Out of Conflict, Opportunity

By Michael Vizard  |  Posted 2008-07-23 Email Print this article Print
 
 
 
 
 
 
 

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Brocade's planned Foundry acquisition may look bad for the channel, but is it?

On the surface, the move by Brocade to acquire Foundry Systems for $3 billion is a recipe for channel conflict.

Brocade has made most of its money by selling products through OEM partners such as Hewlett-Packard and IBM, who in turn rely heavily on their channel partners to move Brocade’s products. Foundry, in contrast, has a modest channel effort because most of its efforts have focused on direct sales.

The folks at Brocade admit they don’t have all the particulars around their go-to-market strategy for the combined entity worked out just yet, but ideally the Foundry sales team might evolve over time to focus more on touching companies in support of channel partners rather than taking the deal direct.

Whatever comes of the acquisition, deals like this one are becoming inevitable because of the changing dynamics of the data center. Once upon a time, the data center was carved into distinct server, storage and networking segments. But with the advent of virtualization and a need to drive cost out of the hardware side of the IT equation, customers are asking vendors for a more integrated approach to data center solutions.

How far this trend will go is anybody’s guess. There may come a day when in order to control the account, Cisco Systems, for example, might see a compelling need to merge with a storage or server vendor.

The potential implications of all this vendor consolidation for the channel are immense. It’s still too early to say what vendor might be pairing up with whom, but solution providers need to start changing the way they approach data center sales. Instead of selling classes of products, customers are looking for solution providers that have a dedicated data center practice and skill set that helps them manage the data center is a more holistic fashion.

The data center is going through more change today than any time in the past 20 years.

But what customers don’t want to hear is how you’ve come to help them fix their server or storage problem. The problem is the delicate balance between server, storage and networking technologies that make up the data center. As such, customers expect their solution provider partners to help them manage the data center, not just a particular component.

Ultimately, the roles of the IT staff in the data center are also going to evolve as virtualization continues to evolve. Instead of managing components, IT people will be managing classes of services that are delivered using any number of virtual hardware resources.

This should allow them to get more utilization out of their existing hardware investments. But don’t kid yourself. Virtual environments are lot more dynamic than physical environments when it comes to managing them. As we all know, any time anybody uses the word dynamic to describe anything, what they are really saying is it’s a volatile situation. The good news is , as always, volatility equals opportunity for the channel.

Michael Vizard is Strategic Content Expert for Ziff Davis Enterprise. He can be reached at michael.vizard@ziffdavisenterprise.com.


 
 
 
 
 
 
 
 
 
























 
 
 
 
 
 

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