. Coates slightly over 2008's average Vice President, Digital Media, Audience Marketing & of $149,000. However, the aver- Web Operations Abraham M. Langer age bonus earned with these ON MICROSOFT, GOOGLE AND LOS ANGELES Vice President, titles dropped from $28,500 to [It] has come down to a choice between two contenders: Information Technology Erik A. Lindgren Microsoft Offi ce and Google Apps ... From what we can Vice President, $18,000 this year. Attendee Marketing Carmel McDonagh tell, this isn’t just a Microsoft-Google battle. This is an Donwload the PDF version Director, Print Production Jenny Hernandez of the 2009 survey to read the on-site vs. cloud computing showdown. This is old-school, entire breakdown by titles. reliable Offi ce vs. cheaper, intriguing but still somewhat Chairman of the Board Jeff rey S. Klein FindIT code: ESJSS enigmatic Google Apps. FindIT code: PenderB1109 Reaching the Staff Staff may be reached via e-mail, telephone, fax, or mail. BY THE NUMBERS A list of editors and contact information is also available online at RCPmag.com.
E-mail: To e-mail any member of the staff , please use the following form: [email protected]
Framingham Offi ce (weekdays, 9:00 a.m. – 5:00 p.m. ET) Expected amount of managed-services Telephone 508-875-6644; Fax 508-875-6633 $ spending by small and midsize 600 Worcester Road, Suite 204, Framingham, MA 01702 businesses* worldwide in 2009. Irvine Offi ce (weekdays, 9:00 a.m. – 5:00 p.m. PT) 14 . 3 * DEFINED AS COMPANIES WITH FEWER Telephone 949-265-1520; Fax 949-265-1528 billion THAN 1,000 EMPLOYEES 16261 Laguna Canyon Road, Suite 130, Irvine, CA 92618
Corporate Offi ce (weekdays, 8:30 a.m. – 5:30 p.m. PT) Telephone 818-734-1520; Fax 818-734-1528 SOURCE: TECHAISLE 9121 Oakdale Avenue, Suite 101, Chatsworth, CA 91311
Redmond Channel Partner The opinions expressed within the articles and other contents FINDIT CODES herein do not necessarily express those of the publisher You’ll see FindIT codes embedded throughout Redmond Channel Partner. Simply type these into the FindIT code box on any RCPmag.com page and you’ll jump directly to the desired information. (Note that all FindIT codes are one word, and they are not case-sensitive.
4 Redmond Channel Partner NOVEMBER 2009 RCPmag.com Project2 9/14/09 10:14 AM Page 1
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here are literally hundreds During that three-year period of thousands of small beginning in 2005, Haurey’s Exigent businesses in any given Technologies experienced 64.9 percent state, let alone the country. revenue growth; out of 658 IT com- So when the 2009 panies nationwide, he was counted “Inc. 5000” list from Inc. among the best. But he took the TMagazine came out and Daniel magazine fete and the business Haurey’s company was on it, he was success in stride and with humility. pleased because his company had “It’s all about devoted staff members grown, based on revenue growth from that are passionate about customer 2005 through 2008, at a rate that only service and continual improvement, 4,999 others had, according to the especially Gerry Busardo, our service list criteria. delivery manager,” Haurey said at the Project1 10/16/09 8:17 AM Page 2
“With Zenith we collectively thought that the combination of features and functionality, mixed with a reasonable pay-as-you-go model made for an excellent value.” —Daniel Haurey, President and CEO, Exigent Technologies
time, adding that his fi rm’s focus on Haurey says there’s a large demand “I personally spoke to several Zenith the recession-resistant health-care sec- for electronic medical records imple- partners that were already quite happy tor had been particularly benefi cial. mentation and in order to chase that with the platform, and these were But as quickly as he gained recogni- business, Exigent has and will continue people whose opinions I valued,” he tion, like any accolade or distinction, to streamline its own client services says. “I think the good references really Haurey hung up the magazine clipping process. made the diff erence. in a place where it could provide inspi- “We found that physician practices “What we have in Zenith is a power- ration and spent the remainder of 2009 are grossly underutilizing technology. ful platform that we can easily extend doing what he’d done before the hype. They’re essentially using the same to our customers without the hassles “It’s a 12-year-old company, so system they used 50 years ago, and burdens that come with some of we’ve been around” Haurey says. “I’d antiquated paper charts.”” he explains. the other competing products. been working in consulting at a “The big movement right now that “I think the future for IT services is corporation and I’d always wanted to we’re capitalizing on is the conversion a promising one,” Haurey adds. “In the start my own fi rm and always had an from paper to an electronic medical short term, we’re seeing the eff ects of entrepreneurial spirit about me. One record. confusion in the marketplace among day when one of my assignments was This is where managed services consumers. Confusion usually leads to ending, I decided rather than go to partners such as Zenith Infotech price and margin pressures. But I see a another one, I would form my own Ltd. come in. Haurey believes Zenith bright future for the managed services company.” gives his company “capabilities that model as a whole.” Back then Haurey wasn’t thinking our customers want at an aff ordable Haurey believes it’s clear that about verticals to specialize in or what price. In the local health-care market, Zenith will be one of the companies to managed services partnerships customers want services from a single help foster that growth. would do for his business; he was just source and that’s what we were able to “It’s increasingly clear to me that the consumed with scooping up all the do with Zenith.” leadership [at Zenith] has their fi nger clients he could. on the pulse of the partner community.” “There were many small and midsize What made Exigent companies that didn’t even have a LAN choose Zenith? at the time, so we became technology “We’re a ConnectWise partner, and Sponsored by generalists. With the expansion Zenith always had an excellent pres- of the Internet came a plethora of ence at the annual summits in Florida,” opportunity. There was really no need he remembers. “My technical staff to specialize.” looked at a few diff erent options very objectively. We collectively thought Leveraging Streamlined that the combination of features and Services Off erings functionality, mixed with a reasonable As time went on, Exigent began to pay-as-you-go model made for an specialize in health care, which is now a excellent value.” focus for the company, given it’s one of What clinched the deal is what VISIT ZENITHINFOTECH.COM TO GET STARTED! the more recession-resitant industries. Haurey likes to call the “social proof.”
ChannelWatch
Dissecting the Dell Deal BY SCOTT BEKKER
n the next few months, Round Rock, Texas-based Dell is expected to close the deal to buy Plano, Texas-based Perot Systems for $3.9 billion, becoming eff ectively a company doing $8 billion a year in services revenue.
During the conference call announcing the deal, Dell Chairman practice for us has been growing expan- and CEO Michael Dell made two statements that are, at face value, sively and we expect that will probably rather alarming to solution providers. In one, he said that, once continue to grow with the changes, purchased as a subsidiary, Perot Systems will be the fl agship especially in the [United States] around I foundation asset in services around which all of Dell’s services the ARRA,” Altabef said. off erings will be built. There are other important aspects to the In the other statement, Dell responded to an analyst’s question deal. Dell could conceivably leverage the by saying Dell did indeed expect to chase after clients of all sizes, 23,000 Perot Systems associates and grow including small clients, through its Perot subsidiary. the 27 percent of Perot Systems revenues Is this deal a bad sign for solution providers with less than $8 in the commercial sector into a broad billion in revenues—or $4.1 billion, if you want to leave out Dell services team that makes Dell better at support revenues? Is Dell wiping out, in one fell swoop, all of the going head-to-head with the Electronic goodwill it’s been building up through its new channel push in the Data Systems-powered services arm of last two years? Let’s play that favorite channel parlor game: Can Hewlett-Packard and with IBM Global Dell be trusted? Services. But fi rst, Dell/Perot Systems will I’m going to say this deal is less dangerous than it may seem at fi rst be busy snapping up low-hanging blush to solution providers, at least for those who aren’t already revenues in health care. being pushed around by Perot Systems in the health care market. For smaller solution providers, the Dell Perot Systems generates 48 percent—the largest share—of its partner program’s positive recent decision revenue from health care, and Michael Dell termed the turnkey access to reduce the deal registration threshold to that market one of the most “attractive elements” of the deal. for U.S.-based solution providers from Peter Altabef, president and CEO of Perot Systems and the man $50,000 to $15,000 is a more immediate, who would be running the Perot subsidiary if the deal goes and important, development. • through, told listeners on the call: “We’re probably the largest IT services provider both in terms of number of hospitals as well as in terms of revenue across the globe.” The company operates in 1,000 hospitals and provides physician services directly to 30,000 doctors and indirectly to about 200,000 doctors, Altabef said. Then he said the magic letters: ARRA, or American Recovery and Reinvestment Act of 2009. Getting in on that federal stimulus money for health care could conceivably be one of the few major growth opportunities of the next 12 months. “The physicians
8 Redmond Channel Partner NOVEMBER 2009 RCPmag.com SPECIAL PULLOUT SECTION
PARTNER’S GUIDE TO BACKUP AND Parsing a spate of recent IT industry reports shows bright spots amid the general gloom RECOVERY of the storage market—especially in the cloud. By Scott Bekker RCP FEATURE | CLOUD BACKUP
lmost every part of the IT industry has suffered this year, and storage solutions have been among the hardest hit segments. But it’s not like the world is generating less data that needs to be stored, backed up and Arecovered. There are some encouraging signs appearing in market research reports that things are turning around for the storage sector in the IT industry. And analysts say the backup and recovery market appears to be one of the fastest-growing areas within the general industry move toward cloud computing. Channel partners looking for growth areas over the next fi ve years will want to be positioned to help guide customers toward the backup and recovery solutions in the cloud, should customers not want them on-premises. Meanwhile, another recent study shows that small and midsize businesses (SMBs), especially, need help for backup and recovery. The trick, and the role of good channel sales eff orts, lies in showing customers how unprotected they currently are.
2 Redmond Channel Partner NOVEMBER 2009 RCPmag.com Any storage software markets doing better in Q2 than in Q1? Data protection and recovery. That sector saw 3 percent growth over the previous quarter.
A TOUGH ENVIRONMENT protection and recovery: That sector saw 3 percent Gartner Inc.’s worldwide forecast for IT spending in growth over the previous quarter. Device manage- 2009 made headlines in July, when fi rm cut its estimate ment and archiving software also saw small gains in further. The extent of the pain for all of 2009 would be a Q2 compared to Q1. 6 percent decline from 2008 IT spending to less than Even within the battered storage-hardware market, $3.2 trillion worldwide. Among that spending, hard- there are a few sweet spots for vendors and their ware, which includes a large part of the storage market, partners off ering the right technology at the right price. was expected to take a 16 percent hit and remain fl at at The entry-level price band of up to $15,000 was strong that depressed level through 2010. Software was for both iSCSI SAN and Fibre Channel (FC) SAN, IDC forecast to decline 1.6 percent in 2009, and then slowly found. The iSCSI SAN growth in that price range was come back in 2010 with a 3.2 percent gain. 57 percent year over year (and was 27 percent year Verily, much of that seems to have come to pass, over year across all price bands). FC SAN grew 67 especially on the storage side. In a pair of September percent in the low price band. “Customers continue to reports, market researchers at IDC pored over second demand enterprise-level network storage at a more quarter data from storage vendors. The fi ndings economically friendly price point,” Conner said. showed that the storage sector came in for a special Although revenues generally declined in the storage beating through the end of June. hardware and software markets, one thing isn’t On the hardware end, the pain was intense. Factory dropping on a year-to-year basis: the amount of orders for external disk storage systems fell 18 percent storage that customers are using. According to IDC, in the second quarter of 2009. Total disk storage total disk storage system capacity reached 2,345PB system factory revenues dropped nearly 19 percent, in the quarter, a 15 percent jump. which IDC attributed to weak server systems sales. The market for open storage-area networks (SANs) SILVER LININGS fell nearly 24 percent, and the network-attached Where the traditional storage industry has a few storage (NAS) market dropped almost 7 percent. bright spots, which may or may not improve over the “The enterprise storage system market continued to next few months, the area of cloud computing seems feel the impact of current economic conditions, to be nothing but upside. posting its third straight [quarter of] year-over-year According to a recent study by analysts with decline[s],” Liz Conner, an IDC research analyst, said Forrester Research Inc., Software as a Service (SaaS) is in a statement describing the bloodletting. beginning to make serious market gains. In storage software, which includes data protection “SaaS applications have advanced beyond early and recovery, IDC also saw a substantial decline, but not market applications in human resources and CRM to as much of one as hardware experienced. The storage become a game changer in the enterprise software software market dropped nearly 10 percent in the market. SaaS adoption continues to increase, and it is second quarter, compared to the same quarter a year ago. now relevant for a wide array of applications,” analyst Liz Herbert said in describing a report released this BRIGHT SPOTS IN STORAGE year called, “TechRadar for Sourcing & Vendor But storage software is actually starting to look Management Professionals: Software as a Service.” slightly better, even in Q2. “The storage software In an eff ort to help end users plan for their next market is slowly starting to recover with positive decade of investments, the report identifi ed growth over the fi rst quarter of 2009,” IDC analyst technology areas that should see the widest adoption Michael Margossian said in a statement describing in the cloud. the results. One market on the increase, quarter-over- The losers in the report were business intelligence, quarter, was replication, which increased 5 percent. described as “unproven,” and integration, from Any other markets doing better sequentially? Data which fi rms “should not expect any magic integra-
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 3 RCP FEATURE | CLOUD BACKUP
“Particularly for small and midsize businesses (SMBs), PCs and remote location, online backup has already attracted strong interest.” Forrester Research Inc.
tion solutions.” Among the winners were the usual development/deployment, infrastructure software, trio of collaboration, Web conferencing and CRM, storage and servers. In 2009, IDC estimates that which already have substantial markets. Three storage will account for 9 percent of the total other winners in the Forrester report were Human worldwide IT cloud services revenues pie. By 2013, Capital Management, IT Service Management and the new IDC research will say that storage will online backup. account for 14 percent of the pie. Of online backup, Forrester noted, “Particularly But because that overall cloud pie is growing, the for small and midsize businesses (SMBs), PCs and storage revenue opportunity is increasing from an remote location, online backup has already attracted estimated $1.5 billion in 2009 to a forecast of $6 strong interest.” The fi rm did off er a caveat, which billion in 2013. So while the overall cloud market is should keep traditional backup and recovery in the expected to be 2.5 times bigger, the storage piece is picture for years: “One area of concern is recovering expected to get four times bigger. large quantities of data in a short time frame.” Researchers at IDC also see cloud computing A RIPE MARKET taking off with storage near the forefront. At press In backup and recovery, many market trends are time, the fi rm was preparing a forecast for 2009- converging on SMBs. Forrester noted that SMBs are 2013 called, “Cloud Services: Global Overview.” a key audience for online backup, and IDC’s research IDC analyst Frank Gens previewed the forecast in even into the poorly performing on-premises storage October in a blog entry that included several charts. hardware market found that entry-level priced IDC sees cloud services revenue hitting $17.4 systems were doing well. billion in 2009, and projects that revenue will rise to A recent survey of SMBs by Applied Research on $44.2 billion in 2013. IDC released a similar report behalf of Symantec Corp. found that small compa- last year. “The revised fi gures are still in the same nies are relatively unprotected against data loss. In ballpark as last year’s forecast, although they refl ect August and September, the fi rm surveyed about 300 about a six-month revenue knock back from what North American companies. Most of the respondents would have been expected from last year’s forecast, were SMB companies with 10 to 499 employees, due largely to the global recession and, to a lesser while some respondents were customers of SMBs. degree, to better market tracking and tightened Some 58 percent of survey respondents reported defi nitions,” Gens wrote. “The fi ve-year growth that they did not have a plan in place to deal with outlook remains strong, with a fi ve-year annual business disruptions such as virus or hacker attacks, growth rate of 26 percent-over six times the rate of natural disasters that cause damage to facilities or traditional IT off erings.” lengthy power outages. Cloud services will account for about 10 percent of When it came to the relatively preliminary overall IT revenues by 2013, IDC is predicting. But disaster recovery step of backing up data, the survey Gens contended that it’s dangerous for suppliers to found that the average SMB backs up only 60 look at the market from the perspective of percentage percent of its company and customer data. The of revenues. “It’s a rear-view mirror view: it misses frequency of those backups was also alarmingly low. the impact that cloud services off erings will have on Only 20 percent reported backing up data on a daily net new growth in the IT market,” he wrote. Of $27 basis. Nearly half (48 percent) performed backups billion in net new IT revenue in 2013, cloud services once a month or even less frequently. will account for 27 percent. Storage is one of the main components of the cloud A TRICKY SALE services future that IDC envisions. IDC is tracking fi ve While that data would suggest that selling backup main product/service types: applications, application and recovery solutions to SMBs should be a cinch,
4 Redmond Channel Partner NOVEMBER 2009 RCPmag.com 1109rcp_Asigra_Insert 10/15/09 9:44 AM Page 1
RCP FEATURE | CLOUD BACKUP
While IDC expects the overall SWINE FLU cloud services market to get 2.5 AND DISASTER times bigger in fi ve years, the fi rm RECOVERY expects the storage piece of it to The H1N1 outbreak gives solution get four times bigger. providers an unprecedented opportunity to help clients think through their disaster recovery needs. SMB attitudes toward backup and recovery show that vendors probably need a lot of help from persuasive channel partners to By Joanna Krotz get any solutions into SMB accounts, let alone the right When it comes to data protection and recovery, solution. The Applied Research survey found that 81 percent major issues in the news off er teachable moments were somewhat or very satisfi ed with their disaster recovery to start conversations with customers about plan, even though most of those same fi rms didn’t have a plan. wide-ranging disaster recovery plans that include An almost identical 82 percent reported feeling that their backup and recovery as an element. computer and technology systems were either somewhat The heightened anxiety about H1N1 translates protected or very protected. into timely risk-and-reward opportunities—as well A strong majority (62 percent) was also confi dent that their as responsibilities—for IT providers and consul- customers would wait around for them to get their systems tants. Whether or not you’ve ever broached the fi xed in case of a problem. In that group were 13 percent subject, it’s a good time to set up meetings with answering that they expected their customers would “wait customers to talk about possible challenges and patiently” and 49 percent saying that customers might call to how they can protect business operations. get what they could but otherwise would also wait patiently for To begin, Mike Emerson, director, IT Security, systems to come back online. Governance and Business Continuity at Citrix Customers of SMBs in the survey had very diff erent attitudes Systems Inc. in Ft. Lauderdale, Fla., suggests about downtime among their vendors’ computer or technology that you advise clients that such planning is systems. Nearly a quarter of the customers reported that in the past, mostly common sense. they had evaluated another vendor as a result of downtime by one “You want a business continuity plan in place of their SMB vendors. Further, they estimated the cost to their that’s short and clear. It ought to have specifi c business of SMB vendor outages at $16,000 per day on average. trigger points that are actionable from a team perspective,” says Emerson. “You don’t want 300 GRABBING AN OPPORTUNITY pages of fl uff that no one can remember.” Storage needs continue to grow, even in a recession, at a And since you can’t predict which critical double-digit rate, and data continues to be more valuable to operations or which essential staff will be out of every business rather than less. Partners looking to tack a commission or unavailable, focus on “redundancy” strategic practice area onto their business could do worse and “fl exibility.” In other words, businesses need than to add backup and recovery. With economists for the to cross-train skills and create several backup most part expecting the economy to pick up, even hardware scenarios beforehand so if one fails, the other and traditional backup and recovery software solutions are kicks in. seeing some areas of positive growth. Meanwhile, vendors looking to grab a share of IDC’s Labrador-Retriever Approach estimated $6 billion storage opportunity in the cloud by 2013 No doubt, in this tough environment, customers will need help from partners. Channel companies that can will resist the idea of investing dollars, time and develop eff ective ways to show how vulnerable their SMB talent in what-if scenarios. “Frequently,” says customers are to data disruptions and that can eff ectively Lew Smith, manager of virtualization solutions at advise customers of all sizes on their best option among cloud Interphase Systems, a Gold Certifi ed Partner in and on-premises backup and recovery solutions, will be Plymouth Meeting, Pa., “the initial reaction when positioned to grab a piece of that growth themselves. • an organization is looking to take precautionary steps against the impact of H1N1 is: How much is
Scott Bekker is editor in chief of RCP.
6 Redmond Channel Partner NOVEMBER 2009 RCPmag.com this going to cost?” In response, he a CISSPI-ISSMP certifi ed advisor and various constituencies in specifi c ways— emphasizes the price of doing nothing. president of ContingenZ Corp. in Los board members will have diff erent concerns “What’s the cost of losing business and staff Angeles. “Then, plan for how you will than customers. Businesses also will need in the long run if there’s no ability to buff er work around the loss or inability if one or redundant channels, including toll-free the impact?” But before recommending more key staff can’t come to the offi ce.” phone numbers, microsites or intranets, any services or products, Smith encourages Communicate early and often. In e-mail distribution, call-list protocols and clients to “re-evaluate systems that they contrast to one-time catastrophic events, the like. have and to think about utilizing them in say, a tornado or power blackout, a fl u diff erent ways.” outbreak will likely have rolling and Likewise, when marketing your services extended impact. Employees may be in and Staying on the Right Track for pandemic preparedness, or, indeed, for out over several months. Some may become Every shop has diff erent priorities and disaster planning generally, the “Labrador- fatally ill. Early communication will reduce procedures, but the goal remains straight- Retriever approach is better than the anxiety and head off rumors. “The first step forward: Keep everyone in the loop and on Bulldog one,” suggests Nick Cavalancia, vice is to make sure the company actually has the right track. president of Windows Management for up-to-date contact info for all employees Evaluate and reinforce IT security and ScriptLogic Corp., a Gold Certifi ed Partner and outside contributors as well as an remote-work capabilities. Given how based in Boca Raton, Fla. “Deliver some integrated system and protocols for numerous, customized, secure and upfront value and practical help that will reaching everyone,” advises Vicki Wheaton, aff ordable telework and remote-access keep customers productive rather than employee communications manager at solutions have become, IT recommenda- shoving solutions, money and costs down Varolii, an on-demand communications tions may be the easiest part of any their throats.” software provider in Seattle. preparedness plan. The idea is to help customers under- Work in advance to create guidelines Which solutions you deploy or beef stand what’s needed and then to craft that inform staff about preventive up will obviously be dictated by a scenarios that will shore up support measures to avoid contagion, HR policies for customer’s remote-work needs, budget whenever it becomes necessary. For leave or absences and company expecta- and sophistication, whether VPN ports, instance, says Cavalancia, you could arrange tions for job performance. “Off er ongoing Webcam videoconferencing, VoIP, a plan to lease pre-confi gured laptops to targeted communications that enable Microsoft SharePoint, Citrix terminals and staff who may or may not need to work from people to know what the situation is, what its GoToMeeting, Salesforce.com or other home. Then you can structure your fees they need to do, when they need to work virtual or real-time applications or around ongoing costs and services rather from an alternate site, like home, who needs proprietary products, as well as data than a single-solution project. to perform which tasks and how long the protection and restore solutions. Providers situation will persist,” says Anyck Turgeon, put the average cost to a small business for chief of market strategy and security at a preparedness plan anywhere from $5,000 Identifying Critical Areas Crossroads Systems Inc., a data-security to $20,000, depending on what’s in place There are several critical areas to investi- provider in Austin, Texas. Remember to and what’s requested. gate in order for businesses to remain up include outside team members, such as In any case, fourth quarter 2009 off ers and running during a pandemic outbreak. accountants and contractors, publicists and unprecedented openings to talk to clients Of course, each area depends on the other investors or crucial vendors. not only about preparing for the pandemic to be eff ective overall. Stay alert to compliance and regulatory but also about business continuity and Identify key employees and vital needs. For instance, says Turgeon, “multi- disaster recovery going forward. functions. “For every key employee, most mode communications are critical in case of of what they do is not critical and can be emergencies, yet privacy standards must be delayed. So you must fi ne-tune the job met. So personalized messaging and Joanna Krotz is a freelance technology and determine exactly what they do that communications may need to be created.” writer based in New York. makes them critical,” says Michael Miora, Plus, fi rms will need to be able to address
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 7 1109rcp_Asigra_Insert 10/15/09 9:45 AM Page 2 Project2 10/19/09 4:10 PM Page 1
Keep up-to-date with the channel with our free e-newsletter, RCP Update–subscribe at RCPmag.com TRENDS 4 ISSUES 4 ANALYSIS
November 2009
{ Pulse} SMB Partners Hedge Their Bets Attendees at SMB Nation 2009 assert their independence from Microsoft amid slowly improving market conditions. By Rich Freeman
re Microsoft and partners conversation,” Brelsford says. And indeed, 2009 has been a challenging year for who focus on small and this year’s list of conference sponsors many at the conference, though some see midsize businesses (SMBs) includes two conspicuous newcomers: business beginning to rebound. A growing apart? IBM Corp. and Google Inc. “They “It’s been picking up,” says Selene Perhaps, based on the seventh annual wouldn’t have been here in the past,” Bainum, chief architect at RiteTech LLC. SMB Nation Fall Conference, held Oct. Brelsford notes. The Herndon, Va.-based solution provider 2-4. The popular show, which targets the Not that Microsoft’s profile at the and Registered Member of the Microsoft mostly smaller VARs, solution providers conference was anything less than Partner Network (MPN) is typical of many and integrators that serve SMBs, has been prominent. The company focused firms at SMB Nation that have spent the literally and figuratively distancing itself particular attention on Windows 7, then last year hustling up new revenue sources from Microsoft for the past two years. just weeks away from release. “It’s the amid declining IT outlays. In RiteTech’s Once staged annually at Microsoft best thing Microsoft has done in a long case, that meant tapping into rising headquarters in Redmond, the confer- time,” says Dave Waldrop, Microsoft’s U.S. demand for Voice over IP (VoIP) solutions ence relocated to a convention hall in director of strategic alliances and local by marketing homemade management downtown Seattle last year. This year it engagement, adding that partner interest and analytics applications for users of was held at the Riviera Conference Center in the new operating system has been Microsoft’s Response Point VoIP phone in Las Vegas. running high. That certainly squares with platform. Though that system’s future has According to Harry Brelsford, CEO of the buzz from conference goers, who been in question since the spring, when SMB Nation Inc., the Bainbridge Island, attended Windows 7-related sessions in Microsoft laid off an unspecifi ed number Wash.-based company that hosts SMB large numbers. “These guys are real of product team members and canceled Nation, the change was based largely on excited,” Brelsford observes. “There’s a future release plans, RiteTech’s solution feedback from prior attendees weary of hunger for knowledge.” has been gaining traction with customers. Microsoft’s dominating presence at the Robust sales of Windows 7 would be a However, one recently reliable income event. “They wanted to have a broader welcome boost for the SMB channel. stream for SMB partners may be about to
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 9 ChannelReport Next time: Recapping 2009
{ Pulse continued}{CRM}
dry up. According to numerous confer- ence presenters, managed services, in which partners remotely handle tasks such as desktop management and e-mail administration in exchange for a monthly fee, is headed for a collision with cloud computing. As more and more SMBs consume their applications, processing and storage over the Web, managed service providers (MSPs) may fi nd themselves with fewer on-premises resources to support. “We really see the channel being threatened,” says Mike O’Brien, director of business development at Zenith Infotech Ltd., a managed services software maker and Registered Member of the MPN based in Warrendale, Pa. O’Brien was one of several speakers who Cisco, Salesforce.com Go urged conference goers to begin formulating a cloud strategy of their own After SMBs Together immediately. “The smart solution Customer Interaction Cloud combines Salesforce.com’s Service Cloud 2 and providers are going to be the ones who Cisco’s UC stack. By Stephen Swoyer take advantage of the cloud,” says Bob Godgart, CEO of Autotask Corp., an East Networking giant Cisco Systems Inc. and Software as a Service (SaaS) pioneer Salesforce. Greenbush, N.Y.-based Gold Certifi ed com Inc. are rolling out a combined customer relationship management (CRM) and contact partner that makes professional center off ering with a cloud twist. services-automation software for MSPs The new Cisco/Salesforce.com Customer Interaction Cloud taps Salesforce.com’s and other service providers. Service Cloud 2 and Cisco’s Unifi ed Communications (UC) stack. It exploits a custom However, Paul Leonhardt is among connector that permits users of Salesforce.com CRM to leverage Cisco’s Unifi ed Contact many SMB Nation attendees in no rush to Center capabilities. the cloud. Leonhardt is president of G.A.C. It’s a small and midsize business (SMB)-oriented off ering, too, according to Cisco and Computer Services Inc., an integrator and Salesforce.com; the two partners plan to target shops of between 30 and 300 agents. Registered Member of the MPN in Tinley Cisco offi cials anticipate plenty of pent-up SMB demand, citing estimates that just Park, Ill. He thinks of all the SMBs that about half of all customer service interactions involve cloud assets at some point. The rely on already overtaxed DSL lines for new Customer Interaction Cloud’s “cloud” branding underscores its support for next-gen their Internet connectivity and wonders Web 2.0 applications—social media, forums, blogs, wikis or online searches—in addition what would happen if they added to its being built on top of Salesforce.com’s Service Cloud 2 platform. mission-critical application traffi c to the The new off ering’s cloud-based underpinnings help abstract, or eliminate entirely, a mix. “It’s risky,” Leonhardt says. lot of the complexity associated with managing and integrating contact center technolo- Still, Leonhardt and speakers like gies, particularly with CRM or other application software platforms, the two partners say. Godgart agree on one thing at least: “The combination of Cisco’s Unifi ed Communications and Salesforce.com’s Service Recession or no recession, there’s Cloud 2 will provide companies with a true cloud-based option when it comes to their opportunity ahead in the SMB space. As customer service needs,” said Alex Dayon, senior VP of customer service and support Microsoft’s Waldrop put it, echoing many for Salesforce.com, in a statement. “Companies will no longer have to manage routers, at SMB Nation: “There has never been a servers and switches when it comes to their contact center—they can focus on delivering better time to sell to SMBs.” the best customer service possible.”
Rich Freeman ([email protected]) is a Seattle, Wash.-based freelance writer who Stephen Swoyer ([email protected]) is a New York-based freelance journalist who writes covers business and technology. about technology.
10 Redmond Channel Partner NOVEMBER 2009 RCPmag.com Coming soon: Analyzing health-care reform's impact on small business
{ Dynamics} { Upgrade} What Recent Acquisitions Less of a Signal about Microsoft’s Need for ERP Strategy Microsoft extends Dynamics AX with acquisition of IP from three partners. Partners in Would Redmond do the same for NAV, GP and SL? Dynamics By Herb Torrens NAV 2009 Directions on Microsoft, a according to Helm. It’s Kirkland, Wash.-based also being sold worldwide, SP1? research consultancy. along with Microsoft A new Service Pack creates “With Dynamics NAV, GP Dynamics NAV, he adds. technical capabilities in Microsoft An investment to develop and SL, the company In a high-end (for Dynamics NAV 2009, but does it vertical solutions in the appears ready to let Microsoft) product like make partners less critical? Dynamics AX product partners lead.” Dynamics AX, partners indicates that Microsoft Helm says that he sees will continue to be key to Service Pack 1 for Dynamics NAV is committed to directing Microsoft focusing its the eff ort, according to became generally available in September the expansion of that Dynamics AX strategy analysts. and Microsoft began promoting the enterprise resource around specifi c industries R “Ray” Wang, partner benefi ts more aggressively in October. planning (ERP) product, in the near future in an for enterprise strategy at New features include: an analyst said—but don’t eff ort to provide more Altimeter Group, says the ✱ Data entry enhancements expect the same hands-on vertical solutions for IP acquisitions should help ✱ Filter improvements approach for Microsoft’s midmarket customers. other partners. “By ✱ Keyboard shortcut changes other three ERP lines. Dynamics AX is acquiring the IP for ✱ Improved Internet resource Microsoft in September Microsoft’s highest-end existing proven solutions, connections bolstered Dynamics AX ERP product, designed for Microsoft has minimized ✱ Visualization improvements with intellectual property customers with 200 to the time-to-market for The real diff erentiator in the (IP) purchases from three 7,500 seats, which still more robust modules package is the visualization process, of its partners. The puts it on the low end within their existing AX says R. “Ray” Wang, an enterprise acquisitions include a compared to ERP products suite,” Wang says. strategy partner at Altimeter process-manufacturing from Oracle Corp. and Helm notes that a Group. The visualization process solution from Fullscope SAP AG, Helm notes. simple metric will reveal allows customers to customize the Inc., a professional service Crispin Read, general the worth of the acquisi- user experience using Microsoft’s solution from Computer manager for Microsoft tions: “By the time the Silverlight multimedia framework. Generated Solutions Inc., Dynamics ERP, says next version of Dynamics That’s been one area where and two retail solutions Microsoft is committed to AX ships late next year, partners have played a signifi cant from LS Retail EHF and all its ERP lines. “We will Microsoft should be able role with the midmarket-focused To-Increase Denmark A/S. continue to invest in all to point to a lineup of enterprise resource planning line. “Like some of its four Microsoft Dynamics partners with specifi c “Typically, specifi c visual confi gura- competitors, Microsoft ERP solutions and intend solutions on top of the tion for micro-verticals takes place in will continue to have for each solution to grow Dynamics AX industry the last mile,” Wang says. “Prior to this multiple ERP product lines, and gain a competitive pieces, targeting even release, smaller companies with 100 but Dynamics AX is the advantage in their more specifi c niches.” to 250 employees relied on partners to only one whose scope respective markets,” he develop user interface enhancements. Microsoft will try to explains. Now, they have a much simpler platform expand,” predicts B. Right now, Dynamics Herb Torrens is an award- to begin that process.” —H.T. Robert Helm, vice AX is getting most of the winning freelance writer based president of research at updates from Microsoft, in Southern California.
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 11 ChannelReport Next time: Are the Microsoft Partner Network's social media tools worth your time?
{ Roadmap} according to Kamat. Backups can be set to take place while laptops are online or offl ine, according to Microsoft’s descrip- tion of the beta. The beta has an auto-grow feature that can “extend the replica volume as the production data grows,” according to the blog. It also includes automatic error fi xing of the replica volume via the auto-rerun or auto-cc functions. A single DPM 2010 server can support up to 100 servers, 1,000 laptops, or 2,000 databases, according to Microsoft documentation. The beta extends protection to SQL Server 2008 and other Microsoft server products, as well as to the upcoming Exchange 2010 and SharePoint 2010 servers. In the current generation, DPM Data Protection Manager costs $579 for the server license, while management licenses cost $431 for 2010 Beta Released By Kurt Mackie enterprise data protection covering application servers, $157 for standard data Microsoft moved toward the general Microsoft’s live migration feature. This protection covering fi le servers and $27 for availability of System Center Data feature also extends to Windows Server client data protection. Microsoft usually Protection Manager (DPM) 2010 with 2008 and Hyper-V servers. updates prices when a product reaches the the release of a public beta last month. The DPM 2010 beta also provides release to manufacturing milestone. The release follows a community centralized client protection for technology preview for more than 50 Windows-based PCs, from Windows XP to Microsoft customers, according to Anand Windows 7 versions. With this release, Kurt Mackie ([email protected]) is Kamat, group product manager for the the backup protection for laptop clients online news editor, Enterprise Group, at 1105 DPM team, in a blog post. DPM 2010 is a was “completely built from scratch,” Media Inc. backup and data-recovery tool formerly known as “Zinger” or “DPM version 3,” and is part of the System Center manage- { Mobile} ment product line. Windows Mobile is based on the Windows DPM provides continuous data Takeaways from Compact Edition OS. There’s no upgrade path from versions 5.0 and 6.0, although some service protection of Windows application and 4 the Windows providers will off er upgrades from version 6.1. fi le servers to disk, tape or the cloud, and also protects Windows clients. Phone Launch A new Microsoft “My Phone” free service lets people back up information on their phones and DPM 2010 will eventually succeed Microsoft launched “Windows phone” branding in October, marking the global rollout of Windows Mobile 5 allows people who have lost their phones to check Microsoft’s DPM 2007 Service Pack 1 6.5-based phones by Microsoft’s hardware partners. a map for the location where their phone was last product, which was released in January. A few key points: synchronized. According to a Microsoft spokesperson, Some of the phones are already on the market, such A new Windows Marketplace for Mobile off ers a “the next version” of DPM 2010 will be as the HTC Pure off ered by AT&T and HTC Imagio portal for people to buy applications for Windows available in the fi rst half of 2010. 1from Verizon Wireless. 6 phones. The Marketplace currently has 246 mobile applications in the catalog. The beta includes a number of Microsoft expects its hardware partners to deliver improvements over the previous release, more than 30 new phones in more than 20 Microsoft also “redesigned” a mobile version of its according to Microsoft. The DPM 2010 countries by the end of 2009. Internet Explorer browser for the Windows phone 2 7 launch. It integrates with Adobe Flash Lite and can beta can protect virtual machines moved —K.M. The Windows Mobile 6.5 operating system in log onto secure Web sites. across cluster shared volumes on Windows phones enables the use of a physical Windows Server 2008 R2 using 3 QWERTY keyboard or a touch user interface, or both.
12 Redmond Channel Partner NOVEMBER 2009 RCPmag.com Coming soon: Putting a value on partnership
{ Outlook} “One of the interesting things about Ballmer Promotes ‘New budget reductions is once the new budget’s in place … in a sense, the budget sets you free,” Effi ciency’ Vision for IT Ballmer said. “You know you can’t petition. Economic reset is forcing IT to show more value for less money. We don’t live in a world where it’ll be very Microsoft CEO pitches new wave of products as being here to help. easy to petition the business for more money. So it really gets to be a question of tradeoff s.” The idea of an economic “reset,” a new level He also gave a pitch for Microsoft’s of spending based on less leverage, that hosted applications, which amount to a form Microsoft CEO Steve Ballmer discussed with of outsourcing for many IT organizations. partners in July is now a major theme of the “We’ve seen an incredible wave of interest company’s latest product wave launch. in what we’re doing with Exchange Online In a late September launch event in and SharePoint Online,” Ballmer said. “The San Francisco for Windows 7, Windows biggest part of the IT budget in every Server 2008 R2, Exchange 2010 and other company is in running the things that you products, Ballmer gave a keynote talk do today. Every dime you can save in the run called “The New Effi ciency.” budget becomes a dime you can reinvest in Ballmer took the position that IT pros the innovate budget.” can do more with less and still innovate Ballmer was asked whether the down by using Microsoft products—even in the economy implied that innovation would be present down economy, which he described Ballmer said that IT budgets “have diminished in businesses, replaced by the as “a reset” or “the new normal.” His position been reset down” and that Microsoft would concept of “good enough.” was supported by on-stage early adopter have to demonstrate how its products can “No,” Ballmer said. “The truth is, you will testimonials from executives at Continental help IT departments do more with less. In a get pushed to be effi cient. Which means Airlines Inc., Ford Motor Co., Intel Corp. and Q&A session, Ballmer even suggested that you are going to take the cost out of some Starwood Hotels & Resorts Worldwide restricted budgets represented a kind of things [that] you’re doing today to do new Inc. on the effi ciencies to be derived from “freedom” for IT departments looking to things—innovative things—for tomorrow.” Microsoft’s products. set priorities. —K.M
{ Gold Club}
As any company that has earned the distinction management technology can tell you, achieving Gold Certifi ed Partner status Became Gold Certifi ed: September 2009 is no easy feat. Congratulations to the following Microsoft Competencies: ISV/Software Solutions, organizations that have recently joined Microsoft’s Business Intelligence and SOA and Business top partner group: Process www.go-cypress.com Aithent Inc. Based: New York, N.Y. NetMotion Wireless Line of Business: Provider of software solutions Based: Seattle, Wash. and services for the fi nancial, government, health Line of Business: Provider of mobile productivity care, insurance and technology sectors and management software Became Gold Certifi ed: August 2009 Became Gold Certifi ed: September 2009 Microsoft Competencies: SOA and Business Microsoft Competencies: Mobility Solutions Process, Custom Development Solutions and Data Microsoft Competencies: ISV/Software Solutions www.netmotionwireless.com Management Solutions www.beam4d.com www.aithent.com Stigasoft BGT Partners Based: Haryana, India Atronic International GmbH Based: Miami, Fla. Line of Business: IT and IT enterprise solutions Based: Graz, Austria Line of Business: Creative design, interactive services provider Line of Business: Developer of software solutions marketing, strategy & analytics, and Web sites & Became Gold Certifi ed: August 2009 for the casino industry applications Microsoft Competencies: SOAand Business Became Gold Certifi ed: August 2009 Became Gold Certifi ed: August 2009 Process Management, Data Management Microsoft Competencies: Software Products Microsoft Competencies: Information Worker Solutions and Custom Development Solutions www.atronic.com Solutions, Mobility Solutions and Networking www.stigasoft.com Infrastructure Solutions Beam4D Enterprises LLC www.bgtpartners.com If your company has recently become a Gold Based: Sarasota, Fla. Certifi ed Partner for the fi rst time, share the news Line of Business: Debt purchasing and collection Cypress Software Stystems in RCP! E-mail announcements, containing all software vendor Based: North Richland Hills, Texas of information listed above, to Managing Editor Became Gold Certifi ed: September 2009 Line of Business: Developer of credit-risk Wendy Gonchar at [email protected].
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 13 Project1 10/16/09 8:20 AM Page 1
Advertisement PICS Finds Promise, Profi t in Managed Services
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To say that Professional Implementation Consulting Services Inc., aka PICS, works with a lot of servers, is an understatement. From a computing perspective, the company considers itself a large company and deploys its services as such. By Jabulani Leff all
he year is 1995 and the enterprise software development, Internet as a business technical and application consulting concept is still in its nascent and Internet hosting,” says Rossi, stage, yet in full swing as co-founder and chief information an enterprise tool. offi cer of PICS, which has found its This is the same year niche in the mid-Atlantic corridor. Tthat Professional Implementation Cut to 2008, when the company Consulting Services Inc., which uses decided to start a third business the acronym PICS for shorthand, was division to perform local IT services in founded. Even then, remembers the Greater Philadelphia, South Jersey, Terry Rossi, the dynamics of local and and Delaware Tri-State area and its remote servers were key—something founding principles still applied as the company hasn’t forgotten. the new initiative, PICS ITech, got off “We historically specialized in the ground. Project1 10/16/09 8:21 AM Page 2
“We feel managed services is an outsourced resources on-site.” The next logical step is to watch excellent alternative to putting trends in cloud computing and virtu- outsourced resources onsite.” alization and to observe the develop- ments of the industry, along with ways —Terry Rossi, Co-Founder and CIO, PICS to tailor client environments, to be competitive in the era of virtual servers “Our fi rst customer was more than consumer interface, proved to be “very and machines. 100 miles away from us with eight helpful in getting PICS ITech off to the Indeed, software as a service and servers connected to more than 100 right start.” hardware as a service will likely grow in workstations,” he says. We needed a Unlike the traditional service- tandem, or at least develop to a point remote solution that would allow us to level agreement and partner vetting where they become complementary. eff ectively manage the customer’s IT approach (meetings, spreadsheets, For his part, Rossi says growth in environment.” presentations, long contracts), Rossi these areas could lead to his company For PICS and other IT service says PICS was able to get initial drafts taking advantage of Zenith’s SmartTyle companies, visiting client sites and of contracts and marketing materials Computing off ering. Zenith SmartStyle maintaining processing environments from the Portal itself and customize to is a totally integrated solution based locally was and is becoming less its own needs before proceeding. on a cloud utility computing platform. and less cost eff ective. To PICS, Rossi “We used the forms from the portal Rossi says his company would look at explains, going on-site was neither and took it to our marketing and Zenith SmartStyle and other data and “practical nor profi table.” legal partners to draft our current customer relationship Zenith off erings Similarly, hosting client server documents,” Rossi adds. to complement PICS’s business in the environments off -site could also be The result: PICS ITech is powered by future. costly and this is where the need for a the Zenith managed services platform “We looked at 2009 as a year to third-party partner arose. The ITech di- and has proven to be highly eff ective build out our internal on-boarding and vision was a great idea in practice, but in helping Rossi’s group manage the sales processes. We feel we have a solid it needed the right spark, so to speak. entire ITech customer base. platform to sell, bill and support our “So we found Zenith Infotech by In a little more than18 months PICS ITech customers,” Rossi says. “We searching out the top toolsets for PICS has secured more than $750,000 know that as we expand the PICS ITech Remote Monitoring and Management,” in Zenith-based service contracts and service, Zenith will be able to support Rossi recalls. “We felt that Zenith’s ap- now relies on the Zenith managed our growth.” proach of no on-site hardware and no services and backup and disaster upfront license purchases was exactly recovery devices to support the PICS’ what we needed to start the ITech ITech engineers Sponsored by division.” With a seamless integration of its Understanding the culture and managed services business line, Rossi application of having a managed says he sees his company growing services partner was still new to PICS along with the broader managed and the company needed to get up to services space as enterprise process- speed right away, despite the fact that ing environments continue to drive it had found an aff ordable and reliable economy and marketplace changes. partner in Zenith. “We still see high demand in enter- Rossi says that the Zenith Partner prise clients for staff augmentation,” Portal, where the homepage is about he says. “We feel managed services VISIT ZENITHINFOTECH.COM TO GET STARTED! as intuitive as the average business-to- is an excellent alternative to putting RCP COVER STORY
16 Redmond Channel Partner NOVEMBER 2009 RCPmag.com Passing the Torch
Some of the IT industry’s top innovators are within striking distance of retirement age. Here’s a look at what that means for them, their companies and the channel. By Anne Stuart ILLUSTRATION BY JON VALK
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 17 RCP COVER STORY | PASSING THE TORCH
f there’s anybody who should have “For the next 18 years after that, about 10,000 people per day retirement all figured out by now, will be reaching the age of 65,” says Ken Dychtwald, an author, speaker and CEO of Age Wave, a San Francisco-based consulting it’s Howard Diamond. “I’ve fi rm that specializes in aging-related demographics. Meanwhile, retired multiple times,” he says people are living longer as well. Dychtwald points out that Americans born in 1900 had an average life expectancy of about with a laugh. “I’m either very 47 years. By 2000, average life expectancy had risen to 78 years— good at it—or not good at all.” a bigger jump in one century than in the preceding 900 years. Several years back, Diamond took early retire- “Today, many people have 85 or 90 or even 95 in their sights,” says Dychtwald, who is himself a boomer. “So at 40, 50 and 60, they’re ment from the chairmanship of Level 3 no longer ‘over the hill.’” In fact, many people in that age range I don’t consider themselves middle-aged, says Dychtwald, who Communications LLC of Broomfi eld, Colo. That narrated the PBS documentary “The Boomer Century” for PBS in lasted a year or so, but soon he was back in the 2007. Instead, he says, boomers tend to view this stage of life saddle, most recently as CEO of ePartners Inc., more as “middlescence,” a kind of grown-up adolescence that’s a a Gold Certified business-solutions provider time of uncertainty, but also of potential new opportunity. Says Dychtwald: “Increasing longevity is resetting many of life’s clocks.” based in Irving, Texas. In December 2007, Diamond retired from ePartners, turning the reins over to a handpicked successor. “You’re hearing people say ‘I But Diamond hasn’t exactly ridden slowly into the sunset. In addition to helping raise his 1- and 3-year-old sons at home in wanted to sell my company in the Boulder, Colo., he’s still consulting, serving on corporate boards, next year or two,’ and they’re speaking at conferences—and, like many others throughout the business world, trying to fi gure out what happens next. “A friend enormously frustrated by the fact of mine called me about six or eight months ago and said, ‘Guys that the business is worth less today like you and me used to be retired—but now we’re just unem- ployed,’” Diamond quips. than it was 24 to 36 months ago.” And, like many others in the Microsoft partner community, he’s Howard Diamond, Former CEO, ePartners Inc. keeping an eye on other leadership transitions in the channel and looking at what similar transitions in leadership—especially in the current economic environment—might ultimately mean for Many IT industry leaders—including many in the Microsoft the channel itself. partner channel—fall squarely into the boomer cohort, and they know exactly what Dychtwald’s talking about. AGE WAVE Some hope to leave the business for good at a certain age, but In 2011, only about a year away, the oldest baby boomers will mark haven’t yet decided whether that means simply retiring, turning another milestone. The oldest of the boomers—the post-war the company over to their offspring, selling it to employees or generation of 76 million Americans born between 1946 and pursuing a merger or acquisition. Others hope to follow 1964—will begin turning 65. That is, of course, the traditional age Diamond’s lead into “semi-retirement,” leaving their companies for retirement, and it will usher in yet another era of boomer- but staying involved in the industry. Still others may adopt a driven change. lower-profi le of the example set by Microsoft Chairman Bill Gates,
18 Redmond Channel Partner NOVEMBER 2009 RCPmag.com who stepped away from day-to-day operations at the company probably that of Jeff Raikes, former head of the Microsoft last year at age 52 to devote more time to his philanthropic work Business Division, who retired at age 50 in September 2008 after with the Bill & Melinda Gates Foundation. Gates now works only 27 years with the company. Raikes didn’t stay home for long, part-time at Microsoft, but he retains his title and remains active though; that same month, Gates named Raikes the new CEO of in the company’s overall direction. the Gates Foundation. However, two of Redmond’s other top Still others had carefully scripted retirement or transition plans executives—CEO Steve Ballmer and Chief Software Architect Ray that were placed on hold or shelved entirely during the economic Ozzie, both 53—haven’t made public any possible plans for retire- meltdown of the past year-plus. “You’re hearing a lot of people say ment or succession. ‘I wanted to sell my company in the next year or two,’ and they’re Other boomer executives elsewhere in the IT industry have enormously frustrated by the fact that the business is worth less made high-profi le decisions about their businesses. Most notably, today than it was 24 to 36 months ago,” Diamond says. “So they’re H. Ross Perot Jr.—chairman of Perot Systems Inc. and son of the hanging around longer than they otherwise might have because former presidential candidate—brokered a deal to sell the Plano, they’re convinced—or they hope—that the market will come back.” Texas-based company that his father founded in 1988. The buyer: Some older boomers—those 62 and up—may also opt to cut Dell Inc. The price tag: $3.9 billion. The deal, announced in their losses by taking early retirement or unloading their businesses, September, is expected to close before Feb. 1, 2010. It wasn’t clear
“Many partners are approaching 25 to 30 years in the business, and they’re wondering what their exit plans look like. There are a lot of discussions like that going on right now.” Arlin Sorensen, Chairman and CEO, Heartland Technology Solutions
then applying for Social Security benefi ts. In fact, The Associated at press time how—or whether—the younger Perot, who is in his Press reported in September that applications for retirement early 50s, would fit into the newly expanded Dell, although a benefi ts were up 23 percent overall from the year before, a much company press release said he was under consideration for a larger than expected increase; Social Security offi cials attribute the spot on Dell’s board of directors. jump to both layoff s and early retirement. (The shift also means Meanwhile, out in the channel, many partner executives are that, for the fi rst time since the 1980s, Social Security will pay out hoping for similar—if much smaller-scale—success in eventually more in benefits than it collects in taxes over the next couple of turning their companies over to someone else. years, adding to the overall federal defi cit.) EXIT SIGNS THE OUTLIERS “People are defi nitely discussing ways to exit the business,” says It’s no coincidence that so many channel leaders are at this Arlin Sorensen, chairman and CEO of Heartland Technology particular stage at this particular time, according to best-selling Solutions (HTS), a Gold Certifi ed Partner based in Harlan, Iowa. author and New Yorker staff writer Malcolm Gladwell. In his latest “Many partners are approaching 25 to 30 years in the business, book, “Outliers: The Story of Success” (Little, Brown & Co., 2008), and they’re wondering what their exit plans look like,” adds Gladwell examines the combination of factors behind the extreme Sorensen, who falls into that category himself. “There are a lot of success of certain people, from hockey players to rock superstars discussions like that going on right now.” to pilots to technology entrepreneurs. Gladwell’s chapter on the The issue isn’t a shortage of options, he says. “It’s which of latter group points out that many of today’s top IT innovators— those options is most effective in terms of accomplishing the including Gates and other Microsoft top executives—were not objectives that you’re trying to get done. Each option available out only baby boomers, but were all born in same few years in the there gives you some of what you want, but it’s hard to fi nd one mid-1950s (see “Right Time, Right Place,” p. 22). that works for everything,” he explains. So it’s not surprising that some of those key players—who are Sorensen should know. He’s already begun examining possible now in their 50s—are either making exit plans or have already scenarios for his business’s future. Among his main concerns: bowed out. Besides Gates, the most publicized departure was making a clean, smooth transition. “There have been some high-
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 19 Project4 9/4/09 9:27 AM Page 1
Consolidate Database S with Microsoft SQL Server 2008 and Dell PowerEdge Servers
rganizations today want to do more with less, especially in these tough economic times. This An Ois where SQL Server 2008 can help. By improving SQL Server in version 2008, Microsoft offers gu organizations the opportunity to centralize data management services in a wide variety of ways. ea With its new unified management and auditing tools, SQL Server 2008 makes it easier to manage multiple an instances on fewer servers. th Database Proliferation SQL Server 2
It’s easy to proliferate databases in any datacenter. That’s because databases, especially SQL Server databases, SQL Server 2008 offers four different consolidation models. are used in support of so many other products and Each provides the opportunity to reduce your server footprint. services. Organizations often find themselves running Database Consolidation multiple editions of SQL Server as well as multiple This is the simplest consolidation model. It brings together versions of the product.With its new unifi ed data many databases into a single instance on a single server.You management features, SQL Server 2008 finally offers the can rely on this model when all of the databases you bring ability to consolidate all databases, all database instances together into the instance have similar requirements including and all database versions into one streamlined and management structure, configuration and security settings, as standardized installation. Consider what type of database well as auditing mode. you run. Operational Many infrastructure applications require Instance Consolidation an operational database to store the information they If the databases you want to bring together have different collect and manage about the systems they administer. requirements—management, security, confi guration and These are often Change Management Databases (CMDB). auditing—consider running multiple instances of SQL Server Informational Many collaboration tools rely on infor- 2008 on the same physical hardware. Each instance supports its own settings and configuration and can run as many mational databases to store structured and unstructured databases as required since each instance is completely isolated data and support collaboration. from the others. Changes to one instance do not affect Financial Organizations running systems such as changes to any other instance.The SQL Server Standard edition Enterprise Resource Planning (ERP) tools need to rely will support up to 16 instances per physical server and the on financial databases to store the ERP data. SQL Server Enterprise or Developer editions can run up to 50. Organizational Organizations often develop internal systems to manage the business processes that support Virtualization Consolidation their production operations. This consolidation model introduces the concept of Departmental Specific departments often have their virtualization—the partitioning of the physical hardware own databases to run and manage business processes into multiple containers called virtual machines (VM) to run or to support Customer Relationship Management segregated guest operating systems and applications. (CRM) systems. Hardware is virtualized and presented to guest operating systems through synthetic devices. Regional These databases serve as collector databases that provide local services and publish locally-collected Once the guest operating systems are installed, you can install data to centralized databases. SQL Server 2008—which is optimized for virtualization—into Geographical These databases can store any type of the VM and use it to consolidate your databases. Each virtual data locally for ease of access and to provide support machine can run any number of databases. for worldwide information management.
Danielle Ruest and Nelson Ruest are technology futurists focused on datacenter optimization and continuous service availability. They are authors of multiple books, including They are currently working on “Training Kit 70-652: Confi guring Windows Server Virtualization with Hyper-V”, published by Microsoft Press and “Virtualization,A Beginner’s Guide” published by McGraw-Hill Osborne. Reach them at www.Reso-Net.com. Project4 9/4/09 9:27 AM Page 2 e Servers is And by hosting these instances on Dell PowerEdge Servers powered by multi-core processors, you can rs guarantee the best levels of availability as well as ensure the best possible performance. Keep in mind that ys. each time you consolidate a database server, you reduce the physical server footprint in your datacenter le and you reduce costs.Assess SQL Server 2008’s powerful new features and you will find that, together with the Dell PowerEdge Server, it delivers the best value for data maintenance and storage. er 2008 Consolidation Options
Hybrid Consolidation The Hybrid consolidation model mixes the first two—database and instance consolidation—with the third—virtual- ization consolidation. One of the major advantages of virtualization is that it focuses on maximizing hardware utiliza- tion. IT professionals in datacenters everywhere are quickly discovering that the one OS-one physical server model delivers very poor utilization ratios.With a multiple OS-one physical server model, you can increase hardware utilization ratios and transform them from 10 to 15 percent utilization to upwards of 70 percent.When you consider that each physical server requires space, power and cooling, you can quickly see the allure of server consolidation through virtualization. Hybrid consolidation is a powerful model for reducing the number of physical servers running SQL Server in your datacenter. Start Today Consolidation, especially consolidation on Dell PowerEdge Servers such as the Dell R900 or the 710, will provide many benefits—hardware savings, datacenter space savings, reduced administration, reduced licensing costs, and increased compliance. Start your SQL Server consolidation project today and reap the benefits of reduced costs and reduced overhead. Find out more at www.dell.com/sql2008.
About Dell Dell Inc. (NASDAQ: DELL) listens to customers and delivers innovative technology and services they trust and value. Uniquely enabled by its direct business model, Dell is a leading global systems and services company and No. 34 on the Fortune 500. For more information, visit www.dell.com, or to communicate directly with Dell via a variety of online channels, go to www.dell.com/conversations.To get Dell news direct, visit www.dell.com/RSS. RCP COVER STORY | PASSING THE TORCH
profi le failures when people have tried to exit their businesses,” he says. “They’ve tried to step away, and then they’ve had to come Right Place, back to fi x things. Personally, that’s one of my fears. When I step away, I want to step away without worrying about coming back.” But that’s easier said than done, says Sorensen, who has seen Right Time the business he founded on his family’s farm in 1985 grow to an 80-person company with locations in fi ve states. “There’s a lot to In “Outliers: The Story of Success” (Little, Brown & Co., learn. You’ve got to think about the employees and the customers 2008), Malcolm Gladwell says that the 20th century’s and all these diff erent facets,” he says. “It’s diffi cult to align all greatest IT innovators excelled—at least in part—because the factors.” they were all born at precisely the right time: the mid-1950s. However, he took the first steps earlier this year, when he That meant that many IT industry leaders were just promoted Connie Arentson, formerly vice president of profes- the right age to take advantage of the personal-computer sional services, to HTS company president. Earlier in the year, era, which Gladwell says dawned with the January 1975 Sorensen tapped Scott Scrogin to head the Heartland Tech debut of the Altair 8800, a $397 do-it-yourself microcom- Groups (HTGs), the grassroots partner support network that puter kit. If these IT pioneers had been born just a few Sorensen founded in 2001 (see “P2P Power,” April 2008; years earlier—say, before 1952—they’d probably be married “Partnering With Peer Groups,” September 2008; and “P2P and working full-time in 1975, too old to be fooling around Power, Version 3.0,” July 2009). with a mail-order computer. Anyone born a few years Sorensen remains CEO and chairman, but leaves the nuts and later, say, in 1958 or so, would still be in high school—too bolts of company and peer-network operations to their new leaders. young to fully participate in the PC phenomenon. “I was getting tired of day-to-day stuff , and I wasn’t running the “The perfect age to be in 1975, in other words, is old company as eff ectively as I wanted to,” he says in explaining the enough to be a part of the coming revolution but not so decisions. “I decided to fi nd younger blood and let them have at it old that you missed it,” Gladwell writes. “Ideally, you want with passion and energy.” Both moves have been seamless, to be 20 or 21, which is to say, born in 1954 or 1955.” Sorensen adds: “I haven’t even had to have a discussion with To support his point, Gladwell cites the birthdates of either of them about how it’s going.” some technology titans: Meanwhile, the promotions have allowed Sorensen to focus on business and market strategy, looking at issues such as how HTS ✱ Bill Gates, born in October 1955 should adapt to meet demand for cloud-based computing. “Our ✱ Steve Ballmer, Microsoft CEO, born in August 1956 days of selling hardware and software are numbered, in all likeli- ✱ Steve Jobs, co-founder and CEO of Apple Inc., born in hood,” he sighs. “It’s the biggest change in the industry, really, February 1955 since Windows 95. So we’re spending a lot of time trying to fi gure ✱ Eric Schmidt, chairman and CEO of Google Inc. and that out.” former CEO of Novell, born in April 1955 Meanwhile, the new leaders are helping the company and the peer-group network prepare for whatever happens down the road. Gladwell also points out that all four co-founders of “If we choose to sell the organization, I’ve got people in place” to Sun Microsystems Inc.—Bill Joy, Scott McNealy, Vinod ensure a smooth transition, Sorensen says. “I’m positioning Khosla and Andy Bechtolsheim—were born in 1954 or 1955. myself not to have to be involved long-term because I’m vital to (And although Gladwell doesn’t mention Microsoft the business. I’ve seen people making these three- to five-year Chief Software Architect Ray Ozzie, he was born in employment agreements to stay on. When I exit, I want to exit. I November 1955.) don’t want to just change jobs.” Gladwell acknowledges that all these IT executives Choosing presidents was step one in what Sorensen expects to were bright, talented, curious, ambitious and hardworking. be a lengthy process: “All the common wisdom I’m reading says But he also attributes their accomplishments at least in that it takes fi ve to seven years to do this right,” he says. Next up: part to simple timing: “Their success was not just of their learning about options involving employee stock ownership plans. own making,” he concludes. “It was a product of the world “I’ve got some employees who may want to be involved in owner- in which they grew up.” — A.S. ship,” he says. Meanwhile, he’s leaning on the same advisors who guided his company during its aggressive growth years to help him think through exit and succession planning. “One mistake that I see representative, an accountant and an attorney, among others. people making a lot is that they try to do this stuff on their own,” “These issues are complicated, and there are so many things that Sorensen says. “It’s really important to surround yourself with the are connected. Every decision you make has an impact. You right team”—which, in his case, includes a banker, an insurance choose a path and fi nd that the tax implications are terrible for
22 Redmond Channel Partner NOVEMBER 2009 RCPmag.com that route. You choose another path, and you fi nd out the legal Meanwhile, Vanderveldt entertains the possibility that one or implications are overwhelming. It’s a not just a big deal. It’s a more of her own three children, now aged 17 to 21, might want to huge deal.” take over the business someday. Two have an affi nity for IT; one But Sorensen adds that no matter which path he eventually even has two IT certifi cations. “But that’s fi ve years or more out,” selects, he’ll keep the stakeholders—his family, his employees and she says of a potential succession. “We’ve told them, ‘If you have his customers—in the loop throughout the process: “Whatever I absolutely no interest in this, feel no pressure whatsoever.’” do, I’ll keep everybody well-informed so that there are no Strong, sincere interest—really, that burning desire—is a critical surprises,” he says. element for anyone on the receiving end of a succession plan, she While he’s trying to shape his own company’s future, Sorensen adds: “It’s what makes the diff erence between an exit strategy notes that many partner executives in the HTG peer network that’s successful and one that’s simply not going to work.” regularly discuss similar issues—even if they’re years away from Meanwhile, Vanderveldt sums up her current approach this leaving their businesses. “We have them do life and legacy plans way: “Keep building up the business now, and decide the best way that look at succession planning and exit strategies. That’s a to exit when the time comes.” constant thing that’s kept in front of them; they update it once a year,” he says. “There’s a lot of discussion about it at every meeting: CHANNEL IMPLICATIONS How do you do an acquisition or a merger? What steps do you Meanwhile, the channel itself is feeling the impact of many of the need to take? What about disaster recovery? Retirement? Estate same factors that are infl uencing its boomer leaders to re-examine planning? They’re planning for the future in eight to 10 categories their own personal and business blueprints. “The channel is still that we ask them to think about constantly.” looking for direction,” Diamond says. “But the channel is still needed. Even with the Internet, even with [Software as a Service], FAMILY AFFAIR? there’s a role for the channel going forward.” Conamex International Software Corp., a Gold Certifi ed consulting What’s changing, he says, are purchasing patterns. Diamond and IT solutions company based in Montreal, Quebec, Canada, recently spoke at the Massachusetts High Technology Council is heading into its 25th year in business. But co-founder and Vice conference on innovation, where he participated in a one-to-one President Elisabeth Vanderveldt isn’t thinking about getting out mentoring session with a young entrepreneur who had developed anytime soon. “I’m a masochist. I’m in it in for the long run,” an application that Diamond considered a “nice-to-have” option. Vanderveldt, 49, says with a laugh. But she acknowledges that “I told him that people aren’t going to buy nice-to-haves right she and husband Robert L’Esperance—the company’s other now—they’re only buying things that address their pain points co-founder and its chief technologist—will have to consider the and that have very clear ROI,” he says. question eventually. The businesses most likely to survive the transition to a new No matter what route they take, Conamex’s co-founders want generation are those that target these two goals. “What’s not to make sure that their well-established business lands in the right happening now—and what’s not going to be happening for a hands. “You want to turn it over to people who are respectful and long time—is this vague approach of ‘Trust us, if you buy this will maintain the relationships you’ve built with your clients,” solution, your company is going to run better or have improved Vanderveldt says. “You don’t just want to hand it over and see productivity or communications,’” Diamond says. “You won’t get everything you’ve worked on for 25 years ruined.” people to sign purchase orders or cut checks that way. They Their biggest concern: A dearth of younger people with the want to know that something will specifi cally increase produc- right combination of technical expertise, business acumen and tivity or reduce head counts. Things with soft returns are very burning desire to jump in and take over a busy IT company. “We hard to sell right now.” don’t see an infl ux of knowledgeable people to take over this busi- The antidote, he says: “We need creative sales models.” For ness in the way that we’d normally think of it,” says Vanderveldt. example? “We’re starting to see a model in which people are “The IT industry is supposed be one of the largest producers of saying, ‘We passionately believe that our solution will save you employees going forward, but I’d like to see where all the people money. We will install it at no upfront cost to you—but we’ll take are going to be coming from. We can’t fi nd enough people now to a chunk of the savings.’ There are new ways of getting technology handle all the work we get.” into a company if you believe the ROI is there.” Partner compa- She’s particularly concerned about recruiting and retaining nies that succeed in adapting are those most likely to make the younger women for IT careers. To that end, she has been active transition to the post-recession economy—and to their own in the Women in Leadership & Technology network, an off shoot next generation. • of the International Association of Microsoft Certifi ed Partners (see “Channeling Power,” February 2009). In a forthcoming project, she plans to launch Gen Inc. (www.geninc.tv), a video- Anne Stuart ([email protected]), the former executive oriented Web site designed to get young and teenage girls editor of Redmond Channel Partner, is a Boston-based freelance interested in technology. business and technology journalist.
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 23 RCP FEATURE Racking
For Pelagic Solutions Inc., launching a business atop Microsoft Dynamics CRM Online leads to 78 deals in UPa year. By Stephen Swoyer Online Deals
When Microsoft announced a customer relationship management (CRM) online component for its Dynamics CRM off ering two years ago, Steve Bowles, who was then a principal with one of Redmond’s regional Dynamics partners, was certain of one thing. There had to be a way to turn a Dynamics CRM Online business model—which would consist of largely low-margin engagements of fi ve to 20 seats—into a profi table enterprise.
24 Redmond Channel Partner NOVEMBER 2009 RCPmag.com “We try to work with experts in the fi eld to see if what we’re making is generic enough, but at the same time valuable enough—in terms of addressing that 80 percent [threshold]—for us to [productize it and] resell it.” Steve Bowles, Founder, Pelagic Solutions Inc.
RCPmag.comRCPRCR magg.cocoom NNOVNONOVEMBEROVOVEEMEMBMMBBEERR 200920200009 RedmondRededdmonmom dCd ChannelChanhaanannnenelele PartnerPartnrtttnneer25 RCP FEATURE | DYNAMICS CRM ONLINE
What that model was, and just how profi table it would prove to be, Bowles didn’t know. Nor did his former employer, who rejected Bowles’ idea on a Dynamics CRM Online-based business venture. Undeterred, Bowles did what any other motivated and ceaselessly PELAGIC SOLUTIONS innovative self-starter would do: He started his own fi rm, Pelagic AT A GLANCE Solutions Inc., which he conceived as a parent company to a pure Headquarters: Newmarket, Ontario, Canada Software as a Service (SaaS) CRM player—CRM Online Labs. Microsoft Partner Network Level: Certifi ed Partner Founded: 2007 Planning Pays Off Does Business As: CRM Online Labs Two years and a Microsoft Partner Award later, Bowles and his Website: www.crmonlinelab.com Newmarket, Ontario, Canada-based Pelagic Solutions are riding Key Date: Offi cially launched Web site to sell Microsoft high. They’re enjoying growing market share—CRM Online Labs Dynamics CRM Online on March 11, 2008 closed 78 SaaS CRM deals last year—at a time when many Deals Closed in First Year: 78 competitors, in both the on- and off -premises software segments, are just trying to ride things out. Vertical accelerators So what’s Bowles’ secret? He stresses that it isn’t only, or ✱ Manufacturing & Distribution mostly, a SaaS deployment model. While boosters like to position ✱ Municipal & Government SaaS as a recession-safe bet, Bowles says that in the market he ✱ Financial Wealth Management targets—small to midsize business (SMB) customers of 20 seats ✱ Hedge Fund Management or less—shops are slashing spending on everything. ✱ Equity Firm, Deal Management “When a midsize company puts a spending hold on, they put it ✱ Commercial Real Estate on hold across the board, whether it’s for on-premises [spending] ✱ Membership Management or Software as a Service,” he says. “So did the economic situation ✱ Services Industry help me? No, I wouldn’t say it helped.” He notes that one of his goals is to help Dynamics CRM Online customers transition to Microsoft Awards bigger—and, from Certifi ed Partner Pelagic Solutions’ perspec- ✱ 2009 Microsoft Dynamics President’s Club tive—more profi table on-premises deployments. “The economic ✱ 2008 Microsoft Distinction in Marketing Award outlook has made it easier for me to sell CRM Online over [the] on-premises [fl avor of Microsoft Dynamics CRM].” A bigger question is how Pelagic Solutions was able to success- Solutions to maximize its hourly billing rate. Call it an unalloyed fully market a fl edging, unproven SaaS CRM off ering in a segment win-win, SaaS-style. that already teems with entries that include Salesforce.com Inc., “When we’re adding these fi ve to 10 user deals, we need to have the veritable Goliath of on-demand CRM solutions and the poster packages available that help us maximize our own hourly rate. It’s child of SaaS itself. hard to fi nd a 10-user account that will pay $5,000 for implemen- Bowles says it’s a function of careful planning, hard work, tation services. Instead, they’re more willing to pay $1,000—if dedicated customer service, savvy marketing and, of course, the they can get everything they’d get for $5,000,” he says. “But if allure of the Microsoft brand. I can group them in with other customers—group them into “You have a business plan where you need lots of customers. So packages—that’s where some of the innovation comes in.” for [Pelagic Solutions], we need to sell 1,200 subscriptions a year, Innovation, in this case, involves giving customers most of what [and] I need to build that into a recurring revenue of $10,000 to they need at an extremely low price point. “When we package $20,000 a month,” he explains. [Dynamics CRM Online deals], we’re able to off er them stuff that That’s how you break even selling hosted CRM. Becoming we would have spent 40 to 50 hours building for one customer for profi table is slightly more complicated: “You need to look at how a specifi c industry. We can take that work and apply that instantly you sell services,” says Bowles, noting that integrators and many to all of the customers [in an industry package],” Bowles says. “So SaaS providers derive a lot of their profi ts from services. The rub, it gets them 80 percent of what they need at a fraction of what it of course, was that the SMB customers Bowles and Pelagic would cost them to get it.” Solutions planned to target with CRM Online Labs couldn’t aff ord to spend much on services. Paradoxically, Bowles saw this Model Partner as an opportunity. But innovation only gets you so far. In launching CRM Online He came up with the idea of “packaging” SaaS CRM deals, Labs, Pelagic Solutions also focused on customer service— which basically involves grouping similar customers into common especially in its go-to market eff orts. For example, Bowles says he pools. In this way, Pelagic Solutions is able to off er prospective would try to contact customers within hours of their fi rst down- clients “custom” CRM services that are tailored, for example, to loading information about CRM Online Labs. “In the beginning, the needs of specific vertical industries—in a cost-effective whenever they downloaded the [information] paper from the manner. On top of this, packaging-á-la-Bowles permits Pelagic Web site, I would call them—frequently within an hour. I knew
26 Redmond Channel Partner NOVEMBER 2009 RCPmag.com Project6 10/15/09 2:15 PM Page 1
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“I show a business user how to get started in CRM On Demand in fi ve easy steps—within one hour of their contacting me. That’s all there is to it.” Steve Bowles, Founder, Pelagic Solutions Inc.
that I had to get back to them immediately. If I didn’t get back to market, we may make a deal with the customer—as long as it’s not them right away, we would lose them.” proprietary to the customer itself. If we don’t know a lot about the Hard work has been a constant since Bowles fi rst dreamed up patient-care industry, for example, we’ll make a deal with a doctor Pelagic Solutions. While Microsoft’s Dynamics CRM off ering now and say, ‘How would you do patient care?’ We try to work with has more than six years under its belt, its SaaS CRM off ering is a experts in the fi eld to see if what we’re making is generic enough, mere whippersnapper by comparison. Redmond only delivered but at the same time valuable enough—in terms of addressing the fi rst rev of Dynamics CRM Online in April 2008. that 80 percent [threshold]—for us to [productize it and] resell it.” Third-party independent software vendors (ISVs) have been relatively slow to support Microsoft’s fi rst-ever SaaS CRM off ering, Benefi ts of Branding which Bowles says has complicated things for Dynamics CRM Another key to successfully selling Dynamics CRM Online is to Online hosting providers. In the case of Pelagic Solutions, it’s forced embrace the Microsoft brand, Bowles asserts. This can be trickier Bowles to work a little harder—and be a little more scrappy—than than it sounds, at least when it comes to freshly launched prod- would otherwise be the case. “Right now, the vendors or the ISVs ucts. Given Redmond’s track record with fi rst-generation prod- haven’t really jumped on board for making products for Dynamics ucts—several come to mind like the first, less-than-inspiring CRM Online. There’re only a handful of products. A lot of existing release of Windows two decades ago; Microsoft BOB; the primitive products that were available for CRM 3.0 and migrated to 4.0 Internet Explorer 1 Web browser and even Microsoft’s now- aren’t available for [o]nline yet,” he says. discontinued PerformancePoint Server—some Dynamics CRM A dearth of third-party solutions subtly undercuts what is, in Online providers might be understandably wary about promoting fact, Dynamics CRM Online’s greatest strength, Bowles suggests. the benefi ts of a new Microsoft technology. But Dynamics CRM “Dynamics [CRM] is almost exactly the same as CRM Online, with- Online isn’t technically a fi rst-rev product, Bowles points out. “The out the security restrictions that Microsoft puts on [the online Microsoft brand is absolutely one of our biggest advantages. We version], of course.” Learning the ins and outs of Dynamics CRM have the world’s most trusted name: Microsoft. We’re not going in Online’s heightened security confi guration was a challenge at fi rst. there with something that somebody’s never heard of,” he says. However, Bowles says that—notwithstanding a bigger security Moreover, Bowles suggests that Microsoft’s traditional product- learning curve in the case of Dynamics CRM Online—switching development story arc can also be made to work to its advantage. between the two platforms is largely a turnkey proposition. “We’ve seen Microsoft’s traditional history of starting off weak “Basically everything I do sits on top of Dynamics CRM—even if it’s with a product and becoming the strongest player.” hosted [like Dynamics CRM Online]. That’s the real power,” he Finally, Bowles urges that would-be Dynamics CRM Online power points out. Bowles argues that this is crucial for a company like providers shouldn’t overlook a couple of important best practices Pelagic Solutions that aims to support Dynamics CRM in either that never go out of style: first, know your audience; second, hosted—via CRM Online Labs—or on-premises implementations. prepare, prepare and prepare again. Pelagic Solutions—like a lot “You can start a customer with a customized version of CRM of SaaS players—doesn’t market directly to IT. Instead it targets Online and migrate that to an on-premises [version] without any business users, emphasizing a rapid-time-to-value and a point- real cost,” he says. and-click user experience. And Bowles doesn’t just know his Better still, many of the customizations Pelagic Solutions products—or his competitors, both on- and off -premises—cold. develops are likewise portable between Dynamics CRM Online He also does extensive background research on the specifi c indus- and Dynamics CRM, he says. Thus it’s conceivable that Bowles tries in which his prospective customers compete. and company could develop an industry-specifi c accelerator for “I focus on industry-specifi c presentations that I make directly to an on-premises deployment—where clients tend to pay a premi- the business [user]. I don’t do a presentation without fi rst doing um for integration or customization services. They could then roll extensive preparation,” he says. “My main selling proposition is it out to CRM Online Labs customers, too—and at a fraction of the that I’ll actually get them up and running and show them how cost. In other cases, he says, Pelagic Solutions is open to working easy it is to use during the trial. I have a 70 percent conversion with CRM Online Labs customers—particularly in new or emerging rate at that point. That’s it. I show a business user how to get market segments—to develop accelerators or customizations that started in CRM On Demand in fi ve easy steps—within one hour of the company can, in turn, package and resell. their contacting me. That’s all there is to it.” • “We have about six [custom] solutions to date that we’ve done. These include vertical accelerators or integration projects for things like QuickBooks, for example,” he says. “So if we feel that Stephen Swoyer ([email protected]) is a New York-based the industry we’re working with is of value to the rest of the freelance journalist who writes about technology.
28 Redmond Channel Partner NOVEMBER 2009 RCPmag.com Project8 5/7/09 1:42 PM Page 1
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Redmond Channel Partner Update keeps you informed on the most relevant news, issues and events for Microsoft channel partners. Subscribe Today. It’s Free! RCPmag.com/newsletter RCP FEATURE Questions About the MSP Market
The essential questions partners have about the managed services market have some surprising answers. The upshot? It may still be a good time to become an MSP. By Scott Bekker
he move toward managed services has been a megatrend in the channel over the last few years. Many partners have tried it, and many more have at least considered it. The approaches partners have taken range from baby steps—like a shift in thinking or a Skunk Works-style business unit—to Ta radical shift into managed services or starting a new company to capitalize on the opportunity. That said, the number of devices under management remains miniscule. For those partners on the outside looking in on the managed services provider (MSP) action, we offer this look at several essential questions about being an MSP today. Has the MSP market proven to be countercyclical? What MSP messages are working now? Is it too late to get started as an MSP? Is there conflict between cloud computing and MSPs? What happens to the MSP market when the recession ends?
30 Redmond Channel Partner NOVEMBER 2009 RCPmag.com RCPmag.com NOVEMBER 2009 Redmond Channel Partner 31 RCP FEATURE | MSP MARKET
Has the MSP market regarded MSPs with substantial experience in the market, like proven to be ACP Technologies, a Gold Certifi ed Partner and a Microsoft Small 1 Business Specialist in West Seneca, N.Y. countercyclical? “We’re kind of in a lull where we’re stuck at the same amount of One of the main selling points of the MSP business opportunity is clients for about the last four months,” says Ben Pearce, president that it’s supposed to be countercyclical. In other words, one of of ACP Technologies. “Before that we had steadily acquired or put a those rare types that soar when every other business is crashing. new client on [at a rate of about] one per month, and that was with In a period when everyone is looking to cut costs, that’s a plus, some extensive hand-holding with the client. The last few months right? The economy has been in freefall since late 2007. Has the we’ve lost a few MSP clients, and we’ve gained a couple. We’ve still MSP market been on the upswing over the same period? Several stayed with 47 clients on board with us. It’s kind of a fl at line.” MSPs and a close read of some analyst research tell us yes. One of the main problems, Pearce explains, is companies that DataPro Solutions Inc. is a good test case. The Spokane Valley, are too strapped to consider any kind of expenditure. That goes Wash.-based Gold Certified Partner launched its foray into for both new customers and old. “The two that come to mind that managed services during the downturn. “We’re seeing our business up in double digits over last [year], so I’d agree that it’s countercyclical,” says Tony Cook, DataPro’s business development manager. “On the “We found that people are much economy, what I’m seeing is people aren’t comfort- more interested in talking about able. They’re trying to fi nd new ways to make their businesses work. Our perspective of workforce effi- our managed services when ciency has really opened the door for us to be able to we can talk about the cost of their have more conversations around making the networks work and getting more reliability, so we’re network not working.” seeing a lot more interest [from customers] in doing Tony Cook, Business Development Manager, DataPro Solutions Inc. things diff erently.” Ted Clouser, executive vice president with PC Assistance, a Little Rock, Ark.-based Gold Certifi ed Partner, is also seeing an uptick that has doubled his number of we did lose in the last few months were just having such fi nancial managed-services customers over the last three years. problems that no matter what happened, they weren’t going to “I defi nitely think that now is the time to be out there grabbing survive or stick with what they were doing,” Pearce says. the market. What we’ve found is pure competition here. Industry-wide, there have been some encouraging signs that Somebody’s coming up for renewal, and it’s time for them to look the MSP market is true to its countercyclical billing. An August a little bit harder at what they’re paying,” Clouser explains. survey by Forrester Research Inc. of 2,300 IT executives and “People are tightening up their belt a little bit, making sure that technology decision makers in North America and Europe found they’re getting value for what they’re spending. As an MSP, if that current economic conditions are driving almost 20 percent of you’re providing that value you don’t necessarily have to worry IT professionals to purchase more managed services. That study, about it. If you’re in a situation where you’ve got something to which covers telecommunications services in addition to network off er that your competition doesn’t, now is really the time to get services, found similar enthusiasm among customers in both the [customers] to take a hard look at it, especially if you can walk in enterprise and SMB segments. the door and show them that it’s fi nancially benefi cial as well.” “While the down environment is making most technology Clouser says he’s also seen business come his way as a result of areas suff er, managed services is getting a boost as fi rms look for the economic forces that are driving workers out of the market. “On more fl exible payment models that limit capital expenditure but the more negative side, we typically can be brought in at a fraction also can keep them current with technology changes that help of what it would cost for SMBs [small to midsize businesses] to their fi rm,” Ellen Daley, research director at Forrester, said to have a full-time IT person. So, in some situations, it’s built our busi- summarize the signifi cance of the fi rm’s survey. “This further ness simply because people can save money in that way.” accelerates an industry move to a more fl exible services model But just because a market is countercyclical doesn’t mean busi- for fulfi llment of telecom, network and IT technology changes.” ness is falling into MSPs’ laps. And that applies to even highly Techaisle, a San Jose, Calif.-based market-research fi rm, recently
32 Redmond Channel Partner NOVEMBER 2009 RCPmag.com 1109rcp_Dell_Insert 10/14/09 4:17 PM Page 1 1109rcp_Dell_Insert 10/14/09 4:09 PM Page 2
Planning to buy a new soup that you saw advertised? Don’t be surprised to find it front and center on your grocer’s shelf on your next shopping trip. It’s no accident. Food manufacturers have marketing agents whose job it is to make sure that their clients’ products get maximum exposure on the supermarket shelf, and into shoppers’ baskets. “OUR GAINS IN DATA PROCESSING PERFORMANCE COME FROM THE DELL SERVERS. TWENTY- FOUR CORES CAN PROCESS THE SAME AMOUNT OF DATA IN HALF THE TIME COMPARED TO THE SUPERDOME.”
Dennis Thompson, director of enterprise information, Acosta
Acosta Sales and Marketing Company, syndicated Nielsen data showing sales HOW IT WORKS ^[WZgkWhj[h[Z_d@WYaiedl_bb[" results for every product from all of its Florida, is one of the largest sales clients. The company loads 500 million HARDWARE and marketing agencies in the United of these records per month and uses :[bbFem[h;Z][H/&&i[hl[hi States and Canada, serving consumer this data to report to clients on how m_j^?dj[bN[ed-*&&i[h_[i packaged goods (CPG) companies. their products have performed against processors Acosta has 13,000 associates the competition. across North America, a third of SOFTWARE whom are merchandisers who visit ONE-TENTH THE COST, TWICE C_Yheie\jIGBI[hl[h(&&. more than 100,000 supermarkets, THE POWER C_Yheie\jM_dZemiI[hl[h(&&. mass merchandisers, club stores, Until recently, the Microsoft SQL C_Yheie\jM_dZemiI[hl[h7Yj_l[ convenience stores, military Server 2005 data warehouse ran Directory® commissaries and exchanges, and on an HP Superdome server with 12 C_Yheie\jE\ÓY[I^Wh[Fe_dj drug stores. They work with store processors. “We needed to upgrade I[hl[h personnel to ensure that Acosta clients’ the server to handle more data, and we SERVICES products stand out on the shelf. When found that upgrading the Superdome a product is in the wrong location, has would cost 25 percent more than :[bbFheIkffehjI[hl_Y[i insufficient space, or is not on the shelf replacing the entire environment at all, Acosta merchandisers remedy with Dell PowerEdge hardware,” the situation. says Mark Chaffin, CIO of Acosta. “A Dell PowerEdge R900 server costs Acosta’s extensive business intelligence significantly less than what Acosta operations depend on its data paid for the HP Superdome and has warehouse with two terabytes of considerably more power.” data. The data warehouse enables j^[YecfWdojeZ_h[Yj_ji*"+&&h[jW_b Getting out from under the Superdome coverage merchandisers to find the also meant leaving behind high products that are likely to be out-of- maintenance and administration stock, and report to clients on what it costs. Dell is the standard platform for has done to maximize opportunities Acosta’s Web servers, its application for sales. In addition, the agency loads servers that run Microsoft Office 1109rcp_Dell_Insert 10/14/09 4:10 PM Page 3
“WITH THE POWEREDGE R900 AND THE DATA COMPRESSION WE GET FROM SQL SERVER, WE’RE LOOKING AT ADDING THREE TO FOUR TERABYTES PER YEAR FOR THE NEXT YEAR OR TWO AND WE’LL STILL HAVE FAST PERFORMANCE.”
Mark Chaffin, CIO, Acosta
SharePoint, Microsoft Exchange and “We had access to three Microsoft Dell servers, we can generate reports Microsoft Active Directory, as well engineers and two outside consultants 50 percent faster,” says West. as for desktops and laptops. Current to help us improve the performance models in use at Acosta include Dell of the database,” says West. “But 20-50% FASTER QUERY OptiPlex™ 960 desktop with Intel Core™ from day one, when we installed PROCESSING (fheY[iiehiWdZ:[bbBWj_jkZ[;,*&& our database and packages on the Microsoft SQL Server 2008 Analysis laptops with Intel Core 2 processors. Dell servers, we saw a 50 percent Services provide an online analytical performance increase without touching processing (OLAP) engine for making “Proprietary servers may be okay the code at all.” WZ^eYgk[h_[iki_d]ckbj_Z_c[di_edWb for those who have the money and data cubes. The performance of the patience, but we choose to be Acosta has a four-hour window for j^ei[gk[h_[iedj^[Ikf[hZec[mWi more competitive and spend our loading data each night, and prior to frustratingly slow. resources on a broad set of strategic migrating to SQL Server 2008 and initiatives and goals instead of closed, Dell PowerEdge servers, the loading The improvements in Microsoft SQL proprietary hardware and software. process took the full four hours. With Server 2008 on Dell PowerEdge R900 7bie"j^[?dj[bN[ed-*&&i[h_[i the new SQL Server 2008 database servers are having an immediate impact processors are more scalable and software and the Dell Xeon powered on users, according to Thompson, stable than the Itanium® architecture servers, it takes two hours. Loading fWhj_YkbWhboX[YWki[e\gk[ho we were using,” says Chaffin. is performed by Microsoft SQL Server performance. “Our users include 500 Integration Services. The improvements 9F=YecfWdoki[hiWim[bbWi*"&&& 50% FASTER DATA LOADS in its performance are making Acosta of our own associates,” he says. “Their Acosta migrated to multiple Dell employees more productive. gk[h_[iWh[hkdd_d]Wjb[Wij(&#je#+& PowerEdge R900 servers at the same f[hY[dj\Wij[h$7gk[hoj^WjjeeaW time it upgraded from Microsoft SQL “We have a service-level agreement c_dkj[jefheY[iidemjWa[i*&eh Server 2005 to 2008. To mitigate the (SLA) to be up from 8 a.m. to 8 p.m. for 30 seconds. The CPG companies we risk of porting both hardware and our associates,” says West. “But with serve are more productive, and that’s software at the same time, Acosta SQL Server 2005 on the HP Superdome, something they can appreciate.” sent Dennis Thompson, director of a couple of times a week we were not enterprise information, and Steve up by 8 a.m. Now those problems are 50% FASTER BACKUPS AND West, data warehouse developer, to gone, and we can meet our SLAs.” PROCESSING PERFORMANCE the Microsoft Technology Center in Microsoft SQL Server 2008 improved Atlanta for three weeks of testing the Acosta uses Microsoft SQL Server data and backup compression. “Our data warehouse on Dell PowerEdge Reporting Services to generate its database used to be four terabytes, but R900 servers running Microsoft SQL mission-critical reports to its associates now it’s less than two terabytes,” says Server 2008. and clients. “With SQL Server 2008 on Thompson. “Our maintenance window 1109rcp_Dell_Insert 10/14/09 4:10 PM Page 4
for backups was four hours, but with Competition is intense among sales and Dell PowerEdge 900 servers we’re marketing agencies. Acosta stays ahead doing the database backups in two of its competitors by making smart hours.” Uncompressed data has to be choices about business intelligence and read off the disk. Compressed data is the software and hardware that support uncompressed on the processor, which it. Thompson states, “SQL Server and is much faster than the disk drives. Dell platforms will help us continue to stay ahead over the next few years.” “With the R900 and the data compression we get from SQL Server, SAVING WITH VIRTUALIZATION we can plan to have more data,” Acosta has also recently moved its says Chaffin. “We’re looking at adding Virtual Environment to five Dell R900’s three to four terabytes per year for with four Intel Xeon X7350 processors. the next year or two and we’ll still have They utilize VMware ESX 3.5 with NFS fast performance.” as its storage protocol. Currently they ^Wl['+*l_hjkWbcWY^_d[i^eij[Zed LOWER LICENSING AND j^[Ól[H/&&^eiji"m^_Y^[gkWj[i POWER COSTS to over 30 Virtual Machines per host. The Dell R900 has four CPU sockets The applications hosted on VMware and each socket is populated with an range anywhere from IIS Web Servers Intel Xeon six-core processor. With to SQL databases and even their entire the Microsoft SQL Server licensing production Citrix Farm is hosted on policy, customers are charged by the this environment. Even with all these socket instead of the CPU core. This machines utilization for their ESX farm can result in software cost savings stays consistently around 25-35%. since customers only purchase four SQL “Originally when we designed this Software licenses per server. “But those environment we said at 50 servers four physical processors are doing the we should break even on our initial mehae\(*fheY[iiehi"ie[l[hoj^_d] _dl[ijc[dj$M[Wh[demWj'+* is faster,” says Thompson. “Our gains virtual machines and believe 200 is in data load processing performance an attainable goal thanks to the come from the Dell servers. Twenty- R900’s,” concludes Craig Tilden, four cores, which the operating system technology engineering and delivery i[[iWi(*fheY[iiehi"YWdfheY[iij^[ manager, Acosta. same amount of data in half the time compared to the Superdome.” To read additional case studies, go to: DELL.COM/casestudies Acosta is also excited about the power savings that have resulted from its migration from HP Superdome to the Dell PowerEdge R900. “The HP Superdome is a very large server,” says J^ecfied$Ç?jYedikc[igk_j[WX_je\ electric power, whereas the Dell R900 i[hl[hiYedikc[h)&#*&f[hY[djb[ii power than the Superdome.”
SIMPLIFY YOUR TOTAL SOLUTION AT DELL.COM/Simplify
7k]kij(&&/ ?dj[b"?dj[bN[edWdZ?jWd_kcWh[h[]_ij[h[ZjhWZ[cWhaie\?dj[b9ehfehWj_ed_dj^[Kd_j[ZIjWj[i eh ej^[h Yekdjh_[i$ 7Yj_l[ :_h[Yjeho"C_Yheie\j" I^Wh[Fe_dj" IGB I[hl[h WdZ M_dZemi I[hl[h Wh[ [_j^[hh[]_ij[h[ZjhWZ[cWhaiehjhWZ[cWhaie\C_Yheie\j9ehfehWj_ed_dj^[Kd_j[ZIjWj[iWdZ%eh ej^[hYekdjh_[i$J^_iYWi[ijkZo_i\eh_d\ehcWj_edWbfkhfei[iedbo$:;BBC7A;IDEM7HH7DJ?;I" ;NFH;IIEH?CFB?;:"?DJ>?I97I;IJK:O$ released research indicating that 2009 spending on managed some sort of outage. And I’d start by saying, ‘You know, if we had services by SMBs will grow 9.2 percent over the 2008 revenues. monitoring in place, we could have caught that and it would have According to Techaisle, managed-services spending for 2009 is helped.’ People just weren’t biting on that. Part of that, I think, was expected to reach $14.3 billion worldwide among SMBs, which are maybe that it was three years ago. But even today, if any of our people here defi ned as companies with fewer than 1,000 employees. use the word monitoring, I’ll immediately correct [that].” Starting from the right place matters too, Clouser adds: “When I meet with a prospective client, I want to know what most frustrates What MSP messages them about their technology, and then focus with them on how we, 2 are working now? as an outsourced MSP, can take that frustration away. In partnership with them, we’re trying to extend—or become—their IT staff .” Messaging among successful MSPs—and language that custom- DataPro’s Cook is having success by steering conversations ers are looking for—is changing, as well. toward the cost of downtime. “We found that people are much more In the large Forrester study, the fi rm found diff erent motivations interested in talking about our managed services when we can talk for buying managed services among the 2,300 IT respondents. about the cost of their network not working. It’s one thing to talk Comparing results to previous years, Forrester noted that cost about the cost of care and maintaining a network. That’s a big part. savings was no longer the top reason for going with managed But it’s also the loss of productivity when that network isn’t available services. The motivation, for both enterprises and SMBs, was that we’re fi nding people are really interested in,” Cook says. related but more subtle; they wanted to use managed services for low-level infrastructure jobs such as keeping the network running so they could, instead, focus on their core business competencies. In Is it too late to get started other words, when your business landscape is shifting around you 3 daily, do you want your employees focusing on how to provide as an MSP? unique value to your customers or do you want them doing admin- There’s some faint talk in the industry that the MSP market istration and maintenance work on the Exchange Server? opportunity was just a moment, and that moment is ending. ACP’s Pearce is seeing exactly that trend among his existing That’s not the sense we got from the MSPs we talked to. customer base, who are actually willing to pay more at the moment To be sure, many more traditional break-fi x companies have to have more networking grunt work taken off their plates. been opening up managed-services shops inside their businesses. “We’ve gone in and raised our rates, or we have a fee system in Clouser notes: “We’ve probably seen more direct competition this place where every client we have in the next six months has been last year than we ever have before. I’d attribute that to these reces- sionary times.” But that’s not to say the market is even close to overcrowded, he “I defi nitely think that now is the time adds: “We need to all remember that the number of devices that are managed is to be out there grabbing the market.” something like 3 percent. The number is Ted Clouser, Executive Vice President, PC Assistance very, very small. So there’s a ton of space to go out and grab—there has been and there continues to be. And we certainly categorized into diff erent levels or diff erent programs. We’re raising can all jump on board and get on it.” rates but we’re also showing them the value of why we’re raising Cook agrees. “A large, large amount of our customers are small those rates. We haven’t had one company come back to us and say, businesses, and the opportunity is really wide open. Even in our ‘No we can’t do that,’ or, ‘No, it’s not worth it.’ They truly do see the town, we have three really strong MSPs, and I run into them value in us raising the rates,” Pearce says. maybe once or twice a month, so it’s defi nitely open,” he says. Less specifi c to macroeconomics is using the right language, PC The other thing about managed services is that it’s diffi cult to Assistance’s Clouser has found. “I’d spent a lot of time talking about do properly. Buying a toolkit and marketing the service doesn’t ‘monitoring,’ and that was a big no-no. People place very little value make an existing value-added reseller (VAR) a good MSP. on the word ‘monitoring.’ Changing that to ‘managed’—and saying “There’s a lot of opportunity out there, and I think that people that monitoring was simply a portion of it—made a diff erence,” he are giving it a shot. But I think it’s important to spend a whole lot explains. “The perfect time to bring it up was when someone had of time studying it, and making sure that you do it to the best of
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 33 RCP FEATURE | MSP MARKET
your abilities,” Clouser advises new entrants. He’s not just being altruistic on that point. “The biggest thing I think that can be detrimental to the managed service industry is doing it wrong,” he adds. While a botched engagement is an opportunity for experi- LET’S MAKE A DEAL enced MSPs to step in, it also leaves these customers wondering if With MSP partners joining CompTIA, managed their experience speaks badly of the MSP business model or the services get a bigger megaphone. specifi c MSP that was managing the account. And that’s a signifi - One of the longest-running issues in the managed services cantly harder sale to make for those experienced companies like provider (MSP) industry is the lack of widespread awareness PC Assistance. among customers of the managed-services option. The publicity While none of the MSPs we spoke with felt the market was over- surrounding Dell Inc.’s acquisition of Silverback Technologies Inc. crowded, all have noticed a sea change in customer awareness in 2007 provided a big boost for MSP awareness. Another boost about the potential benefi ts of enlisting the services of an MSP. The could come from a recent merger. biggest factor was Dell Inc.’s 2007 acquisition of Silverback In September, CompTIA Inc., the huge trade association for Technologies Inc. and its subsequent advertising of the service. the global IT industry, entered into an agreement to assume “When we fi rst started with managed services in 2005, people the operations of MSP Partners. With the smaller industry really didn’t know what it was,” Clouser says. “When you [were] association becoming an integral part of CompTIA, managed going out and talking about something, you [were] trying to pitch services could see its profi le rise within the IT community. something that really was foreign. Quite honestly, one of the best Already, CompTIA ran and published some results of a survey things that happened in the MSP market [was] Dell putting some of end users on their attitudes toward managed services, and money into advertising it. So people learned about it—and prob- of MSPs on their revenue expectations for next year. ably didn’t want to use Dell because they didn’t have that personal Jim Hamilton, executive director of MSP Partners, will run touch. They come to firms like ours, and they’re looking for the MSP organization inside CompTIA, assuming closing something that they’re now educated about and [see as] a local conditions for the deal are met. presence. It was a tremendous help for us, in my opinion.” In addition to the publicity bounce, the deal also has the In New York, Pearce saw the same eff ect from Dell’s moves potential to broaden MSP Partners’ perceived scope beyond into the market. “I think people are more educated now about the interests of member vendors. MSP Partners was founded MSPs,” he says. “As they learn what we can do for them, we save in 2007 by Cisco Systems Inc., Ingram Micro Inc., Intel Corp., them money [and] make their experience with their technology Level Platforms Inc. and Microsoft. Platinum partners include better. We also educate them going down the road, trying to sell EMC Corp., Google Apps and Hewlett-Packard Co. [Disclosure: them a service.” Redmond Channel Partner magazine is a media sponsor of MSP Partners.—Ed.] Is there conflict The CompTIA move follows several moves by the between cloud organization over the past year to expand its engagement with 4 computing and MSPs? IT channel organizations. —S.B. As cloud computing matures, there’s a sense that it comes increas- ingly into conflict with managed services. One of the closest observers—and biggest proponents—of the MSP industry, Weaver says many MSPs are putting together their fi rst cloud- Charles Weaver, doesn’t see the managed-services industry and based services, many of which are focused on backup and storage cloud computing as mutually exclusive. That aside, Weaver, the or security. Weaver doesn’t expect the cloud-computing eff orts of president of the Chico, Calif.-based MSPAlliance, contends that big vendors like Microsoft, Google Inc., Amazon.com Inc. and every MSP had better have a cloud strategy. IBM Corp. to negatively impact MSPs. “If you don’t know what your company’s cloud strategy is, my But there’s some indication that the biggest guys won’t be able to suggestion is: Get one. Not only is cloud computing a viable access MSPs’ potential customers with their cloud solutions without service-delivery mechanism, it’s also something that your clients the help of those very same MSPs. The Techaisle report found that will be asking you for, if they aren’t already,” Weaver wrote in a “[more than] 36 percent of managed-services spending by SMBs in recent blog posting. “Firms that don’t have [a cloud strategy] will 2009 will be made by 10-49 employee size categories, making it the be at signifi cant risk.” most lucrative target segment but also the most diffi cult to reach.”
34 Redmond Channel Partner NOVEMBER 2009 RCPmag.com Statement of Ownership, Management and Circulation (Required by 39 U.S.C. 3685, United States Postal Service)
1. Title of Publication: Redmond Channel Partner 2. Publication No. 1556-2727 3. Filing Date: 09/30/09 4. Frequency of Issue: Monthly 5. No. of issues published annually: 12 6. Annual Subscription Price: US $39.95, Canada/Mexico $54.95, International $64.95 7. Mailing address of known offi ce of publication: 9121 Oakdale Ave., Ste. 101, Chatsworth, CA 91311 8. Mailing address of the headquarters of general business offi ces of the publisher: Same as above. 9. Name and complete mailing address of Publisher, Editor, and Managing Editor: Henry Allain, President, 16261 Laguna Canyon Rd., Ste. 130, Irvine, CA 92618 What happens to the Matt N. Morollo, Publisher, 600 Worcester Rd., Ste. 204, Framingham, MA 01702 MSP market when Doug Barney, VP/Editorial Director, 600 Worcester Rd., Ste. 204, Framingham, MA 01702 5 Wendy Gonchar, Managing Editor, 16261 Laguna Canyon Rd., Ste. 130, Irvine, CA 92618 10. Owner (s): 1105 Media, Inc, dba: 101communications LLC, 9121 Oakdale Ave., Ste. 101, Chatsworth, CA the recession ends? 91311. Listing of shareholders in 1105 Media, Inc. 11. Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or more of If the conventional wisdom indicates that MSPs are perform- the Total Amount of Bonds, Mortgages or Other Securities: ing better in the recession than IT as a whole, that suggests Nautic Partners V, L.P., 50 Kennedy Plaza, 12th Flr., Providence, RI 02903 Kennedy Plaza Partners III, LLC, 50 Kennedy Plaza, 12th Flr., Providence, RI 02903 that the opposite could be true when the recession ends. A lot Alta Communications 1X, L.P., 1X-B, L.P., Assoc., LLC, 200 Clarendon St., Flr. 51, Boston, MA 02116 of signs indicate, however, that the MSP model could 12. The tax status has not changed during the preceding 12 months. 13. Publication Title: Redmond Channel Partner continue to do very well. 14. Issue date for Circulation Data Below: September 2009 For one thing, an economic recovery is far from assured, 15. Extent & Nature of Circulation: and, even if the economy bounces back, few expect employ- Average No. Copies Each Month No. Copies of Single Issue ment to surge. A Duke University/CFO magazine survey of During Preceding 12 Months Published Nearest to Filing Date 650 companies released in late September contained some a. Total Number of Copies especially sobering fi gures. The CFOs said their workforces (Net Press Run) 27,829 25,440 were 6 percent below 2007 levels. Asked how long they b. Legitimate Paid/and or Requested Distribution expected it to take for employment to return to those levels, 1. Outside County Paid/Requested they estimated they’d drop more employees in 2010 and Mail Subscriptions Stated on PS Form 3541 24,994 24,984 rehire half of the employees they’d let go by 2012. On aver- 2. In-County Paid/Requested age, the CFOs estimated that a quarter of the jobs would Mail Subscriptions Stated on never be restored. So there’s a good chance that, even with PS Form 3541 7 14 a recovery, the market MSPs wade into over the next few 3. Sales Through Dealers and Carriers, Street Vendors, years will be very similar to the market of the last few years. Counter Sales, and Other Paid Analysts at Techaisle project 9.6 percent growth in MSP or Requested Distribution Outside USPS® 5 2 spending by SMBs in 2010 to $15.7 billion worldwide. 4. Requested Copies Distributed According to Techaisle analyst Anurag Agrawal, “SMBs are by Other Mail Classes Through now looking beyond infrastructure investments as their the USPS 0 0 respective countries slowly emerge from the global down- c. Total Paid and/or Requested turn. With continuing education by vendors and channels, Circulation 25,006 25,000 SMBs have begun embracing managed services with d. Nonrequested Distribution 1. Outside County Nonrequested cautious optimism.” Copies Stated on PS Meanwhile, Microsoft CEO Steve Ballmer has been Form 3541 1,815 0 talking about the global economy being in a “reset.” Two 2. In-County Nonrequested Copies Distribution Stated on things that many companies will probably have learned PS Form 3541 0 0 from the recession—even if it ends in strong growth—is 3. Nonrequested Copies Distribution that they can get by with less and that getting out of the Through the USPS by Other Classes of Mail 0 0 business of managing their own IT infrastructure can be a 4. Nonrequested Copies very good move. That’s actually a message that was gain- Distributed Outside the Mail 645 122 ing traction before the recession hit—and the MSP market e. Total Nonrequested Distribution 2,460 122 rode that wave before 2008. f. Total Distribution 27,466 25,122
At the risk of sounding like a partisan politician—take g. Copies not Distributed 363 318 your pick between those who off er lower taxes or a new h. Total 27,829 25,440 government program as a solution to every problem—the i. Percent Paid and/or MSP business model seems to have a decent future no Requested Circulation 91.04% 99.51% matter whether the economy goes up, down or sideways. • 16. Publication of Statement of Ownership for a Requester Publication is required and will be printed in the November 2009 issue of this publication.
17. I certify that all information furnished on this form is true and complete:
Scott Bekker ([email protected]) is editor in Abraham Langer, Senior Vice President, Audience Development and Digital Media chief of Redmond Channel Partner magazine.
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 35 Project1 10/16/09 8:19 AM Page 1
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Connie Arentson, newly appointed president, and Arlin Sorensen, CEO and partner, lead HTS’ six locations in America’s Heartland. The Heart of the Matter With six locations across fi ve states in America’s heartland, using the MSP model and deploying Zenith services allows Heartland Technology Solutions to leverage internal and external resources to off er its customers solutions. By Jabulani Leff all
At fi rst glance, a cursory Web search for common leadership, management and Heartland Technology Solutions could back-end processes. Because we are PROFILE give you the sense that there are many spread out we defi nitely have a lot of kArlin Sorensen companies of the same name spread area to cover from a geographic and kCEO and Partner out across diff erent areas of America’s— services perspective.” k Heartland Technology Solutions for lack of a better term—Heartland. In 2000, Arlin founded Heartland Such locales include Harlan and Tech Group (HTG), an international SERVICES OFFERED Ames, Iowa, as well as Joplin, Mo., and peer group organization focused on IT services and support, Newton, Kan. There are listings in business improvement, accountabil- network administration, IT Nebraska and Oklahoma, too. But this ity, and life-work excellence among planning and resource isn’t a case of copyright infringement. leading IT solution providers like management Heartland Technology Solutions (HTS) HTS. Arlin launched the fi rst HTG peer www.heartlandtechnologies.com is the company and these locations group in 2001 based on his desire for have been brought together through a an opportunity to interact with peers series of mergers and acquisitions over in a non-competitive setting and the last six years to form the company on his observation of a lack of peer as it is today. groups in the small to midsize busi- HTS was established in 2003 ness partner space. HTG now has 240 through the merger of SCCI of Harlan, member companies throughout the Iowa and Connecting Point of Joplin, United States, Canada and the United Mo. The parent organizations were Kingdom, spread over 20 groups of 12 both established in 1985. The newly non-competing member companies. formed HTS then acquired Beacon HTS, the VAR he founded in 1985, Micro of Ames, Iowa, in 2003 and Busi- is an active member of HTG. Groups ness Computer Center with offi ces in meet quarterly for a confi dential two- Kansas and Oklahoma in 2006. day event of sharing best practices, “We’ve been in business since 1985,” operational “know how,” fi nancial says company CEO Arlin Sorensen. “We benchmarking, process improvement operate like six smaller companies with and member business review. HTG Project1 10/16/09 8:19 AM Page 2
also provides accountability that helps downed network or a processing issue, drive members toward personal and is a sign of remediation. In other words, business growth through execution. a swift reaction to a given problem While each HTG member company shows that business is being taken care operates as an independent entity, of but, in reality, what’s really happen- members leverage distributor and ing is “busy-ness.” vendor relationships for the benefi t of This is where the managed all. Key turning points in HTG’s evolu- services component becomes a tion have been strategic relationships valuable proposition for VARs, channel with Ingram Micro Inc. and partners and the company needing ConnectWise. Both have led to in- these services. creased value to HTG members and a “Our goal was to deal with things solid base of VARs to get involved in through proactive management in- the groups. Beyond being a Microsoft stead of being reactive,” says Sorensen. Gold Certifi ed Partner, HTS counts “With most of our clients there are few, Hewlett-Packard Co. and SonicWALL as if any, systems or network administra- its strategic technology partners. “... with the MSP tors employed. They can’t aff ord a full- One of HTS’ newest partners, with approach everyone time IT person. So with the managed which it has a deep working rela- services approach, everyone has the tionship, is Zenith Infotech Ltd. HTS has the opportunity opportunity to increase service, engaged with Zenith in 2006, soon control costs and still keep the after the company started realizing to defray cost accountability quotient intact.” the value being delivered to other HTG and still keep the That accountability, Sorensen peer group members, which ultimately opines, comes from customizing led to HTS’ fi rst foray into the accountability services to meet client needs on a case- managed services business. quotient intact.” by-case basis and creating the type “It was actually through our peer of unique infrastructure and commu- group that we got wind of Zenith,” Arlin Sorensen, CEO and Partner, nication apparatus that makes all the Sorensen remembers. “We realized that Heartland Technology Solutions stakeholders happy. adding managed services elements to “We found that Zenith was unique our service off ering was a way to off er when we fi rst stepped into this space,” clients a higher level of service with model deploying Zenith allows us to Sorensen recalls. “We started out with much quicker response.” leverage our own engineers as well as another solution and found that we Sorensen says there was a trial and their resources, so we have expedited weren’t satisfi ed with our service-level error period where HTS sought out response and repair time,” Sorensen agreements and follow-through. partners with similar services as Zenith explains. “Zenith handles our back- Then we came across Zenith, which we but found in many cases that the abil- end help-desk alerts and system found could give us the ability to be ity to manage client systems off -site monitoring so our engineers can focus up and alert 24x7 and still able to keep was not up to snuff . Moreover, the re- on higher value work for our clients, that intimacy with our clients. What occurring revenue potential available rather than spending time on basic can be better than that?” from a partnership with Zenith proved network issues.” too tempting to pass up in the fi nal This helps HTS focus on its own analysis, Sorensen adds. MSP off ering, a methodology that it off ers to new and existing clients called Fostering Quicker Response “EncompassIT.” Through EncompassIT, Sponsored by If you’re a small company with big clients get remote systems administra- tasks similar to those of HTS, tion, remote off -site storage, rewallfi consolidating client help-desk and network monitoring, optimized operations and being able to provide desktop and server support, as well as backup and recovery solutions from total desktop and spam management; a remote location are what make the services that encompass everything. relationship with Zenith a winning combination, according to HTS’ Proaction vs. Reaction senior staff . One of the misnomers in the IT com- “We’ve got six locations across fi ve munity is that response to a particular VISIT ZENITHINFOTECH.COM TO GET STARTED! states and using the managed services issue, whether it be system security, a Project2 9/25/09 3:31 PM Page 1
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Redmond Channel Partner ✱ NOVEMBER 2009 Dan LaBianca Associate Publisher AD INDEX 818-674-3416 tel Advertiser Page URL 509-267-8965 fax [email protected] BackupAssist Backup Software 2 www.backupassist.com Dell C2, 1, 20, 21, C4 www.dell.com Diskeeper C3 www.diskeeper.com Lenovo 5 www.lenovo.com Microsoft IT CERTIFICATION & TRAINING Redmond Channel Partner 27, 29 RCPmag.com SharePoint Virtual Conference & Expo 38 http://sharepointvcx.com Danna Vedder Al Tiano Zenith Infotech 6, 7, 14, 15, 36, 37 www.zenithinfotech.com Microsoft Account Manager Advertising Sales Manager 253-514-8015 phone 818-814-5227 ph 775-514-0350 fax 818-734-1529 fax EDITORIAL INDEX [email protected] [email protected] Adobe Systems Inc. 12 www.adobe.com Amazon.com Inc. 34 www.amazon.com PRODUCTION Apple Inc. 22 www.apple.com Jenny Hernandez-Asandas Cisco Systems Inc. 10, 34 www.cisco.com SALES STAFF Director, Print Production CompTIA Inc. 34 www.comptia.org Tanya Egenolf 818-814-5289 ph Advertising Sales Associate 818-734-1528 fax Computer Generated Solutions Inc. 11 www.cgsinc.com 760-722-5494 phone [email protected] Dell Inc. 8, 33 www.dell.com 760-722-5495 fax EMC Corp. 34 www.emc.com [email protected] Serena Barnes Fullscope Inc. 11 www.fullscope.com Production Coordinator Google Inc. 9, 22, 34 www.google.com [email protected] Hewlett-Packard Co. 8, 34 www.hp.com 818-814-5367 ph IBM Corp. 8, 9, 34, 40 www.ibm.com [email protected] Ingram Micro Inc. 34 www.ingrammicro.com Intel Corp. 12, 34 www.intel.com Level Platforms Inc. 34 www.levelplatforms.com Corporate Headquarters: Technical inaccuracies may result LS Retail EHF 11 www.lsretail.com 1105 Media from printing errors and/or new Novell 22 www.novell.com 9121 Oakdale Ave. Ste 101 developments in the industry. Chatsworth, CA 91311 Oracle Corp. 11, 40 www.oracle.com www.1105media.com Redmond Channel Partner (ISSN Perot Systems Inc. 8, 19 www.perotsystems.com 1556-2727) is published monthly by Reprints: For single article reprints 1105 Media, Inc., 9121 Oakdale Salesforce.com Inc. 10, 26 www.salesforce.com (in minimum quantities of Avenue, Ste. 101, Chatsworth, CA SAP AG 11 www.sap.com 250-500), e-prints, plaques and 91311. Periodicals postage paid at Sun Microsystems Inc. 22 www.sun.com posters contact: Chatsworth, CA 91311-9998, and at PARS International additional mailing offi ces. To-Increase Denmark A/S 11 www.to-increase.com Phone: 212-221-9595 Complimentary subscriptions are E-mail: [email protected] sent to qualifying subscribers. www.magreprints.com/Quick Annual subscription rates for non- Quote.asp qualifi edsubscribers are: U.S. $39.95; Canada $54.95 (U.S. funds); List Rental: This publication’s s International ubscriber list, as well as other lists $64.95 (U.S. funds). from 1105 Media Inc., is available for rental. For more information, please Subscription inquiries, back issue contact our list manager Merit Direct: requests, and address changes: Phone: 914-368-1000 Mail to: Redmond Channel Partner, E-mail: [email protected] P.O. Box 2166, Skokie, IL 60076-2872, www.meritdirect.com/1105 e-mail [email protected] or call 866-293-3194 for U.S. & Canada; © Copyright 2009 by 1105 Media, Inc. 847-763-9560 for International, All rights reserved. Printed in the fax 847-763-9564. U.S.A. Reproductions in whole or part prohibited except by written permis- POSTMASTER: Send address sion. Mail requests to “Permissions changes to Redmond Channel Editor,” c/o RCPmagazine, 16261 Partner, P.O. Box 2166, Skokie, IL Laguna Canyon Road, Ste. 130, Irvine, 60076-9282. Canada Publications CA 92618. Mail Agreement No: 40612608. Return Undeliverable Canadian The information in this magazine has Addresses to Circulation Dept. or not undergone any formal testing Bleuchip International, P.O. Box by 1105 Media, Inc. and is distributed 25542, London, ON N6C 6B2. without any warranty expressed or implied. Implementation or use of Media Kits: any information contained herein is Direct your Media Kit requests to the reader’s sole responsibility. While Matt Morollo, VP Publishing: the information has been reviewed Phone: 508-532-1418 for accuracy, there is no guarantee Fax: 508-875-6622 that the same or similar results may E-mail: [email protected] be achieved in all environments.
RCPmag.com NOVEMBER 2009 Redmond Channel Partner 39 BY PAUL DEGROOT DIRECTIONS VISIT RCPMAG.COM FOR DEGROOT’S TAKE ON HOW THE CURRENT RAFT OF COMPETITION COULD PUSH MICROSOFT TO Ready, Set … DO ITS BEST AGAIN Wait and See RCPMAG.COM
services—typically the latest, untried and riskiest products or solutions. It will collect the experiences it has gained from the fi rst dozen or so major engagements. Then, the Microsoft’s message to partners is: You company will “harden” those experiences into templates that partners can use—after need to be our sales force as well as our intensive training and some hand-holding services force. from Microsoft—to deliver the services themselves. Finally, Microsoft will tell f all the things that Microsoft But when that “someone else” is customers who ask for services for a similar promised to do at the 2009 partners, there’s a problem. On one hand project to “call a partner.” Worldwide Partner Conference, are Microsoft’s beliefs that it can provide Services Ready does have one new and Othe most important may have enterprise software services better than potentially problematic element. It been something it promised not to do. anyone and that partners may not be includes a lot of marketing and sales In formally rolling out its Services Ready energetically promoting great software, material. Microsoft’s message to partners program for partners, the company said like Windows Vista. On the other hand, is: Responding to requests for proposals that once it turns a particular service when it comes to feet on the ground, isn’t enough—you need to be our sales off ering over to partners, it will no longer Microsoft is seriously outgunned by force as well as our services force. off er it directly to customers itself. competitors like IBM and Oracle. Microsoft Overall, Services Ready is a good idea. It’s not in Microsoft’s DNA to not do made the choice a long time ago to Every time Microsoft Services takes on an something. In fact, its overactivity is one of leverage a large partner community rather engagement that a partner’s capable of the company’s major weaknesses. Spooked than invest in a direct sales force capable of doing, it robs a partner not only of revenue, partly by its own miraculous ascent from a serving about 40 million business accounts but of experience and confi dence. This tiny group of BASIC experts to the world’s worldwide, many of which generate only a scenario can be devastating enough to largest software company, Microsoft is few hundred dollars a year in business. convince some partners to turn to competi- always wondering who will perform the Now the company can’t go back. And it tive solutions where the risk of competition same miracle and send it toppling. shouldn’t waffl e. That’s been the soap from the vendor itself may be lower. Combine that innate paranoia with opera for at least the last fi ve years: services But Services Ready won’t work in the gigantic cash fl ow, a pliant board and executives promising that the company long run unless Microsoft can convince not shareholders with endless patience, and wouldn’t compete with partners except in only partners, but itself, that partners can you get a company that sinks billions— the most extenuating circumstances. This perform and Microsoft can design a compounded, we’re probably talking $30 was followed by recognition that Redmond program the helps them do so. If the billion by now—into losers such as online was indeed ramping up services and program doesn’t meet its initial goals, portals, game consoles and Internet search, turning them into a profi t center. Microsoft will need to commit to fi x the which have nothing to do with the Partners who lived by the maxim, program to make it work for customers and company’s core software business. “watch what they do, not what they say,” partners, rather than hop aboard the Redmond believes it can do anything better saw a fairly consistent pattern: a services pendulum and ride back to its usual than anyone else—and at the same time group ready to jump in whenever it starting place. • fears that the previous statement isn’t true. perceived a gap between what it thought Consequently, the company never asks, customers should be demanding and what “Why should we do that?” Even if Microsoft partners should be supplying. Paul DeGroot (pdegroot@directionsonmi- did ask the question, the answer would The story this time is as follows: crosoft.com) is a senior analyst with always be, “Because someone else might.” Microsoft will start with bleeding-edge Directions on Microsoft, a Kirkland, Wash.-based independent research fi rm focused exclusively on Microsoft strategies Next Time: A Look at the SPLA and technology.
40 Redmond Channel Partner NOVEMBER 2009 RCPmag.com Project6 10/15/09 3:59 PM Page 1
What if fragmentation never happened in the first place?
Imagine a system that doesn’t spend I/Os on defragmentation, just production. Servers, workstations and laptops would experience new levels of speed and efficiency.
Productive system life would last far longer.
Is it possible?
You owe it to your clients to find out.
www.diskeeper.com/fragmentation-never-happens
©2009 Diskeeper Corporation. All Rights Reserved. Project10 2/4/09 3:24 PM Page 1
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