General DataComm Woos The Channel, IBM Bolsters CommitmentBy Elias Hajjar | Print
Hewlett-Packard evaluates direct sales and Wal-Mart joins the computer retail channel. Read all about it and more in our Channel News Digest for the week of Nov. 17.
General DataComm unveiled a new channel program last week. The company plans to sell its InnovX routers, switches and access merchandise to enterprise customers solely through company partners. George Best, vice president of sales and marketing, noted that partners in the program could earn margins of up to 30 percent, with the intent to employ a leasing program. General DataComm believes it can fill voids in networking giant Cisco Systems' product line with its new enterprise program. The enterprise products include InnovX FastRoute ($895 an up) and InnovX FastSwitch ($795 and up).
IBM, in separate announcements last week, said it is trimming and growing its operations. On one hand, company officials announced an attempt to restructure operations by cutting nearly 200 jobs in its software sector. IBM Spokesman John Reilly said employees affected by the cut can search for work elsewhere within the company. That 'elsewhere' could well be the channel. IBM expects in January to expand global software sales and technical personnel by nearly 30 percent.
Siebel Systems is still toying with its sales model as it targets the midmarket. Last week Siebel Chairman and CEO Tom Seibel said he was contemplating indirect channel relationships to pursue the midmarket. According to Siebel, the company's primary thrust into the midmarket is a result of Project Nexus, a companywide attempt to modify the company's software into components for the Microsoft .Net or J2EE framework. Siebel also said the company will make a combination of licensing models available in 2004 for its hosted and on-premise applications that allow consumers to mix and match term licenses, subscription licenses and perpetual licenses for any Siebel software.
Also last week, Hewlett-Packard CEO Carly Fiorina said the company plans to use direct sales and add-on sales to boost commercial margins next year, even as CFO Bob Wayman acknowledged that the company's cost of selling direct is higher than through the channel.
Prices, Policies and Spifs
Cisco is teaming up with Trend Micro, Symantec and Network Associates under the new Cisco Network Admission Control program to thwart worms and viruses. The program is part of Cisco's Self-Defending Network Initiative, designed to develop networks that can recognize, stop and adjust to security threats.
SUSE Linux is offering a 40 percent discount on Linux software purchased through CCV Software or RICIS to all educational and nonprofit customers.
A key Sun sales executive defected to Microsoft. Barbara Gordon left her position as vice president of worldwide sales at Sun Microsystems to become the vice president of Microsoft's global accounts. Gordon will be in charge of Microsoft's top 50 accounts. Current Sun executive John Halliwell is expected to be Gordon's replacement.
IBM's Frank Vitagliano has been promoted from vice president of distribution channels management for the Personal Computing Division to vice president of worldwide distribution channels for Global Business Partners, Sales and Distribution. Vitagliano will be accountable for global relations and global revenue for the company's top Intel distributors.
Former top Acer European executive Rudi Schmidleithner has been named president of the company's Pan American Operations. Schmidleithner replaces Patrick Lin, who accepted a senior management position with Acer IT Products Business Group in Taipei.
Mergers & Acquisitions
SCO officials said they have no intention at this time to file an injunction blocking the Novell-SUSE merger. But once the deal is complete, SCO does plan to implement a non-compete agreement with Novell.
The European Union has extended its review of Oracle's $7.5 billion bid for PeopleSoft. The EU will direct its investigation on enterprise application software and possibly database markets where Oracle is strong.
High-Tech jobs continue to decline this year, as employers are on route to let go another 234,000 high-tech workers, according to figures assembled AeA. The trade group's figures show that the high-tech industry will close this year with approximately 5.73 million employees, following the loss of 540,000 jobs last year. But William Archey, the AeA's president and chief executive officer, predicted a growth in high-tech jobs in the spring.
InfoTech issued a report predicting that approximately 80 percent of U.S. enterprises will install wireless LANs by the year 2008. Currently, almost half of the nation's companies have installed WLANs. Additionally, 40 percent of users will install wireless technologies within five years.
Elsewhere in the News
Wal-Mart may include laptop computers in its product line in 2004, according to news sources. A number of laptop makers, including Arima, Quanta, Compal Electronics and Wistron, are expected to provide PCs for Wal-Mart's new line. Wal-Mart may enter into the market with a sub-$800 product, using a Celeron 2.5 GHz processor and 256 Mbytes of RAM; an Athlon XP 2000 Processor with 256 Mbytes of RAM; or a Pentium 4 with a 2.6 GHz processor and 512 Mbytes Ram.