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by William Van Winkle |
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RAM Award: Best Margin Opportunity Smart business is about getting the maximum return for your sales efforts. We know that some VARs excel in creating high-margin custom solutions for their clients, but we’re looking for the best margin opportunity from a single product that can be sold off the shelf and is applicable to a reasonably broad audience.Winner: Computer Associates eTrust EZ Product Line Computer Associates launched its overhauled CA Channel Partner Program in July of 2003, creating two new program categories applicable to the majority of resellers: Affiliate and the higher volume-oriented Premier. Both categories can earn generous rebates, with Premier accounts also accruing MDF. This, combined with aggressive channel marketing and excellent product quality, was enough to land CA our Best Margin Opp honors last year. Apparently, the deal was good enough to carry resellers through 2005.
Right about the time CA will be picking up its 2005 RAM Award, D&H and others will start selling the eTrust Internet Security Suite, comprised of the company’s antivirus, firewall, anti-spam, anti-spyware, and parental control applications. The 2006 suite already comes with a bottomdragging $69.99 MSRP, but CA throws another bonus to the channel by offering several ways end-users can earn an additional $40 rebate. One way is to demonstrate existing ownership of another CA consumer title; another is to show proof of a PC or notebook purchase within 30 days of buying the Security Suite. Any way you look at it, the deal means more dollars for the reseller. And, of course, once the customer sees the value in CA’s security, the door is open for follow-up sales with CA data transfer, backup, and other products. Specifically targeting Symantec, Famularo notes that CA’s suite has superior technology and will reach the marketplace through a greater number of avenues. Additionally, it will arrive with lower pricing than the major competitors, allowing resellers to increase margins still further. And unlike in the past, the 2006 consumer suite will have the full backing of CA’s channel muscle, including MDF, marketing, and sales force assistance. Runners-Up: LG, Phoenix The LG L3200TF is a marvel among modern displays. The 32” widescreen LCD offers a 1366 x 768 (WXGA) resolution, 178/178-degree viewing angle, 8 ms gray-to-gray response time, detachable 10W speakers, and TV tuner. Contrast of 1,000:1 and 500 cd/m2 brightness land this sleek, crisp monitor at the top of the large desktop class, but specs and style alone aren’t enough to make an award-worthy margin play. As one of the flagship products under LG’s SuperSeller program, LG backs the L3200TF with plenty of back-end bolstering in addition to the front-end margins enabled by a premium product that isn’t oversold through the mass merchant channel. One cornerstone of LG’s value that resonates with resellers is the Quickswap Replacement Program, an industry-leading warranty policy that guarantees the display, including the backlight, for three years and will cover shipping both ways in the replacement process. Advance replacement is even possible direct to end-users with a credit card for surety. Especially if you figure post-sale support as a factor in overall margin, this expansive LG model is a perfect margin play for quality display buyers. Phoenix FirstWare Recover Pro 2004 is a must-have, and we don’t use that term lightly. The industry is full of backup solutions, and yet people still lose data all the time. Surveys show that people think backup is either too technical or time-consuming to bother with. Fine. FirstWare Recover Pro, available for only a few dollars per seat in OEM version, installs effortlessly and creates a hidden partition for itself on the hard drive. You can establish a default or custom profile to back up any or all of the system’s regular partitions on a full or incremental basis. Thus when disaster strikes, all the user has to do is hit F4 following the POST to launch the Phoenix Core Management Console. A full recovery from a complete partition melt-down, right down to Windows desktop settings and registry values, takes literally seconds. No downtime. No recovery CDs. No fishing for tapes or other external drives. Best of all, the customer has to do precisely nothing to keep backups current and ready. Most users would pay generously for such value, but you don’t need to gouge. Just take the easy margin boost and know that you’re delivering some of the best protection possible for a very fair price. RAM Award: The David vs. Goliath Award Which vendor who does the best overall job of helping system builders and VARs go head-to-head against mass merchants and e-tailers? We’re looking for vendors who can help a little David partner go out and beat a mighty Goliath retailer in a fair fight.Winner: AMD
“More than half of our revenue worldwide comes from the channel, so that’s a very key audience for us to listen to,” says Gary Bixler, AMD’s worldwide channel manager. “We really do pay attention to what they say and what their customers want, and we try to build our products to meet those requirements. Clearly, our 64-bit product line is the most shining example of that. We had several options for what to do there, but customers made it clear that they wanted backward compatibility and low migration costs. Another more recent example is dual-core. We went to great pains to make sure that our dual-core products were pin-compatible with our previous single-core products, both on desktops and servers. You can just trade out the old chip for the new one, and at most you might have to update the BIOS. For smaller organizations especially that can’t afford to be changing configurations all the time, it’s a tremendous value play.” In a sense, the market’s adoption of x86-64 extensions through AMD’s urging and example is a David and Goliath story in its own right, just as the DDR vs. RDRAM case was before it. As you might expect from an underdog, AMD excels at finding ways to stretch the value in existing resources. That’s really what AMD processors are about: value. Getting more performance, functionality, and futureproofing per dollar than competing products. The best part is that these AMD SKUs are largely a channel play. “The channel story, of course, is the battle those guys face against Dell,” says Bixler. “There has been a mutual agreement between our companies not to have AMD chips in Dell systems, and I think that has gained us a lot of favor with the channel because it gives them tremendous differentiation in offerings versus Dell. And it’s not something trivial that Dell can’t sell. It’s something that’s obviously in demand, highly recognizable, and a respected technology in the market.” This was the year in which AMD was truly able to step out from Intel’s shadow and demonstrate market leadership. Customers understand and respect that, and many are willing to buck the mainstream and pay for that leadership. AMD is by no means a niche solution, but it is the path less traveled, and an increasing number of people are finding that path leads to a better place. Runners-Up: ASUS, Antec One of the hot spots in the 2005 market was whitebooks, and in a tide of manufacturers trying to capture share in this emerging space, none has quite managed to achieve ASUS’s level of quality, aggressive pricing, and adoption at the distributor level. This is still a very early stage for whitebooks, and while budget shoppers might be willing to forgo having a tier-one sticker on their notebooks, corporations and high-end consumers still need reassurance. Thanks to the company’s legendary line of motherboards, the ASUS name is synonymous with top performance and solid stability. ASUS whitebooks are clearly carrying on this tradition. An ASUS whitebook conveys (and often improves on) tier-one quality while still giving resellers the flexibility and margin potential of a built-to-order product. If you’re still undecided on how to get into the whitebook market, reseller votes show that you won’t find a better place to start. There are two reasons Antec landed in our finalist slot this year. The first is that it is relatively rare to find a PC component company with a developed reseller program, and Antec’s relationship with channel distributors is both established and extensive. The second is the value Antec brings to system builders. There are scores of case and power supply options in the market, branded and unbranded alike, but few if any match Antec’s component quality, ease of assembly, affordable cost, and support. Most tier-one OEM systems scrimp on case and power supply quality. With Antec, you can demonstrate superior component selection without jeopardizing your system cost. RAM Award: Best Channel Product Some vendors let resellers slug it out with mass merchants and e-tailers. Good vendors take steps to protect their channel partners with products specific to VARs and system builders. Which of these products is best, though? Which channel product not only presents a great up-front opportunity but also long-term returns?Winner: Microsoft Small Business Server
There are three key things that make SBS a channelfriendly product. The first is the incredible money-making opportunity SBS presents for reseller customers. The minor part of this is the $599 price for Standard Edition or $1,499 for Premium. Far more important are the related purchases often tied to an SBS installation. “When a customer buys a server,” says Microsoft’s Lewis Lin, Windows Small Business Server product manager, “more often than not they’ll also upgrade their desktops, whether it’s Windows 98 to XP Pro or just brand new machines. But they also might get other non-Microsoft software, such as antivirus or a backup solution or some kind of monitoring solution. So SBS represents a much bigger deal than just the title.” The real SBS money, though, sits outside the box in the form of services. Some industry figures indicate that the margins on services are between 25 to 60 percent. “Even in the small business space,” says Lin, “services revenue on just an initial server deployment could easily be in the five-figure range. Then there are monthly maintenance issues. Remote monitoring is one example. You have to make sure that the Exchange server is up at all times because email is the most critical app for many organizations these days, and you can’t afford downtime. Monitoring that 24 x 7 is a great reseller opportunity. Patching is another one, both for servers and desktops, and SBS has some capabilities to help manage desktop patching.” The directions in which a reseller can take an SBS deployment are essentially unlimited. The trick is getting the training to understand your configuration options and how to translate these into services your organization can implement effectively. Fortunately, as mentioned above, Microsoft’s channel program does an exceptional job at delivering this. You’ll also get the full weight of Microsoft behind you in marketing SBS. This spans from customized, co-branded mailing campaigns to all of the advertising Microsoft does for SBS to help generate market pull. The goal is that by the time you walk in a client’s door, you should already be half-way to closing the sale. What makes SBS such a powerful channel play is that you will be in a unique position to explain why SBS will solve your customer’s needs and how you can build a custom solution wholly unavailable through retail means. Runners-Up: Phoenix Technologies, ECS It seems that Phoenix’s FirstWare Recover Pro is such a strong channel play that voters pushed it into the final three in two categories this year. Yes, Recover Pro can be bought direct for $39.95, and it’s also available through retail and e-tail. But Recover Pro is all about being a hands-off solution. The corporate managers buying this for their workgroups don’t want users or admins handling backups; neither do they want them installing software. This is the quintessential bundled OEM app, and it’s arguably more important than any antivirus or anti-spyware product. Because this is a less glamorous, less known product category, though, it takes a reseller to do an effective job of selling Recover Pro. But once the light goes on in the buyer’s mind, the value proposition is nearly irresistible. Elitegroup Computer Systems has been a large force in the channel for years. The company is one of the world’s largest motherboard manufacturers, and ECS has long been a choice pick for value systems. But now Elitegroup is looking to move from being a largely faceless ODM to being a recognized and admired premium brand, and a key part of that strategy is demonstrating innovation. Enter the PF88, perhaps the wildest idea in motherboards the industry has seen in years. The PF88 is a Socket 775 Pentium 4 motherboard equipped with all of the latest bells and whistles (dual RAID, eSATA, SATA/300, PCI Express, dual-core support, and so on). But it also features ECS’s own “Elite Bus” slot, capable of upgrading the board to an Athlon 64/FX, Pentium M, or any other platform ECS opts to deliver. No other manufacturer offers such flexibility, and the channel opportunity not only to explain the technology and its benefits but also to implement the upgrades and all of the driver and application patching that might go with it is substantial. ...more |
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