The Eight Strategic Channel Stories of 2008
It was another turbulent year for the channel as technology breakthroughs, mergers and acquisitions and economic uncertainty dominated the landscape. A look back at the eight most strategic articles published on ITChannelPlanet.com.
HP dominated channel sales again this year in the face of renewed competition from Dell and Acer. But HP drew some criticism for a lack of communication about its channel plans. In a mid-December interview with ITChannelPlanet.com Tom LaRocca, HP vice president of strategy and marketing, solution partners organization, Americas, outlined some of the vendor's key channel objectives for 2009 and pledged to continue working more closely with HP's channel partners.
Mergers and acquisitions were an important part of the channel's growth in 2008. Using venture capital funds, two channel veterans targeted resellers in Dallas, Chicago and the east coast to better serve the mid-sized business customer with a channel business model that emphasizes consultation, integration and software development. Executives predicted as many as eight acquisitions by the middle of 2009.
New market opportunities translate into added profits for channel partners. One of the most interesting areas to emerge in 2008 was the eDiscovery market. In mid-November, a deal with systems integrator CACI underscored the growing reliance by government agencies on third parties to fulfill contract requirements in the growing vertical market.
A study of 1,000 channel executives by Blueroads Corp. discovered that a strategic shift was needed in partner programs to make them more effective. The emphasis should be on driving revenue rather than on channel tactics, Blueroads found. Many channel executives agreed.
Throughout the year, economic uncertainty grew among channel players. Future spending projections came into focus as the year progressed. And while IT spending increases slowed, a serious collapse wasn't foreseen. In mid-November, channel partners were urged to concentrate on services and building revenue streams to maintain their profitability. Virtualization, managed services and security were expected to remain robust areas.
Managed Services Move to Forefront
Managed services became a growing opportunity for the channel throughout the year. In mid-July ITChannelPlanet published a three-part series about the managed services market. The series found that the managed services market moved from a novelty to the mainstream for many VARs. Despite this fact, some resellers found themselves unprepared to capitalize on the opportunity. Some channel partners saw the chance to build a new revenue stream, but others were put off by the challenge of changing their business model and some feared the looming presence of hardware vendors in the market. In short, managed services were a mixed opportunity for VARs. Channel distributors, meanwhile, seized upon the managed-service market as a revenue opportunity. However, different distributors adopted different approaches to cracking the market.
The biggest channel acquisition of the year occurred in mid-May, when Hewlett-Packard's $13.9 billion purchase of systems integrator EDS was announced. Its completion more than doubled the size of HP's services business. Some thought this could pose a potential challenge to the company's current channel-oriented sales model in the enterprise services space. However, Mark Hurd, HP's CEO, said in a media briefing shortly after the deal was announced that HP would remain strongly committed to its channel partners.
Software as a Service (SaaS) became a dominant topic in the channel in 2008 as vendors, distributors and channel partners increasingly bolstered their SaaS offerings and businesses embraced the technology as a way to reduce expenses. As early as mid-April, distributor Ingram Micro broadens its managed service portfolio with three Microsoft-based hosted SaaS solutions for VARs. By year's end, many others had followed suit, and SaaS seemed to be everywhere.