First, the back story. At Cisco Partner Summit on June 4, The VAR Guy reported:

During a private meeting with channel partners, Robbins allegedly told VARs they must “Refuse To Lose” when competing with HP, according to three of The VAR Guy’s trusted sources. And Robbins allegedly tossed in this gem: “I am your personal deals desk.”

In other words, if Cisco partners need a better deal to beat HP on price, the partners should call Robbins directly. The Cisco partners said they wouldn’t take Robbins up on the offer because they don’t want to alienate their existing Cisco account representatives. But the message is clear: The war is on with HP.

Fast forward to the present. Robbins’ words seem to be haunting Cisco… gradually moving from the blogosphere into the IT media. Follow-up stories about the potential Cisco-HP price war have appeared here and here on CRN.

Cisco Channel Blog

Eager to clarify the situation, Cisco is taking its message direct to its own partners — through the company’s channel blog.

In a July 9 blog entry, Cisco Senior VP Wendy Bahr emphasizes value over sales volume:

By knowing they will be rewarded for the value they deliver to the customers, not the volume they deliver to the vendor, our partners have the confidence to build their businesses around solving customers’ toughest issues and addressing their greatest opportunities.

Finally, Bahr addresses the “Refuse to Lose” comment allegedly uttered by Robbins, stating:

So if “value” remains our focus, what did we mean by “Refuse to Lose”?

We recognize that in this challenging economic environment it’s more important than ever that we help our customers realize the value from their IT investment. And at Cisco Partner Summit, we candidly discussed our passion to work with our partners to meet the challenge of competition from price and volume-driven vendors.

Hmmm. So, which “price and volume-driven vendor” keeps Cisco up at night? Bahr didn’t mention names in her blog entry. But Cisco certainly seems to have HP on its mind.

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That’s the situation facing the Microsoft Worldwide Partner Conference (WPC09), which runs July 13-16 in New Orleans. During the event, Microsoft will provide numerous updates on Windows 7, Office 2010, Microsoft Business Productivity Online Suite, Windows Azure and the company’s overall Software Plus Services strategy.

But with a single blog post on July 7 — announcing Google Chrome OS, a Linux-based operating system — the search giant has once again changed the rules of the game. In a word, Google’s timing was “brilliant.”

Bloggers, IT journalists and business reporters are spending this week examining what exactly Google Chrome OS means to the operating system market, the Internet, mobile computing, and the future of application development.

Many of those same journalists will converge on the WPC09 conference, armed with Google-related questions for Microsoft. It’s going to be a fun week for those who love to whip up conversation. But a challenging week for Microsoft.

Simply put: Microsoft has spent a year stirring up interest in Windows 7 and distancing itself from Windows Vista. Now, Google has injected itself into the conversation with a single blog post.

Balanced Perspective

Plenty of so-called pundits say the Microsoft empire is falling. No doubt, the company is under attack on multiple fronts. But channel partners are a loyal bunch. And several thousand of them will rally to Microsoft’s cause during WPC09 in New Orleans.

Oh, and did The VAR Guy mention that Microsoft’s net income was $2.98 billion in Q3? That’s not revenue, folks. It’s net income — down significantly from Q3 last year, but still a growing mountain of cash for Microsoft’s war chest.

Meanwhile, Google’s own channel strategy is just getting started. Sure, the Google Apps Reseller program has a reasonable following. But thousands of VARs and managed service providers continue to evangelize Microsoft Small Business Server, Exchange Server, SharePoint and a host of other solutions.

And while we’re on the topic of hosting, Microsoft’s Exchange and SharePoint seem to rank atop the list of applications that MSPs and VARs are hosting for customers these days.

Still, Microsoft must be worried about Google’s entry into the OS market. And Google timed the Chrome OS launch announcement perfectly. But Chrome OS faces multiple questions. And Windows 7, quite frankly, looks pretty promising.

Let the games — at Microsoft Worldwide Partner Conference 2009 — begin.

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First, a little background: Reynolds is a well-known channel chief who previously held key positions at Palo Alto Networks, Trend Micro and Novell. Less than 24 hours ago, Dell Channel Chief Greg Davis disclosed that Reynolds has joined Dell to run the company’s PartnerDirect global enterprise partner business.

During a quick conversation with The VAR Guy, Reynolds shared some key reasons for joining Dell…

1. Opportunity: Davis approached Reynolds directly, and the opportunity to have a global channel role at a major channel company was exactly the type of post Reynolds says she was seeking. “I’ve worked for companies that have been direct and indirect,” says Reynolds. “I’ve seen the good, the bad and the ugly.” When Reynolds looked behind the curtains at Dell, she liked what she saw: A global company that was gaining channel momentum.

2. Relationships: Several of Reynolds’ former enterprise contacts at Novell moved over to Dell around the time former Novell President Joe Marengi joined Dell in 1997. These days, Marengi is at AustinVentures. But when Reynolds checked in with her established Novell sources at Dell, she liked what she heard.

3. Economic Turbulence: Most recently Reynolds was channel chief at Palo Alto Networks. But her position was eliminated as part of a corporate downsizing amid the recession. (Reynolds continues to speak highly of Palo Alto Networks.) When Dell’s Davis came calling, the timing and opportunity seemed perfect to Reynolds.

Already, Reynolds has met with Dell’s Asia Pacific team. Next up, she’s heading to Europe to meet with Dell employees and partners.

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1. Branding and Positioning: Google has Chrome (the browser), Chrome OS (the operating system) and Android (the operating system). How are they similar, how do they differ, and which markets does each offering target?

2. Independent Software Vendors: Is Chrome OS simply an operating system to run Google Apps, or will Google offer software development kits to ISVs? Do operating systems still demand native local applications — or can Google get by with support for Web-driven applications and online services?

3. OEMs: Dell and Hewlett-Packard, among others, say they are interested in Google Chrome OS for netbooks. But will that interest drive PC makers to actually ship netbooks with Chrome OS?

4. Linux: Ah, Linux netbooks were hot items in North America a few months ago. But North American retailers seem less and less interested in Linux netbooks. Will a netbook showdown between Google and Microsoft push Linux further out of the netbook spotlight? And what, ultimately, is Google’s own Linux strategy?

5. Channel Partners: Is Google Chrome OS purely a consumer play? Or does Google plan to work with PC makers to push Google Chrome OS Netbooks through the channel?

Update, July 9, 11:37am eastern: How Google Chrome OS could impact Microsoft’s Worldwide Partner Conference 2009 (WPC09)

Our resident blogger will be hunting down answers to those questions in the days ahead.

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The VAR Guy traded email with Unison Chief Marketing Officer Rurik Bradbury.

Among the highlights:

- Unison 2.0: It’s scheduled to launch in September with ActiveSync for full mobile syncing of email/calendars/contacts; encrypted phone calls; multiparty IM chat; open APIs to build hooks into other services, Bradbury says.

- Hosted Unison: Intermedia, a major Microsoft Exchange hosting provider, is running a Hosted Unison beta that will shift into full-gear during Q3, asserts Bradbury. “It’s great for us that the world’s largest MS Exchange host is now offering Unison,” crows Bradbury. The VAR Guy can’t debate Bradbury on that point.

Bradbury adds: “Partners interested in white labeling Unison down the line can join Intermedia’s partner program for free.”

Seeking more details, The VAR Guy plans to catch up with Intermedia during the Microsoft Worldwide Partner Conference 2009 (July 13-16, New Orleans).

- Partner Program: Bradbury concedes that Unison’s general partner program is “still in the works; we pushed back the launch of this as we are building a more sophisticated partner portal…When we launch, we will give all VARs and partners the ‘premium’ version so they will get leads distributed to them. Our goal is to be an extremely partner-centric company.”

- Ubuntu: Unison also triggered headlines last year by vowing to support Ubuntu Linux. Fast forward to the present, and both Unison Server and Unison Desktop are available in production versions running on Ubuntu, Bradbury says.

Lots of progress and promises. But will Unison become a profitable alternative to Exchange Server and various Unified Communications platforms? And how will channel partners ultimately fit in the mix? The VAR Guy will be watching.

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First, a little background. Yes, Red Hat is solidly profitable thanks to growing sales of Red Hat Enterprise Linux and JBoss middleware. Rival Novell often generates profitable quarters but the profits are based on Novell’s complete software portfolio; the company’s SUSE Linux business is not yet consistently profitable, The VAR Guy hears.

Are there any other publicly held, profitable companies built around the open source model?

Bueller?

Bueller?

Private, But Profitable

Now let’s shift the discussion to privately held open source companies. Since they’re privately held it’s often impossible to determine whether they generate profits.

In recent months, The VAR Guy heard privately held xTuple — an open source ERP software provider that’s building a partner channel — is profitable. And now he’s got another example: Germany’s Sopera, which has so far declined venture funding because the company is profitable, according to Managing Director Ricco Deutscher.

Sopera positions its software as a service oriented architecture (SOA) platform, and the company’s partners include Deutsche Post, Eclipse, Microsoft, Novell and Oracle. Based in Bonn, Germany, Sopera plans to push deeper into the North American market, leveraging channel partners, real soon. (Stay tuned for details on that.)

In the meantime, Sopera’s Deutscher reinforces the statement “we’re profitable.”

Anybody Else?

The VAR Guy is struggling to determine which other companies — if any — from the Open Source 50 research report generate profits.

Certainly, businesses like Digium (promoter of the Asterisk open source IP PBX) and Alfresco (the open source alternative to SharePoint) are growing fast. But their privately held status makes it difficult to pinpoint whether they’re profitable today … and/or expect to be profitable soon.

So, The VAR Guy is all ears: Who else in the open source market is solidly profitable?

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North American Lenovo VARs that sell 25 ThinkPads to a specific customer will receive a rebate to give that customer a free ThinkServer, according to Wes Towns, director of North American Channel Programs at Lenovo.

To be clear: The offer is limited to one server per VAR. So if you sell 250 ThinkPads, your customer still only receives one server.

Creative Marketing

The free server offer, which runs July 1 through Sept. 30, is an intriguing way for Lenovo to seed the market for its servers.

Lenovo announced its server launch in September 2008, and began shipping servers in late 2008. Around the same time, Lenovo announced a server guarantee with Synnex. More recently, the company has introduced small business servers that emphasize virtualization support — allowing VARs and customers to mix and match operating systems and virtualization technology from Microsoft, Novell, Red Hat and VMware.

But how are the servers selling? The VAR Guy is under a gag order, but he can say this: Sales are rising in the double-digits, in terms of percentage growth.

Summer of (Harware) Love

The free ThinkServer offer, tied to 25 ThinkPad sales, is the second major Lenovo summer promotion The VAR Guy has spotted. Lenovo also is giving away one G530 notebook per week as part of a “Sizzling Summer Sweepstakes.”

Separately, Lenovo has launched a strategy to help VARs profit from the economic stimulus package. The VAR Guy will be back with details on that program tomorrow.

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I suspect we’ll cover at least 30 attendee questions during the webcast, which will focus on:

1. Business: Revenue models and potential profit margins from hosted security
2. Technology: How to select a hosted security solution
3. Sales: How to sell your first customer and address their questions head-on
4. Retention: How to maintain and grow a hosted security business
5. Case study: Yes, a real VAR describing his hosted security strategy

Speakers Include:

- The VAR View: Tom Ruffolo, president, eSecurityToGo
- The Vendor View: Perspectives from Trend Micro’s TJ Alldridge
- Moderating: Joe Panettieri (that’s me)

I’m speaking with Tom Ruffolo and TJ Alldridge later (July and July 9 to review preliminary reader questions so feel free to send me your inquiries (joe [at] NineLivesMediaInc.com) or post comments below. Trend Micro is sponsoring the webcast.

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Traditionally, VARs make their money on margins and services. What happens when there is little of either?  Six to twelve months ago I think a lot of VARs ignored the Cloud thunder — hoping it would subside. But with the dip in the economy (Channel Maven is being kind, we all know it’s a flat-out recession) and customers less concerned with physically owning the technology, the Cloud has made great strides.

Some traditional VARs have certainly embraced the Cloud and are attempting to work it into their business model.  But I also see a new breed of VAR emerging.  If I am in the market for accounting technology, who is the first person I am going to look to?  Probably my accounting firm.  Ten years ago, heck even 2 years ago, services firms such as accountants, consultants, and telcos wouldn’t even think of getting involved in implementing, integrating, or servicing technology for a client.  Today, the Cloud makes it possible with less technical expertise.

Hubspot is an inbound marketing tool geared toward small or medium sized business.  Invaluable tool, in the Cloud, minimal investment.  Can you see Greenpages presenting this to a prospect or customer?  Probably not.  Mike Volpe, VP of Marketing for Hubspot puts it well; “As technology moves to the cloud, there is less of a need for maintenance and installation services.  This means that the “Value  Added” in VAR becomes understanding the business challenges of the  customer, more than understanding how to make the technology work.  Similarly, any VAR strategy we implement at HubSpot will be to focus on partners who really understand marketing and can therefore add a lot of business value on top of the software.”

The struggle now becomes how do Cloud technologies identify this new breed of VAR and market a channel program that may seem to be a bit of a foreign concept?

One company, Lemon Operations has developed a program called Cloudy Channels.  Lemon is a global company that helps to identify and recruit channel partners appropriate for the organization.  The key here is they are focused on this “New Breed” of VAR; on the vendor side they identify and recruit them and on the VAR side they communicate the business benefits to acting as a VAR.

These VARs learn differently, they interact differently, and they sell differently.  It’s important to take that into consideration when building the channel organization for your Cloud based product.  Technology and channel needs are changing.  Those who adapt will continue to do well!

What has your experience been in the Cloud?  How has your business as a vendor or solution provider had to adapt?

Contributing blogger Heather K. Margolis, the Channel Maven, has led channel programs for major IT companies. She also has extensive lead generation and marketing experience. Follow The VAR Guy via RSS; Facebook; Identi.ca; Twitter; and via his Newsletter; Webcasts and Resource Center.

Actually, the scoop comes from Google Apps Channel Manager Jeff Ragusa. When The VAR Guy heard about a rumored price change, he reached out to Ragusa for comment.

Ragusa’s email reply:

“Although there was a lot of blogosphere commotion around it today, there has been in fact no change in pricing or SKUs for Google Apps.  The business version continues to list at $50/year/user.  And there continues to be a free version.  A change to one of our web pages unintentionally caused the temporary disappearance of the link to sign up for the free version.  Its been fixed.”

Good to hear. The VAR Guy has been watching  — and listening — closely as Google builds out the Google Apps Reseller program.

Oh, and a shameless closing plug: The VAR Guy (or one of his handlers…) in August will moderate a panel at CompTIA Breakaway featuring Stephen Cho, director of channels for Google Apps.

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Previously Reynolds was:

• Vice President, Global Channel Sales at Palo Alto Networks;
• Vice President, North American Channel and SMB Sales and Marketing at Trend Micro; and
• Vice President, North American Channel Sales at Novell.

Reynolds’ move comes at a critical time for Dell. During the company’s fiscal Q1, Dell’s large enterprise revenue dropped 31 percent to $3.4 billion.

Clues and Comments

During a meeting June 26 at Dell’s headquarters, Davis offered The VAR Guy an update on the PC giant’s channel strategy. The meeting took place before Dell announced Reynolds was joining the company.

Among the highlights, Davis noted:

• Standardized Channel: Dell’s effort to build a standardized global partner program has proceeded well in the US, Canada and Western Europe. But Davis conceded that Dell was “a little behind” on the standardization process in Japan and Australia. He expected those regions to catch up sometime in July.
• ProManage Efforts: Dell will continue to push the ProManage brand in new directions. Already, Dell offers ProManage Managed Services in North America. And after The VAR Guy’s meeting with Davis, Dell expanded ProManage Managed Services into Europe. Watch for additional ProManage moves.
• EqualLogic: Davis says Dell has more than doubled the number of partners selling and certified on the EqualLogic storage offering since acquiring EqualLogic in November 2007. “It’s the cornerstone of our enterprise architecture,” said Davis. No doubt, EqualLogic was a Q1 bright spot, with revenue up 71 percent, according to Dell’s earnings release.
• Windows 7: “Anytime you have an operating system upgrade or transition, the channel has a big opportunity to help customers through that migration.”
• Priorities: Dell is seeking to nearly double its certified partners ranks. Today, the company has roughly 1,500 certified partners worldwide. The goal is to take it to 2,500 fully certified partners this year, notes Davis.
• Financing: Dell has been taking a close look at Cisco’s financing program for VARs and channel partners. Stay tuned. Sounds like Davis is mulling some new channel financing strategies.

Here’s Nancy

No comes word that Dell has hired Nancy Reynolds to “lead global channel business strategy for PartnerDirect, focusing on Dell’s large enterprise channel business.”

In a prepared statement, Davis said:

“We are delighted to have Nancy Reynolds join our team. Her experience and knowledge will be invaluable to our team, and will help expand our channel business in the enterprise market. As with her other roles, Reynolds’ leadership will help build a solid partner eco-system that will expand Dell’s channel presence and meet our partners and their customers’ needs.”

The VAR Guy hopes to speak with Reynolds soon for her perspectives.

Side note: Reynolds had a rather short stint at Palo Alto Networks. The VAR Guy has reached out to Palo Alto Networks to see if a replacement has been named.

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First, let’s talk about the unspoken competition: NetApp.

Traditionally, BlueArc has competed in the high-end storage market, promoting its Titan platform to enterprise customers in data-intensive markets like life sciences, oil and gas, and eDiscovery (litigation). But BlueArc’s latest platform launch — called Mercury — goes after the mid-market.

Along the way, there’s no doubt that BlueArc hopes to pick up a few NetApp channel partners that want to differentiate in the market. Here are some quick thoughts directly from van Orman:

Home Run Marketing…

BlueArc is hosting Mercury launch events in New York, Chicago, California and Europe over the next few days. For the Chicago event, The VAR Guy hears BlueArc has rented a rooftop for a partner and customer party. Oh, and two other details: The rooftop overlooks Wrigley Field, and the party will occur during a Cubs home game.

Anybody else want to skip out on work? Bueller? Bueller? Classic movie. And a classic marketing move by BlueArc.

Channel Efforts

van Orman joined BlueArc roughly two years ago to build the company’s partner program. So far, roughly 130 VARs have warmed up to BlueArc. van Orman hopes to add another 20 or so partners to the channel program this year.

What’s next for BlueArc? van Orman says partners should expect the following moves during the remainder of 2009:

• New channel SE hires
• Potential tiers (gold, silver) in the partner program
• Performance-based incentives
• Service provider partner programs
• An online configurator

Oh, And About NetApp

No doubt, van Orman tried his best to steer clear of competitor names. But NetApp seemed to be the unspoken elephant in the park during today’s meeting with The VAR Guy.

Can BlueArc attract a few NetApp partners in its direction? The answer hinges on Mercury, BlueArc’s new offering for channel partners and mid-market enterprises.

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