Compaq has made clear its aim to join the worldwide top three IT companies by 2000, and it is relying on its channel to get there.
Already number one in PCs and number five in overall IT, Compaq will have to more than double its sales if it is to overtake its nearest rivals, Fujitsu and Hewlett-Packard. Along the way Compaq is intent on fulfilling a second aim - to become the worldwide number three network vendor.
The first step in the process is the immediate launch of 80 networking products under the Compaq branding, the result of $400 million investment including the acquisition last year of networking vendors NetWorth and Thomas-Conrad. The Compaq Netelligent family consists of a range of network interface cards, repeaters and switches, standards-based routers and SNMP-based network management software. And it is the channel that will deliver them to market.
According to Compaq's director of commercial and major accounts Paul Brandling, Compaq will leverage its existing channel structure, while at the same time refining and expanding it where need be. "Historically we've been very strong in the corporate and government marketplace. We do pretty well in the small and medium business market, but I think we can do much better. One of our ongoing programs is to continually review the shape and the size of our channel to make sure we're getting the market coverage that we need, and as we introduce products that are addressing new segments we will look at new channel partners as well."
Brandling says while small business is a market that Compaq is squarely aiming at, the product capabilities do not stop there. "We're going to weight our products very much towards small business and the departmental level of organisations. We are very heavily leveraging industry standard capabilities of the product, and ultimately reducing cost to the customer. That customer can be anyone from a small business that wants to network and needs a device, all the way up to a distributed enterprise that needs a complete switching environment. We can now provide a complete end-to-end solution."
The Compaq product set is based around industry standards such as ISA bus and x86 chipsets, while its router platforms use the Cisco IOS platform. Brandling says while this assists in keeping prices low, there is no loss of functionality.
A key to the strategy will be in selling Compaq products into non-Compaq accounts. But to get there Brandling says non-Compaq aligned networking resellers need to be convinced of the seriousness and merit of Compaq's offering. There are two reasons why they will take on Compaq products, he says. "One is customer acceptance, and the second one is they'll make a profit selling them. And our programs will ensure they'll make a profit selling them - it's as simple as that. It's applying that whole economy of scale argument that we did four years ago with PCs. I think that will drive market acceptance and our channel will roll with that."
Brandling also acknowledges that Compaq is far from alone in the market. "There are some well established players in the marketplace. So we're starting if you like from ground zero - this is Compaq's entree into this particular market segment. But I think we've got such a large customer base, I think the products themselves and the channel are so strong that we should start with a fast start."
To ensure effective channel sales Compaq is looking to leverage the knowledge base already created by industry standard training schemes such as Cisco's CCIE and Novell's CNE. Brandling says that Compaq will also be looking closely at the skill level of the existing PC resellers chain. "If we look at our high-end products, typically the Cisco accreditation process and training that's been implemented in the past, we can use these to leverage off with our channel partners who are already accredited."
Senior systems engineer Malcolm Green says Compaq will also utilise the training it has put in place for its high level server products. "What we are looking at is to leverage off our existing Accredited Systems Engineering program. At the end of February we will require all existing ASEs to be re-accredited and retrained to encompass the LAN-based products - everything up to the switches. We're then implementing a new accreditation scheme. At the moment it's called the ASE Pro program, and that will incorporate router-based technology.
"The ASE program currently leverages off things like the Novell CNE and the Microsoft MCSE to raise the natural skill level of the channel. And we will be pushing the envelope a little further with the ASE Pro. Anybody who wants to sell the router products will have to become an ASE Pro."