Mid-range Servers

• Back to the future: New opportunities in the mid-range server market
• Addressing the skills shortage
• In search of the Holy Grail: Partnering with software developers
• The more things change, the more they stay the same
• Turning competition into cooperation

In search of the Holy Grail: Partnering with software developers

Major vendors such as IBM and Microsoft have large communities of resellers on one side and software developers on the other. The majority of these businesses are small and don't have a lot of visibility. How well are vendors connecting these two sides for the benefit of everybody? Here's what our panel thought:

Kon Kakanis, Sundata (KK): It's very patchy. I say that as a reseller that engages with ISVs to jointly present customer solutions and as an ISV that wants to engage with vendors like IBM and Microsoft. As an ISV, your goals are not naturally aligned with those vendors so you have to work hard to find mutual benefit. We get assistance from time to time with certain vendors but it tends to be a personality thing: if the guy you are dealing with gets it then it goes forward; and if they don't, it doesn't. Most ISVs are coming from an environment where for the first three years the software is run on IBM, the next three it is on Dell and the next three it is on HP. They don't care because they get their maintenance agreement, training and software support. The alignment is not as natural as it is generally purported to be. It is difficult to align those goals.

Mark Johnston, Service Elements (MJ): Absolutely. It is the most challenging thing to make work. I used to own a hardware infrastructure business that was also in the business of reselling SAP to the SMB market. If you think it is difficult trying to get a hardware and software company to talk, try and get two reps from the same company to talk when they know the ins and outs of the company and how to get around it. I haven't given up on it but it's a difficult game. We have taken on some software products that complement the infrastructure and services we can deliver. For instance, IBM is also a software company and is a reasonably serious partner for us through the Tivoli business. But that's not going to drive iSeries infrastructure so we have partnerships with organisations that provide high availability software. Those relationships drive new footprints but I couldn't count the number of times I have met with software vendors. If we have something to talk about in the first three months then that's great but if we haven't then we probably never will.

KK: The average ISV sales cycle is 9-18 months; the average vendor sales cycle is the current measurement year. That is the basic challenge of aligning goals. If you are an infrastructure partner selling iSeries and engaging with an ISV, you have to understand that their goals are different. If you can reconcile them all you have a deal.

Matt Dargie, Computer Merchants (MD): We get a lot of help from IBM in forming alliances. We do a high availability product that has been really successful.

Norm Jeffries, Computer Merchants (NJ): We didn't want to do it. IBM approached us and arranged a meeting with one of the [software developer's] directors. We said we were happy to partner but didn't want to on-sell any products. I get approached at least once a week by a software company and probably half of those come from IBM.

Raj Thakur, IBM (RT): Customers have a lot of choice because developers are working across multiple platforms. From a channel and vendor perspective that brings its own challenges because they are taking an independent view.

Steve Murphy, Frontline Systems (FM): And therein lies the problem. For me, it's the Holy Grail to get an integration and services company to marry up with these fantastic ISVs that are out there. We had one recently where our value-add to them was architecting the infrastructure around their solution to speed up the sale. We went in on three deals and they won all three. We got nothing because the customer loved the architecture but had an incumbent supplier or decided they could do it themselves on Intel. The ISV won't go in to bat for us. We will continue to try and build these partnerships because we are not jaundiced by the fact that they don't work. We will just keep trying to find a solution.

KK: As an infrastructure partner you need to get it into your head that you are not just selling to the client but also to the other people in the alliance. The most complex one we have done was just under $1 million. That involved us, an ISV, a high availability solution, a reporting solution and an operations solution. We brought together five or six companies to present to the client and did almost as much selling to each partner about why it was good for them. But if the customer decides to use Sun instead of IBM, the ISV will feel guilty for about a nanosecond.

Brian Corrigan, ARN (BC): What is a software vendor's perspective on partnering with resellers to deliver solutions?

Paul Beks, Information Builders (PB): No matter what we do in terms of partnering, a solution is in the mind of the customer. We have to work out how to bundle solutions so we are joined at the hip and can't be separated out. That is the secret. We are in the process of doing a campaign with IBM where we use the server as an efficient data warehouse.