Networking to push resellers into sellers

Networking to push resellers into sellers

It's no secret that plunging prices for network hardware and software and thinner margins are pushing resellers increasingly into the service end of the business, and making them sellers of their own services rather than just resellers of hardware or software.

The upside for the reseller is the prospect of maintaining a relationship with customers, which should ensure a steady revenue stream at higher profit margins for the ongoing services they provide.

The downside is the absolute necessity for resellers to become more proficient in the installation and maintenance of networks and to generally improve service levels.

The daunting task for the reseller is to pick the network operating system that is likely to dominate the business in the next few years.

Before we look at that issue, let's take a step back and remember where network operating systems came from.

They started life as a means for users to access resources. In the case of Unix that meant the computer itself. Unix began as a multi-user operating system for Digital's PDP-11 range - before the VAX range. The Internet was developed using Unix systems - so don't write it off just yet.

SCO is now effectively the principal repository of Unix - it owns the intellectual rights. In line with the rest of the world, SCO is eagerly learning to live with everybody else in a mixed computing environment. According to SCO the Unix market is expanding at about the same rate as the overall IT market.

Then came Novell with NetWare, a product that started life as a means for PCs to share expensive (at the time) devices such as laser printers and file servers and has evolved into a total computing resource management system.

Then Microsoft came in with an alternative to NetWare called LAN Manager, and followed this with NT for clients and workstations. The popular belief is that the growth in the NT market has come from older proprietary networking systems such as those from Digital and from LAN Manager upgrades.

Looking ahead

Recent developments from most vendors indicate a push to include more resource management capabilities for a mixed environment over any network - local, wide, intranet or the Internet.

Novell started the ball rolling with Network Directory Services - essentially a database of resources on the network. It is following this with ManageWise, which will give the reseller the ability to manage a customer's network from the reseller's office - or anywhere else with a notebook PC and a data-enabled cellular phone.

SCO's upcoming Tarantella will also give more control over an integrated environment, while Microsoft is also looking to roll out a directory service for NT.

As companies move towards a mixed environment of legacy systems and open systems, or systems based on newer proprietary technology such as Microsoft's Windows NT, there will be a need for resellers to gain proficiency in each of the mainstream network operating systems.

The alternative for smaller resellers is to hire in experts on a particular NOS as required and concentrate on making sure the end-user gets the attention and service levels they require.

A third option would be for the reseller to persuade the end-user organisation to switch to a single NOS. But not even Microsoft could recommend taking that route.

"We would never say to resellers that they should rip out an existing NOS and replace it with NT," said Microsoft's Terry Clancy. "If the end-user organisation has a good working network - leave it. If it ain't broke - don't fix it," said Clancy.

In agreement is SCO's marketing manager for Australia, Peter Laytham. "Anyone who puts all their eggs in one basket is making a fundamental mistake," he said. "For example, a warehouse system doesn't need a $2000 Windows-based PC when a $400 character-based terminal will do the job for a lot less and much lower overheads.

"A good IT strategy will encompass a number of platforms. It will be up to the resellers and system integrators to design the system and then find the right platform to fit the design," said Laytham.

Recognising the increasing importance of intranets and the Internet, major players in the networking market are making their products capable of operating over intranets and the Internet.

Novell recently re-engineered its NetWare core product to give it a global view of network information and resources and re-badged it as InternetWare.

SCO - selling Unix-based OpenServer and UnixWare operating systems - has taken a similar route. SCO's Tarantella sets out to integrate existing enterprise applications with thin clients (such as network computers), PCs and Unix intranet servers over the Internet.

Novell sees the network market falling into three broad areas. At the lower end, the small SOHO user will buy products off the shelf from a major retailer, while at the other end of the market the large enterprises will continue to be serviced system integrators.

Cliff Smith, Novell's managing director for Australia, sees a big opportunity for resellers between these two extremes: "We see a huge potential for resellers to handle the middle part of the market - organisations with between five and 50 people, roughly speaking.

"These organisations will be looking to outsource their network management and maintenance and the resellers are ideally placed to pick up that business."

"It's much the same as any business running a few delivery vehicles wouldn't have a full time mechanic to service them," said Peter Sandilands, Novell's director of strategic developments for the Asia/Pacific. "The business would use a local service station for routine maintenance and develop a working relationship with that service station.

"We are going to see the same happening in the IT business. The resellers will play the part of the routine maintenance arm of network users - network mechanics. But to do this, resellers will have to develop the required skills to maintain and enhance those networks."

"A higher level of quality of service will differentiate the successful reseller from those that will go out of businesses," Sandilands said.

Smith doesn't believe the reseller's role ends when the network is installed. "It should be the start of an ongoing relationship between the reseller and the end-user. It means the reseller will have to offer real service, but on the up side it will mean an increasing percentage of profit for the reseller."

Tarantella and other t-words

SCO's Tarantella takes its name from a dance and its associated music, both popular in southern Italy. Couples and groups dancing the tarantella whirl about the dance floor and come together in formations.

The name originally came from Taranto, the town in southern Italy that also gave its name to something rather more sinister than a peasant dance - the tarantula spider.

Like the tarantella (the dance), the tarantula (the spider) is frequently found in the country around Taranto (the town).

Since the 15th century, dancing the tarantella was supposed to be the cure for tarantism - an hysterical malady characterised by an extreme impulse to dance, which prevailed around Taranto from the 15th to the 17th century. Tarantism was popularly attributed to being bitten by a tarantula.

So, before light-footed resellers take to the dance floor, they should make sure they have been invited to dance the tarantella - not with a tarantula. And if you think you have tarantism - or pain persists - see your medical practitioner.

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