2006 Year-end Wrap Up:
The Sky Hasn't Fallen After All

Earlier this year I wrote about my growing concern with recent economic indicators and what I believed they were pointing to. Interest rates and inflation on the rise, declining demand for housing, the GDP down to its lowest growth rate in three years- it all seemed to be lining up to spell r-e-c-e-s-s-i-o-n.

I now stand here looking back at 2006 and while we seem to be facing many of the same problems and then some - energy and health-care costs skyrocketing, global competition increasing, and paltry progress in Iraq, I feel rather bullish about the coming year’s possibilities. It seems that so do many others in the technology sector and particularly those that resell technology products and services. In fact the recent VARBusiness “State of the Market” survey showed that a whooping 81% of VAR’s said they expect increasing revenues over the coming year!

Below are some of the highlights from past year:

1. A giant stumbled:
   Intel laid off 10,000+ employees, a large percentage from their channel management teams, as AMD continued steadily gaining market share and stock prices took a downward turn due to poor financial performance, inventory overruns and problems in some of Intel’s ancillary businesses. 2007 should prove to be an interesting year to watch the troubled chip maker as recently appointed Channel Chief Steve Dalman takes over the battle in the channel with AMD and the company introduces a number of new offerings to the market.



2. Disaster recovery solutions hit the market with hurricane force:
   With recent disasters such as hurricane Katrina, the Tsunami in Indonesia and even 911 still looming large in all of our collective memories technology manufacturers and solution providers have responded to the demand for disaster recovery solutions and services with an onslaught of data backup, replication and recovery solutions. This has created a huge opportunity for savvy solution providers who have responded in large numbers by creating practices around designing the infrastructure and plans to quickly restore a businesses critical programs and data. No doubt we’ll see this trend continue to grow throughout the coming year.



3. “The Donn” retired:
   IBM Channel Chief Don Atkins, under whom IBM's partner-related revenue increased from 30 percent in 2004 to 35 percent in 2005, resigned from his position leaving thousands of IBM partners, press, analyst and other industry watchers wondering why or where he would go next? Atkins has been credited with improving IBM’s partner profitability, making them easier to do business with and improving the overall partnering experience. Certainly it’s not the last we’ll see of CMP’s 2006 Channel Executive of the Year.



4. Everyone went on a shopping spree!
   AMD and ATI, EMC and RSA, Hewlett-Packard and Mercury, Motorola and Symbol – these are just a few of the major acquisitions we saw in the technology industry over the past year. All are companies with significant channels in place that now face the challenge of keeping those channels productive during what is typically a highly turbulent time. The coming year will show how they fare and will most certainly continue to create more interesting acquisitions to watch as well.

GIVE US YOUR PICK

Give us your pick for the events, people, and companies that most influenced technology channels this year by posting to our BLOG.

1. SasS became part of everyday vernacular:
   Those that claimed businesses may not be ready to run their most critical processes on software managed by a third party are, as they say, eating their words as a rash of companies rush SaaS offerings to market. SaaS, with it's appealing value proposition - easy and inexpensive to implement; doesn't require as much infrastructure; costs that are more predictable, has made it an extremely appealing option to customers especially in the SMB sector. Gartner predicts that 25% of new business software will be delivered as services by 2011, up from 5% last year. But the question remains, is there a place for the channel in all of this? Some solution providers see SaaS as a huge opportunity while others fear disintermediation. 2007 should be an interesting year to watch as SaaS vendors struggle to develop relevant channel-inclusive business models and solution providers struggle to define their place in the SaaS equation.

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